20191213Letter.pdf

EXECUTIVE OFFICES
INTERMoUNTATN GAs Coruparuy RECEIVED
sss souTH coLE BOAD . P.O. BOX 7608 . BOTSE, |DAHO 83707 . (2O8) 377-6000 . FAX: s77-6097
illg DEC l3 Pll 2: 35
December 13,2019
Ms. Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
RE: Idaho Public Utilities Commission Order No. 34099 (Case No. INT-G-I8-01)
Dear Ms. Hanian:
During the time that Staff and the Company were meeting on the remaining transaction fees, the
Commission issued Order No. 34405 in Suez Water Idaho Inc's Case No. SUZ-W-19-01. Although
the Commission approved Suez's request to assume responsibility for the transaction costs, t}ey
noted:
"The Commission approves this request utilh some trepidation, however, as it continues to adhere
lo the principles ofcost causation. lV'e also expect cost reductions in other areas to ofset at least a
portion if not all of these transaction costs. Wile we have approved similar requests in the past, we
are increasingly concerned that making all ratepayers bear the cost of transaction fees they might
have otherwise avoided by using a dffirent payment method is inconsisteht with the principles of
cost csusation to which we adhere. In this particulu case, we are willing to approve Suez's requesl
because the projected cost to Suez for bearing the transaction costs is fairly small (and thus will not
signiJicantly affect rates), and because we have pyanted similar requests in lhe past. We continue to
evaluate, however, whether socializing transaction costs is consistent with cost causation
principles " Id. at5
Given this guidance fiom the Commission, Intermountain agrees that it is not in the best interest of
its customers to socialize the remaining transaction fees. Intermountain is committed to continuing
to pay the transaction fees for customers t}rat pay their bill in-person through Westem Union's
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r-r,il'11iJlui\
Following a collaborative process with the Idaho Public Utilities Commission Staff, Intermountain
began paying the Convenience Pay transaction fees for customers that pay their bills in-person
through Westem Union effective February 1, 2018. In Order No. 34099, issued on July 2, 2018 in
Case No. INT-G-I8-01 the Commission authorized Intermountain to create a regulatory asset to
defer the costs associated with the Company payment ofthese in-person customer transactions. As
part ofthat Order, the Commission encouraged the Company and Staff to "continue to collaborate
on how to best address transaction fees". Id. at 3
EXECUTIVE OFFICES
I NTERMoU NTAr N GAs Co*rPerqY
555 SOUTH COLE BOAD . p.O. BOx 7608 . BO|SE, IDAHO 83707 . [phone] . FAX:[phone]
Convenience Pay locations. This addresses the concern that convenience fees unfairly impact low-
income and under-banked customers. Allowing customers to pay their bills in-person without
incurring additional fees benefits all customers by encouraging timely payments and thus
minimizing uncollectible expenses.
The remaining ransaction fees, however, are for discretionary credit/debit card use to make bill
payments over the phone or online, which is the most expensive payment option for Intermountain's
customers. There are several payment options available to customers that do not incur additional
fees for them or the Company, including paying online using a checking or savings accormt
withdrawal ot paying by mail.
Intermountain has observed that as other utilities removed the transaction fee for crediVdebit card
payment options, there has been a steady increase in the use ofthese payment options that incur a
fee. This growth is driven in large part by customers that were previously using a fee-free payment
option. In 2018, 72% of Intermountain's customers payed their bill using an electronic payment
method. Ofthe 727o that used on electronic payment method, 47o incurred a transaction fee. If
transaction fees for credit/debit card payments were removed, Intermountain would expect to see a
significant potion of its customers that pay electronically begin to use their credit cards as a way to
take advantage of credit card opportunities for points or cash back. Removing the true cost ofthe
payment option removes the incentive for customers to choose the least-cost bill payment option.
Accurate cost signals will continue to help keep Intermotrntain's prices low for all customers.
Based on the above analysis, Intermountain does not plan on filing an application to request its
customers bear the cost of the remaining credit/debit card transaction costs at this time. However,
as technology and market conditions change, the Company is committed to continue discussions
with Staffon this issue. Should you have any questions, please don't hesitate to contact me at
(208) 377-601s.
Sincerely,
Cc: Mark Chiles
Lori A. Blattner
Director, Regulatory Affairs
Intermountain Gas Company