20200522Decision Memo.pdf

DECISION MEMORAI\DUM
TO:COMIVII SSIONER KJELLAI\DER
COMN{ISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:MATT HUNTER
DEPUTY ATTORNEY GENERAL
DATE: MAY 22,2020
SUBJECT:IN THE MATTER OF INTERMOUNTAIN GAS COMPAIYY'S
APPLICATION FOR AUTHORITY TO FACILITATE RENEWABLE
NATURAL GAS ACCESS; CASE NO.INT-G-20-03.
On May 4, 2020, lntermountain Gas Company ("lntermountain" 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. Application at 2. Intermountain requested approval of its RNG facilitation plan by June
15,2020. Id. at 10,
On May 13, 2020, the Commission issued a Notice of Application and Modified
Procedure, setting a May 29,2020 comment deadline and a June 4,2020 reply comment deadline.
Order No. 34667.
THE COMPANY'S MOTION FOR CLARIFICATION
On May 20,2020, lntermountain filed a Motion for Clarification Regarding Customer
Notice requesting the Commission determine whether direct notice of the Application to all of
lntermountain's customers is required. Company's Motion at l. While Intermountain believes
direct notice is not required under the Commission's Rules of Procedure because lntermountain is
not requesting a change in rates, the Company seeks clarification from the Commission in order
to avoid delay in the case due to notice issues. Id. at 3.
The Company has already provided direct notice to RNG producers by sending a letter
to each producer who may be affected by the Company's proposal. Id- at l; see Application at7'
8. The Company notes procedural Rule 125, IDAPA 31.01.01.125, requires direct notice to utility
IDECISION MEMORANDUM
customers when a utility proposes to change rates for utility customers. Company's Motion at 2.
The Company asserts its Application "does not seek to change rates for Intermountain's utility
customers, but instead proposes measures to fully insulate utility customers from rate impacts."
Id. at l; see Application at 7-8. Therefore, the Company does not believe direct notice to customers
of the Application is required by Commission rules. Company's Motion at 2.
lntermountain states it previously considered providing direct notice to all customers
but decided against it because, in addition to not being required by Commission rules, such notice
might cause confusion among utility customers. Id. The Company "particularly wanted to avoid a
situation in which customers perceived that lntermountain was proposing to purchase RNG, was
proposing to provide RNG to its customers, or that lntermountain was proposing any action with
respect to RNG other than allowing the producer access to Intermountain's system for the producer
to transport RNG to the producer's eventual end use customers." Id. at2-3.
Intermountain asserts it is seeking clarification from the Commission because it is
aware of recent Commission cases in which direct notice to customers was provided under
circumstances not required by the Commission's rules. Id. at 3. The Company cites Case No.
GSW-W-19-01 as an example.r Id.Becatse "Intermountain would like to avoid a delay in the case
due to notice issues," the Company "requests that the Commission clariff what type of customer
notice is required in this case." Id.
If the Commission orders direct notice to all customers, Intermountain states it will
include customer notices with bills beginning May 28, 2020. Id. Because of the billing cycle, it
will take lntermountain through June 26, 2020 to reach all of its custom ers. Id. In its Application,
lntermountain proposed a June 1.5,2020 effective date for its RNG facilitation plan. If direct notice
to all customers is ordered by the Commission, lntermountain proposes the Commission suspend
the proposed effective date until July 15, 2020 to allow all customers to receive direct notice and
have an opportunity to comment on the Application.ld.
1 In Case No. GSW-W-19-01, Gem State Water Company, LLC applied to the Commission for approval of its
acquisition of the water business assets of rwo small regulated water corporations. In its application, Gem State Water
asserted the rates and charges paid by customers of the trro small water corporations would be maintained post-
acquisition. While deliberating on the case, the Commission noted the two small water corporations had not notified
their customers about the proposed acquisitions. The Commission declined to issue a final order until the record
reflected that the customers of the two small water corporations had been notified of the proposed acquisitions and
had been given an opportunity to comment. Gem State Water swiftly mailed notice to these customers, and a new
comment period was set by the Commission. Jee Order No.34579.
DECISION MEMORANDUM 2
STAFF RECOMMENDATION
Staff does not believe the Commission's Rules of Procedure require the Company to
provide direct notice of its Application to its customers. Rule 125 requires a utility to provide direct
notice to its customers (either as a bill stuffer or as a separate mailing) if the utility is requesting a
rate change. A rate change includes an "increase, decrease or change [to] any rate, fare, toll, rental
or charge or any classification, contract, practice, rule or regulation resulting in any such increase,
decrease or change. .." See IDAPA 31.01.01.121.01. The standard for direct notice in Rule 125
can be roughly summarized as follows: if the utility's proposal will cause an increase or decrease
in rates for any customer class, direct notice must be given to the utility's customers.
The Company asserts RNG producers are not utility customers, and that granting them
access to the Company's distribution system will not impact utility customers in any way. See
Application at 7; Company's Motion at l. At this point, Staffhas no reason to expect a contrary
result. Therefore, Staff believes direct notice to customers is not required.
However, Staff believes it would be in the public interest for lntermountain to noti$
its customers of the Application through mediums other than direct mail. Intermountain has only
recently begun to facilitate RNG producer access to its distribution system. It is difficult to predict
what issues will arise as more and more RNG producers put RNG into lntermountain's distribution
system. Realistically, the RNG will mix with Intermountain's natural gas and be used by the
Company's customers. Customers may have safety and quality concems about RNG making up a
percentage of the natural gas they use in their homes and businesses. Customers may also be
interested in how the Company will keep RNG producer access expenses separate from the
Company's utility business. Regardless, customers should be made aware of a new aspect to
Intermountain's business that is closely tied to its public utility services.
Therefore, Staff recommends the Commission clarifu that, while direct notice is not
necessary in this case, the Company shall attempt to provide notice to its customers through
multiple electronic mediums. For example, the Company might email notice to those customers
for which the Company has an email, post notifications on various social media platforms, post a
notification on the Company's website, and issue a press release. Staffbelieves this or a similar
combination of mediums would provide reasonable notice of the Application to Intermountain's
customers.
JDECISION MEMORANDUM
COM1VtrSSION DECISION
Does the Commission wish to:
l. Clarit/ that direct notice of the Application to all of Intermountain's customers is
required, and that the Company shall provide direct notice through customer bills
or a separate mailing?
a. If so, does the Commission wish to:
i. Set a July 3,2020 comment deadline?
ii. Set a Iuly 8,2020 reply comment deadline?
iii. Suspend Intermountain's proposed effective date until July 15,
2020?
2. Clarit, that, rather than direct notice through customer bills or a separate mailing,
Intermountain shall notiS its customers of the Application through multiple
electronic mediums (email, social media, the Company's website, a press release,
etc.)?
3. Clari8, that direct notice to lntermountain's customers is not required for this
Application, and that the Company has already provided sufficient notice by
sending letters to all RNG producers who may be affected by the Application?
Matt Hunter
Deputy Attomey General
I:V,8.I\GASUNT4-20-03UNTG20O3 d* mcmo_mh2.dcx
4DECISION MEMORANDUM