20180222Application.pdf

EXECUTIVE OFFICES
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555 SOUTH COLE ROAD . P.O. BOX 7608 . BOISE, IDAHO 83707 . [phone] . FAX [phone]-
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February 22,2018
Ms. Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington Street
P.O. Box 83720
Boise, ID 83720-0074
RE:Intermountain Gas Company
Case No. INT-G-18-01
Dear Ms. Hanian:
Enclosed for filing with this Commission is an original and seven (7) copies of Intermountain
Gas Company's Application seeking approval for an Accounting Order regarding the treatment
and costs associated with customer payment transactions handled by Western Union.
Please acknowledge receipt of this filing by stamping and returning a copy of this Application
cover letter to us.
Should you have any suggestions regarding the attached, please don't hesitate to contact me at
[phone].
Very truly yours,
P. McGrath
Director, Regulatory Affairs
Intermountain Gas Company
Enclosure
cc: Mark Chiles
INTERMOUNTAIN GAS COMPANY
CASE NO. INT.G-18.01
APPLICATION
In the Matter of the Application of INTERMOUNTAIN GAS COMPAI\Y
For an Accounting Order Regarding the Treatment of Costs Associated
With Customer Payment Transactions Handled by Western Union
Michael P. McGrath
Director - Regulatory Affairs
Intermountain Gas Company
Post Office Box 7608
Boise, lD 83707
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of
INTERMOLTNTAIN GAS COMPANY
For an Accounting Order Regarding the
Treatment of Cost Associated With
Customer Payment Transactions
Handled Westem Union.
Intermountain Gas Company ("lntermountain" or "Company"), a subsidiary of MDU
Resources Group, Inc. with general offices located at 555 South Cole Road, Boise, Idaho, pursuant
to the Rules of Procedure of the Idaho Public Utilities Commission ("Commission"), hereby
respectfully applies for an accounting order authorizing the Company to record, as a regulatory
asset, expenses incurred by the Company associated with customer payment transactions handled by
Western Union.
Communications in reference to this Application should be addressed to:
Michael P. McGrath
Director - Regulatory Affairs
Intermountain Gas Company
Post Office Box 7608
Boise. ID 83707
In support of this Application, Intermountain does allege and state as follows:
I.
Intermountain is a gas utility, subject to the jurisdiction of the Commission, engaged in the
sale of and distribution of natural gas within the State of Idaho under authority of Commission
Certificate No. 219 issued December2,1955, as amended and supplemented by Order No. 6564,
dated October 3,1962.
Case No, INT-G-18-01
APPLICATION
APPLICATION - 2
Intermountain provides natural gas service to the following Idaho communities and counties
and adjoining areas:
Ada County - Boise, Eagle, Garden City, Kuna, Meridian, and Star;
Bannock County - Arimo, Chubbuck, Inkom, Lava Hot Springs, McCammon, and Pocatello;
Bear Lake County - Georgetown, and Montpelier;
Bingham County - Aberdeen, Basalt, Blackfoot, Firth, Fort Hall, Moreland/Riverside, and Shelley;
Blaine County - Bellevue, Hailey, Ketchum, and Sun Valley;
Bonneville County - Ammon, Idaho Falls, Iona, and Ucon;
Canyon County - Caldwell, Greenleaf Middleton, Nampa, Parma, and Wilder;
Caribou County - Bancroft, Grace, and Soda Springs;
Cassia County - Burley, Declo, Malta, and Raft River;
Elmore County - Glenns Ferry, Hammett, and Mountain Home;
Fremont County - Parker, and St. Anthony;
Gem County - Emmett;
Gooding County - Gooding, and Wendell;
Jefferson County - Lewisville, Menan, Rigby, and Ririe;
Jerome County - Jerome;
Lincoln County - Shoshone;
Madison County - Rexburg, and Sugar City;
Minidoka County - Heyburn, Paul, and Rupert;
Owyhee County - Bruneau, and Homedale;
Payette County - Fruitland, New Plymouth, and Payette;
Power County - American Falls;
Twin Falls County - Buhl, Filer, Hansen, Kimberly, Murtaugh, and Twin Falls;
Washington County - Weiser.
Intermountain's properties in these locations consist of transmission pipelines, liquefied
natural gas storage facilities, a compressor station, distribution mains, services, meters and
regulators, and general plant and equipment.
