HomeMy WebLinkAbout20210628Settlement Comments.pdfDAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-007 4
(208) 334-0312
BAR NO. 99I7
Street Address for Express Mail:
I I33I W. CHINDEN BLVD, BLDG 8, SUITE 20I-A
BOISE, IDAHO 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN GAS
COMPANY'S APPLICATION FOR APPROVAL
TO CHANGE DEPRECIATION AND
AMORTIZATION RATES
CASE NO. INT.G.21-01
SETTLEMENT COMMENTS OF
THE COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Dayn Hardie, Deputy Attomey General, and in response to the Notice of
Proposed Settlement and Notice of Amended Deadlines issued in Order No. 35070 on June 14,
2021, in Case No. INT-G-21-01. Staff hereby submits the following comments.
BACKGROUND
On January 12,202l,lntermountain Gas Company ("Company") applied to the
Commission requesting authority to decrease its depreciation and amortization rates from a
combined 2.97 percentto 2.55 percent.
On February 8,2021, the Commission issued a Notice of Application and Notice of
Intervention Deadline. Order No. 34914. No one petitioned to intervene.
On March 78,2021, the Commission issued a Notice of Modified Procedure setting a
June 8, 2021, public comment deadline and a June22,202l, Company reply deadline.
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STAFF COMMENTS JUNE 28,2021
Subsequently, Staff and the Company (individually, "ParQ/" or collectively, "Parties") entered
settlement negotiations. Staff and the Company attended two settlement conferences.
On June 3,2021, the Company filed a settlement and stipulation ("Settlement") and a
Motion for Approval of Stipulation and Settlement requesting Commission approval of the
Settlement.
At the June 8, 2021, decision meeting, Staff recommended issuing a Notice of Proposed
Settlement and vacating the public comment deadline and issuing a Notice of Amended Public
Comment Deadline. At the meeting, the Commission discussed Staff s recommendation to
vacate the public comment deadline and decided to allow more time for public comment and the
Company's reply than was recommended by Staff.
On June 14,2021, the Commission issued the Notice of Proposed Settlement and Notice
of Amended Comment Deadlines.
The Parties agreed to terms to update the Company's depreciation and amortization rates.
The Parties agreed as follows:
1. The Parties agree to the depreciation and amortization rates as set forth on Settlement
ExhibitNo. l, Col. (o).
2. Settlement Exhibit Nos. 2 and 3 provide supporting calculations, including the
retirement rate analysis and detailed depreciation calculations, for the plant accounts that
changed from the original Application as a result of this Settlement, including: Account
363 (including all the subaccounts listed in Settlement Exhibit No. 3, Pages 2-6),
Account 367, Account376, Account 378, Accoturt 380, and Account 390. The Parties
agree that the depreciation and amortization rates for all other plant accounts should be
approved as set forth in the Application.
3. If approved by the Commission, the rates would reflect an effective combined
depreciation and amortization rate of 2.41percent. See Settlement Exhibit No. l, Line
41, Col. (o).
4. The Parties agree that the rates reflected on Settlement Exhibit No. 1, Col. (o), if
approved by the Commission, will be effective as of January 1,2021.
5. The Panies agree that the reduction in accruals, as reflected on Settlement Exhibit No. l,
Col. (q) shall be defened starting on July 1,2023, unless the reduction in depreciation
rates have previously been incorporated into base rates through an order from this
Commission.
2STAFF COMMENTS JLINE 28,2021
STAFF ANALYSIS
Staff recommends the Commission accept the filed Settlement. Staff believes the
Settlement better reflects the average service life estimate, rate of projected retirements, and net
salvage percent when compared to the Company's original study.
Staff fully reviewed the Company's request to change depreciation and amortization
rates. Staff analyzed in part, focused on the study's estimation of service lives using plant
historical data for six of the largest asset accounts. Staff s analysis for these accounts indicate a
difference in the accounts' average service life estimate and rate of projected retirements
compared to the study. For depreciation, these characteristics in accounts having differing ages
or vintages of assets are expressed in a system of curves known as the Iowa curves. Staff also
reviewed and analyzed the historical net salvage percentages for the Company's asset accounts
to determine reasonable net salvage values going forward until the next depreciation case. Staff
believes the referenced Settlement now better reflects the average service life estimate, rate of
projected retirements, and net salvage for these six accounts (See table below).
Staff analyzed the effective date, the effect on customers, and the earnings impact on the
Company. The change in booking these depreciation rates should be effective January 1,2021.
The reduction in depreciation accruals should be deferred beginning July 1, 2023, unless
previously reflected in customer base rates. Staff believed these dates are reasonable.
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ACCOL,tIT
NUMBER
DESCRIPTION ORIGINAL
COST
COMPANY
IOWA
CURVE
STIPULATION
IOWA CURVE
NET
SALVAGE
PERCENTAGE
363 MEASURE AND REGULATOR
EQUIPMENT. NAMPA
$ 15,3 7 r,800 37-R2.5 47-54 -l7o/o
367 TRANSMISSION - MAINS s69,500,532 58-R3 63-R4 -35Yo
376 DISTRIBUTION. MAINS $212.220.651 68-R4 70-R3.5 -48Yr
378 MEASURE AND REGULATOR
STATION EQUIPMENT
$ r 3,035,034 42-R1.5 43-R1.5 -25%
380 SERVICES $l82,3r4,583 56-R3 58-R3 -7 4o/"
390 STRUCTURES & IMPROVEMENTS $26,670,225 42-R2 50-R2 5%
STAFF COMMENTS JtrNE 28,2021
STAT'T RECOMMENDATIONS
Staffrecommends the Commission accept the filed Settlement.
Respectfrrlly submiued A, Zib day of June 2ozl.
Dayn
Deputy Attomey General
Technical Staff: Terri Carlock
4STAFF COMMENTS JI.JNE 28,2021
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 28TH DAY OF JUNE 2021,
SERVED THE FOREGOING SETTLEMENT COMMENTS OF THE COMMISSION
STAFF, IN CASENO. INT-G-21-01, BY E-MAILING A COpy THEREOF, TO THE
FOLLOWING:
LORI BLATTNER
DIR _ REGULATORY AFFAIRS
INTERMOUNTAIN GAS CO
PO BOX 7608
BOISE ID 83707
E-MAIL : lori.blattner@intgas.com
PRESTON N CARTER
GIVENS PURSLEY LLP
601 W BANNOCK ST
BOrSE rD 83702
E-MAIL: orestoncarter@ givenspursley.com
kendrah@ eivenspurs ley. com
SECRETARY
CERTIFICATE OF SERVICE