20200225Notice_of_Application_Order_No_34560.pdf

Office of the Secretary
Service Date
February 25,2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN )CASE NO.INT-G-20-01
GAS COMPANY'S APPLICATION FOR )
AUTHORITY TO REVISE ITS GENERAL )NOTICE OF APPLICATION
SERVICE PROVISIONS RELATED TO THE )
INSTALLATION AND EXTENSION OF )NOTICE OF
NATURAL GAS MAINS AND SERVICES )INTERVENTION DEADLINE
)NOTICE OF SUSPENSION OF
)PROPOSED EFFECTIVE DATE
)ORDER NO.34560
On January 27,2020,Intermountain Gas Company ("Intermountain"or "Company")
applied to the Commission for authority to revise the Company's General Service Provisions
related to the installation and extensionof natural gas mains and services ("Line Extension").
The Commission now issues this notice of the Company's Application,notice of the
Intervention Deadline,and suspends Intermountain's proposed effective date for its tariff,under
Idaho Code §61-622(4).
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that in the Company's last rate case,Case No.INT-
G-16-02,the Commission found it "reasonable and appropriate"for Intermountain to update its
Line Extension tariff to reflect the rate of return approved in the rate case.Order No.33757.The
Commission noted the updated tariff should accurately reflect the degree to which customer
contributions associated with Line Extensions depend on rate of return.Beginning in December
2017,the Company began working closely with Commission Staff to update the Line Extension
tariff in response to Order No.33757.
YOU ARE FURTHER NOTIFIED that the Company proposes to replace its General
Service Provisions Section C and update Section A of its General Service Provisions to refer to
Section C.The Company would use an embedded cost methodology approach to calculate the
Allowable Investment'for residential and commercial Line Extension projects.Intermountain
'The Allowable Investment is the portion of a Line Extension funded by Intermountain.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.34560 1
states that this method "will help to ensure that the investment in gas facilities for each new
customer will be similar to the embedded costs of the same facilities for existing customers that
are reflected in the Company's approved base rates."Application at 5.The customer will pay any
costs in excess of the Allowable Investment as a customer advance.
YOU ARE FURTHER NOTIFIED that the Company's proposed tariff calculates the
Allowable Investment for residential applicants by first calculating the estimated annual therm
usage of the customer,then multiplyingthe estimated annual therm usage by the Allowable
Investment Factor2.The estimated annual therm usage is calculated using a formula incorporating
the square footage of the residential customer's home (if the home is gas heated),and the annual
therm usage of the home's gas appliances.Application,Exhibit 2.
YOU ARE FURTHER NOTIFIED that to determine the cost to install a Service Line',
Intermountain proposes multiplyingthe on-property Service Line lengthby the Service Line Cost
per Foot4.For a Mains extension,the Project Cost "is calculated by estimating the costs of the gas
facilities required to serve the gas load of the requesting applicant."Application at 6.Under the
proposed tariff,the applicant for a Line Extension pays the difference between the Allowable
Investment and the Project Cost.
YOU ARE FURTHER NOTIFIED that the Company anticipates filing an annual tariff
advice to update the Allowable Investment Factors,the Service Line Cost per Foot,and the
construction overhead charge.
YOU ARE FURTHER NOTIFIED that under the Company's proposal,a customer
who paid for a Line Extension would be eligible for a vested interest refund if additional service
points are added to the project within five years of the date of installation.This would occur when
a service point not used in the original calculation connects to the Main extension within a five-
2 The Allowable Investment Factor is derived from the Present Value (PV)of the embedded cost of Mains and
Services in the Company's tariff.The PV calculation uses the Commission-approved Weighted Average Cost of
Capital as the discount rate over the life of the plant.Allowable Investment Factors for Service and Main are
included in Section C,Section 4.3 of the Company's proposed tariff.
3 A Service Line is an underground gas pipeline and required fittings that extend downstream froma Main,or
branches from an existing Service Line to the location of the meter.
4 The Service Line Cost per Foot is derived by calculating a three-year average of service line costs dividedby the
feet installed during the same years.The Service Line Cost per Foot would be updated annually.For 2020,the
Company proposes a value of $12.38 per foot.See Application,Exhibit 5.