II.
In Order No. 33805, issued on June 30, 2017 in connection with Case No. INT-G-I7-02, the
Commission directed the Company to meet within 60 days of the issue date of the above Order with
the Idaho Public Utilities Commission Staff ("Staff') to "discuss alternatives to convenience fees."
Pursuant to this Order, the Company and members of the Consumer Assistance Section of the
Commission Staff, collectively the "Parties", had several phone calls and met on September 12,
2017 to discuss the issue of convenience fees, specifically the costs associated with customer
payment transactions handled by Westem Union.
II
As a result of the communications mentioned above, the Parties agree, effective February l,
2018, that the Company pay, and defer, the costs associated with customer payment transactions
APPLICATION - 3
handled by Westem Union, with the intention of seeking recovery of such costs through this
Application. Such costs are estimated to be between $75,000 and $125,000 annually, depending on
the number of transactions and the per transaction fee. The Parties propose that the payment
transaction costs be deferred to a regulatory asset and be recovered in rates through the Company's
annual filing of its Purchased Gas Cost Adjustment ("PGA"), with collection to begin with the PGA
filed in 2019. Furthermore, the Parties agree that deferral of the above costs should expire in three
(3) years (February 1,2021) or until such time as the Company files a general rate case, whichever
comes first.
ry.
Pursuant to Accounting Standards Codification ("ASC") 980 - Regulated Operations, a rate-
regulated utility can create a regulatory asset for incurred costs that would otherwise be charged to
expense if two criteria are met. First, it is probable that future revenue, at least equalto the incurred
cost, will occur due to the inclusion of the incurred costs in allowable costs for rate-making
purposes. Second, that the future revenue provided will be for the purpose of allowing recovery of
the particular incurred costs (instead of future similar costs). A rate order from the Idaho Public
Utilities Commission approving/requiring the creation of this regulatory asset provides reasonable
assurance to the Company's financial auditors that this asset exists.
v.
Intermountain therefore and hereby requests an Accounting Order from this Commission
allowing for the creation of a regulatory asset to capture the costs associated with customer
payment transactions handled by Westem Union. The Company further requests that the Company
be granted authorization to recover in rates this same regulatory asset in the Company's PGA,
with collection to begin with the PGA filed in 2019. Finally, the Company requests that deferral
of the payment transaction costs should expire in three (3) years (February 1,2021) or until such
time as the Company files a general rate case, whichever comes first.
VI.
The proposed request by Intermountain for this Accounting Order is just, fair, and
reasonable.
vII.
Copies of this Application have been provided to those parties regularly intervening in
Intermountain's rate proceedings.
APPLICATION - 4
VIII.
Intermountain requests that this matter be handled under modified procedure pursuant to
Rules 201-204 of the Commission's Rules of Procedure. Intermountain stands ready for immediate
consideration of this matter.
APPLICATION - 5
WHEREFORE, lntermountain respectfully petitions the [daho Public Utilities Commission as
follows:
a. That the Company be granted authorization to create a regulatory asset to capture the
costs associated with customer payment transactions handled by Western Union
which the Company began paying on February I , 201 8,
b. That the Company be granted authorization to recover in rates this same regulatory
asset in the Company's PGA, with collection to begin with the PGA filed in2019,
c. That deferral of the costs described above should expire on February 1,2021or until
such time as the Company files a general rate case, whichever comes first,
d. That this Application be heard and acted upon without hearing under modified
procedure, and
e. For such other relief as this Commission may determine proper herein.
DATED at Boise, Idaho, this2Znd day of February, 2018
INTERMOUNTAIN GAS COMPANY
By
-Re Affairs
APPLICATION - 6
CERTIFICATE, OF MA I LING
I HEREBY CERTIFY that on this 22nd day of February, 2018, I served a copy of
the foregoing Case No. INT-G-18-01 upon:
Ed Finklea
Northwest Industrial Gas Users
545 Grandview Drive
Ashland, OR 97520
Chad Stokes
Cable Huston et al.
1001 SW Fifth Avenue, Suite 2000
Porlland, Oregon 97204-1 136
Don Sturtevant
J. R. Simplot Company
PO Box 27
Boise, lD 83707
by depositing true copies thereof in the United States Mail, postage prepaid, in envelopes addressed
to said persons at the above addresses.
- Regulatory Affairs
APPLICATION - 7