20190823Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRE,TARY
COMMISSION STAFF
LEGAL
FROM:JOHN R. HAMMOND JR.
DEPUTY ATTORNEY GENERAL
DATE: AUGUST 21,2019
SUBJECT:INTERMOUNTAIN GAS COMPANY'S APPLICATION FOR
AUTHORITY TO REVISE RATE SCHEDULE EEC ENERGY
EFFICIENCY CHARGE; CASE NO. INT-G-19-05.
On August 15, 2019, Intermountain Gas Company ("Intermountain Gas" or the
"Company") applied to the Commission for an order approving an increase in the Energy
Efficiency Charge, Rate Schedule EEC, from $0.00367 per therm to $0.02093 per therm.
Application at l. The Company requests that its Application be processed under Modified
Procedure. Id. at 6.
BACKGROUND
In Commission Order 33888, Case No. INT-G-17-03, the Commission authorized
Intermountain Gas to implement a demand-side management program, now known as the
Residential Energy Efficiency Rebate Program (the "Program"). The purpose of the Program "is
to encourage upgrades to, or use of, high efficiency natural gas equipment." Rate Schedule EE,
Intermountain Gas Company LP.U.C. Gas Tariff, Sheet No. l6 at 1. The Program is funded by
the Energy Efficiency Charge ("EEC") which is billed monthly to the Company's residential
customers. See Rate Schedule EE, Intermountain Gas Company I.P.U.C. Gas Tariff, Sheet No. l7
at 1; see also Apphcation at3-4.
APPLICATION
Intermountain Gas asserts that from October l, 2017 through June 30, 2019 the
Program has incurred $2,810,560 in expenses. Id. at 4. The Company states these Program
expenses have exceeded revenues generated by the current EEC of $0.00367 per therm by
$1,097,907 which remains deferred and unrecovered. Id. The Company alleges that$2.2 million
DECISION MEMORANDUM I
or 77oA of these expenses were rebates paid directly to residential customers participating in the
Program. Id.
Intermountain Gas also asserts that due to the "overwhelming success" of the Program
and its anticipated growth the Company forecasts annual total Program costs of approximately
$3,944,642 going forward. 1d. This amount significantly exceeds the original estimate of Program
costs of $777 ,000. Id. The Company estimates $3,300,000 or 84o/o of these future expenses will
be customer rebates. Id.
Intermountain Gas states its Application has been brought to the attention of its
customers through a Customer Notice and by a Press Release sent to daily and weekly newspapers,
and major radio and television stations in the Company's service area. Id. at 5-6.
Based on the foregoing, Intermountain Gas requests Commission authorization to
increase the EEC to $0.02093 per therm. Id. at 5. Intermountain Gas requests that the proposed
EEC become effective on October 1,2019, to coincide with the effective date of any price change
related to the Company's annual Purchased Gas Cost Adjustment. Id. Intermountain Gas asserts
Commission approval of the proposed EEC will allow the Company to collect $5,042,549 from
residential customers in the next year. Id. The Company states this will allow for recovery of the
deferral balance arising from past Program expenses and to support its future operation and growth.
Id. The Company states the typical residential customer's monthly bill would increase by $1.07 if
the Commission approves the higher EEC. Id.
STAFF RECOMMENDATION
Staff recommends that the Commission issue a Notice of Application and Notice
ofModified Procedure. Staff recommends a September 13,2019 deadline to file written comments
for any interested party. Staff also recommends a September 18, 2019 reply comment deadline.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and a Notice of
Modified Procedure, with a September 13,2019 written comment deadline and a September 18,
2019 reply comment deadline?
J R. Hammond Jr
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2DECISION MEMORANDUM
Attorney General