20200513Notice_of_Application_Order_No_34667.pdf

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34667 1
Office of the Secretary
Service Date
May 13, 2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY’S APPLICATION FOR
AUTHORITY TO FACILITATE
RENEWABLE NATURAL GAS ACCESS
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CASE NO. INT-G-20-03

NOTICE OF APPLICATION

NOTICE OF
MODIFIED PROCEDURE

ORDER NO. 34667

On May 4, 2020, Intermountain Gas Company (“Intermountain” or “Company”)
applied to the Commission for authority to facilitate access for Renewable Natural Gas (“RNG”)
producers to the Company’s distribution system for the purpose of moving RNG to their end-use
customers.
The Commission now sets deadlines for interested persons to comment on the
Application, and for Intermountain to reply.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that RNG is pipeline-quality biomethane produced
from biogas. Intermountain asserts that, increasingly in Idaho, livestock operations are using
animal waste to produce biogas which is then cleaned to produce RNG for the expanding RNG
market. Several nearby states subsidize RNG production or mandate the use of renewable energy
sources. Intermountain believes that these policies make RNG production profitable.
YOU ARE FURTHER NOTIFIED that an RNG producer needs access to the local gas
utility’s distribution system in order to move RNG to its end-user customer efficiently. So far,
Intermountain has executed contracts with three RNG producers to facilitate access, but the
Company seeks Commission approval of an RNG facilitation plan that will guide all future
distribution system access by RNG producers. If the Commission approves the RNG facilitation
plan, the Company proposes to make all subsequent RNG agreements consistent with it.
YOU ARE FURTHER NOTIFIED that Intermountain contends that it will “completely
insulate utility customers from all potential impacts of RNG production.” Application at 5.
Intermountain proposes a monthly fee for access to the Company’s distribution system. Also, if

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34667 2
Intermountain must incur startup or extraordinary Operation & Maintenance expenses at an RNG
facility, “the producer will be billed for the actual additional expenses incurred by Intermountain.”
Id. at 6. The monthly fee will include a Maintenance Fee and an Access Fee. The Maintenance Fee
will cover Intermountain’s monthly expenses to provide service to RNG producers. The Access
Fee will provide a return to Intermountain for granting access to its distribution facilities. The
Company states the Access Fee “will be recorded as non-utility revenue for Intermountain.” Id.
YOU ARE FURTHER NOTIFIED that the Company plans to update the Maintenance
Fee annually. The new fee will be calculated each September based on actual expenses for the
September 1 through August 31 time period. To align with the Company’s Purchased Gas
Adjustment price changes, Intermountain proposes the new fee take effect October 1 of each year.
YOU ARE FURTHER NOTIFIED that, in order to compute Intermountain’s
proportionate regulatory fee assessment to the Commission, the Company proposes to include all
revenues from RNG access service in its gross operating revenues. See Idaho Code §§ 61-1001
through 61-1008.
YOU ARE FURTHER NOTIFIED that Intermountain proposes that natural gas service
to RNG producers be billed at Intermountain’s standard tariffed rates. (RNG producers often use
natural gas in their operations and receive natural gas delivery from Intermountain.)
YOU ARE FURTHER NOTIFIED that, consistent with its intent that utility customers
not bear any of the cost associated with providing RNG producers access to its distribution system,
Intermountain requests it be permitted to gross up an RNG producer’s Contribution In Aid of
Construction (“CIAC”) to cover additional income tax generated by a CIAC payment. The
Company seeks to include all capital costs related to an RNG production project in rate base and
then offset the capital costs with the CIAC payment from the RNG producer. However, the
Company points out that under Commission Order No. 21933, “Intermountain is not permitted to
gross up CIACs to cover the additional income tax generated by the CIAC payment.” Application
at 8. Intermountain requests it be permitted to gross up CIACs from RNG producers, which will
then “be booked as utility revenue to offset the additional income taxes and ensure zero financial
impact on utility customers.” Id.
YOU ARE FURTHER NOTIFIED that the Company states its RNG agreements “will
include safety provisions to protect the safety and reliability of service for utility customers.” Id.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34667 3
YOU ARE FURTHER NOTIFIED that Intermountain requests its Application be
processed under Modified Procedure, and that the Commission issue a final order no later than
June 15, 2020.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter, and that it will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Commission’s Rules of Procedure, IDAPA
31.01.01.201 through .204. The Commission notes that Modified Procedure and written comments
have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that anyone desiring to state a position on this
Application must file a written comment in support or opposition with the Commission by May
29, 2020. The comment must explain why the person supports or opposes the Application. Persons
desiring a hearing must specifically request a hearing in their written comments. Written comments
concerning this Application shall be sent electronically, unless e-mail is not available, to the
Commission and the Applicant at the e-mail addresses reflected below:

For the Idaho PUC:

Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]

Street Address for Express Mail:

472 W. Washington Street
Boise, ID 83702-5918

For the Company:

Preston N. Carter
Givens Pursley LLP
601 W. Bannock Street
Boise, Idaho 83702
[e-mail]
[e-mail]

Lori A. Blattner
Director – Regulatory Affairs
Intermountain Gas Company
P.O. Box 7608
Boise, Idaho 83707
[e-mail]

Comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at www.puc.idaho.gov. Click the “Case Comment Form” under

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34667 4
“Consumers,” and complete the comment form using the case number as it appears on the front of
this document. These comments must also be sent to the Applicant.
YOU ARE FURTHER NOTIFIED that Intermountain must file any reply comments
by June 4, 2020.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set, the Commission will consider this matter on its merits and enter its Order
without a formal hearing. If written comments are received within the time limit set, the
Commission will consider them and, in its discretion, may set the same for formal hearing.
O R D E R
IT IS HEREBY ORDERED that Intermountain’s Application be processed by
Modified Procedure, Rule 201-204 (IDAPA 31.01.01.201-.204). Persons interested in submitting
written comments must do so by May 29, 2020. Intermountain must file any reply comments by
June 4, 2020.
IT IS FURTHER ORDERED that parties should continue to comply with Order No.
34602, issued March 17, 2020. All pleadings should be filed with the Commission electronically
and shall be deemed timely filed when received by the Commission Secretary. See Rule 14.02.
Service between parties should also be accomplished electronically. Voluminous discovery-related
documents may be filed and served on CD-ROM or a USB flash drive.
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NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34667 5
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 13th
day of May 2020.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Diane M. Hanian
Commission Secretary

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