5 Main is the underground pipeline,and required fittings,used for the distribution of natural gas upstream of Service
Lines.See Application,Exhibit 2.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.34560 2
year period after the extension.When this occurs,the original applicant or developer would be
eligible for a vested interest refund not to exceed the original upfrontpayment.
YOU ARE FURTHER NOTIFIED that the Company proposes refunding applicants
who paid a customer advance between May 1,2017-the effective date of Order No.33757-and
the effective date of the final order in this case.The reason given by the Company for this refund
is "the amount of time that has elapsed between the reduction of Intermountain's [rate of return]
in case No.INT-G-16-02 and the filing of this case."Application at 7.The refunds would be
calculated by comparing the original project and the resulting allowable investment to the proposed
Allowable Investment calculation method at issue in this case.If the comparation shows the
customer advance paid under the previous tariff was higher than the customer advance would have
been under the proposed tariff,the customer would be refunded the difference-less any refunds
already remitted.
YOU ARE FURTHER NOTIFIED that the Company states the proposed tariff would
result in a slightly higher Allowable Investment for projects that include both a Main and Service
extension,due largely to increased costs over time and Intermountain's reduced weighted average
cost of capital in Case No.INT-G-16-02.For projects that include only a service extension,the
footage that will be allowed without any investment by the customer would be less due to declining
customer usage.
YOU ARE FURTHER NOTIFIED that Intermountain states it will issue notice of its
Application to affected customers during the week of February 3,2020.The notice will be sent to
"those developers,builders,and HVAC contractors that may be affected by the proposed changes
to inform them of the Company's request."Application at 9.
YOU ARE FURTHER NOTIFIED that the Company requests an effective date of
April 1,2020 for its proposed tariff,and requests that its Application be processed under Modified
Procedure.Id.
YOU ARE FURTHER NOTIFIED that the Application is available for public
inspection during regular business hours at the Commission's office.These documents are also
available on the Commission's web site at Click on the "NATURAL GAS"
icon,select "Open Cases"and then click on the case number as shown in the caption of this
document.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.34560 3
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code and specifically Idaho
Code §§61-502 and 61-503.The Commission may enter any final Order consistent with its
authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure,IDAPA 31.01.01.000et seq.
NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons who wish to intervene in this matter to
obtain the rights of party (e.g.,to file formal discovery,or present evidence or cross-examine
witnesses at a hearing)must file a Petition to Intervene with the Commission under the
Commission's Rules of Procedure 72 and 73,IDAPA 31.01.01.072 and .073.Persons who wish
to intervene as a party must file a Petition to Intervene by March 11,2020.Such persons shall
also provide the Commission Secretary with their electronic mail address to facilitate further
communications.
YOU ARE FURTHER NOTIFIED that persons who would like to present their views
without parties'rights of participation and cross-examination are not required to intervenebut may
present their views by submitting written comments to the Commission.
YOU ARE FURTHER NOTIFIED that the Commission Secretary shall issue a Notice
of Parties after the deadline for intervention has passed.The Notice of Parties shall assign exhibit
numbers to each party in this proceeding.
NOTICE OF SUSPENSION OF PROPOSED EFFECTIVE DATE
YOU ARE FURTHER NOTIFIED that,given the public interest in having adequate
time to comment on this case,the Commission finds it appropriate to suspend the Company's
proposed effective date of April 1,2020,for a period of 30 days plus 5 months,unless the
Commission issues an earlier Order accepting,rejecting,or modifyingthe Company's Application.
See Idaho Code §61-622(4).
ORDER
IT IS HEREBY ORDERED that the April 1,2020 effective date that Intermountain
proposes for its tariff shall be suspended for a period of 30 days plus 5 months pursuant to the
Commission's authority under Idaho Code §61-622(4).
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.34560 4
IT IS FURTHER ORDERED that persons desiring to intervene in this case for the
purpose of obtaining parties'rights of participation must file a Petition to Intervene with the
Commission,pursuant to Rules 72 and 73,IDAPA 31.01.01.72-73,by March 11,2020.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this .26 6
day of February 2020.
PAUL KJEL AN ,PRESIDENT
KR ONER
ERYC ANDERSON,COMMISSION¾
Diane M.HaniaË
Commission Secretary
I:\Legal\GAS\INT-G-20-01\orders\INTG2001_ntc_app_inlefvention_deadline_mh.doex
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO.34560 5