20211115Comments.pdf

RILEY NEWTON
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83120
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. II2O2
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Street Address for Express Mail:
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BOISE,ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY'S APPLICATION TO
UPDATE SECTION C OF THE GENERAL
SERVICE PROVISIONS TARIFF ADVICE
NO.21-01
CASE NO. INT.G.21.O5
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Riley Newton, Deputy Attorney General, submits the following comments.
BACKGROUND
On September 24,zlzl,Intermountain Gas Company ("Company") submitted Tariff
Advice No. 21-01 requesting to revise Section C of its General Service Provisions, Installation
and Extension of Natural Gas Mains and Services for Residential and Commercial Customers.
On July 22,2020, the Commission directed the Company to file an annual tariff advice to update
the Allowable Investment Factors ("AIF"), the Service Line Cost per Foot ("SLCPF"), and the
construction overhead charge by October 1, beginningin202l. Order No. 34735. Accordingly,
the Company proposes to update the AIF, the SLCPF, and the construction overhead charge in
Section C of its General Service Provisions.
The Company also seeks to clariff language in the tariff.
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1STAFF COMMENTS NOVEMBER 15, 2021
At the October 12,2021, Decision Meeting, Commission Staff stated they need
additional time to review the Company's filing and recommended that the Tariff Advice be
processed as a formal case to allow for gteater transparency and public input. See October 8,
2021, Decision Memorandum at l. Staff further recommended that the Company's December l,
2021, proposed effective date be suspended and that the case be processed under Modified
Procedure. 1d Staff indicated the Company concurs with the above-mentioned approach, but
that the Company requests an additional 30 days after the Commission's Final Decision on its
proposed revisions to implement the changes to its systems and forms. Id. at 2.
The Commission converted the Tariff Advice into an Application, issued a Notice of
Application, sets comment deadlines for interested persons and for the Company's reply, and
suspended the Company's proposed effective date.
STAFF REVIEW
Staff reviewed the Company's Application and has come to the following conclusions:
l. The methods used to update the Allowable Investment Factors, the Service Line
Cost per Foot, and the construction overhead charge are reasonable and consistent
with the methods approved in Commission Order No. 34735; and
2. The proposed language revisions are reasonable and should be approved.
Each of the conclusions are discussed in more detail below.
Allowable Investment Factors
Staff reviewed the Company's method for updating the Allowable Investment Factors
and agrees with the values proposed. AIF are used to calculate the Allowance Investment for a
line extension project. The Company's Line Extension Policy uses an embedded cost method to
determine the Allowable Investment. The Allowable Investment is calculated by multiplying the
estimated annual therm usage by the AIF. These Investment Factors are derived using the
present values of the embedded cost of Mains and Services from the Company's last general rate
case.
The Company's method for updating AIF in this case is consistent with the method
approved in Commission Order No. 34735. In this Application, the Company updated the
compound inflation factor to include inflation data from June 2019 to December 2020 and
2STAFF COMMENTS NOVEMBER 15,202I
updated depreciation lives of various distribution plant to reflect dates approved in Case
No. INT-G-21,-01. See Order No. 35134.
Service Line Cost per Foot
Staff reviewed the Company's calculation for updating the Service Line Cost per Foot
and agrees with the proposed value. Staff audited SLCPF on a representative sample of service
line extension projects and found no misstatement in the feet installed for each year as well as
the costs to install the line in that year. The estimated cost to install a service line in the
Company's Line Extension Policy is determined by multiplying the on-property service line
length by the SLCPF.
The Company's calculation for the SLCPF is based on a three-year a,verage including
years 2017,2018, and 2019. The Company did not include 2020 in the calculation, because, as
the Company responded to Audit Request No. 2, it does not typically finish mapping the new
installations until the summer of the next year. As of the date of the Company's response,
October 27 , 2021 , it has yet to finish mapping the service lines installed in 2020. Ideally, Staff
would recommend including the most recent information available to determine the SLCPF;
however, including such information would unnecessarily delay the update process in this case.
The SLCPF is used to calculate the Contributions in Aid of Construction paid for by the
customer. Actual plant in service is based on actual project costs. Staff accepts the calculation
without the 2020 information.
Overhead Charge
Staff reviewed the Company's method for determining the overhead charge and agrees
with the amount. The overhead charge is used to determine the project cost for main extensions
in the Company's Line Extension Policy. The method used in this case is consistent with the
method approved in Commission Order No. 34735.
Language Revisions
Staff recommends approval of the proposed language revisions in the tariff to eliminate
ambiguity. The first proposed revision is in section a.2@) of the tarifl which removes an
ambiguous reference to "Non-discretionary load" and replaces it with the word "Gas". The
JSTAFF COMMENTS NOVEMBER I5, 2021
second proposed revision removes the reference to o'sfubs" in section 5.3 because stubs are not
included in the main project cost estimate.
CUSTOMER NOTICE
Staff reviewed the Company's customer notice and determined that it meets the
requirements of Rule 125 of the Commission's Rules of Procedure, IDAPA 31.01.01. The notice
was mailed to the relevant customers on October 14,2021, providing a reasonable opportunity to
timely file comments with the Commission by the November 15, 2021, comment deadline. As
of Friday, November 12,2021, the Commission has received no corlments from customers.
STAFF RECOMMENDATIONS
Staff believes the Company's proposals are reasonable and conform with Commission
Order No. 34735. Staff recommends the Company's proposed AIF, the SLCPF, the construction
overhead charge, and tariff language revisions be approved with an effective date 30 days after
the Commission's Final Decision.
Respectfully submitted this I 5* day of November 2021.
Riley ewton
Deputy Attorney General
Technical Staff: Michael Eldred
Kevin Keyt
i:umisc/commentVintg2 l.5mmeksk comments
4STAFF COMMENTS NOVEMBER 15,2021
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS I5TH DAY OF NOVEMBER 2021,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. INT-G.21-05, BY E.MAILING A COPY THEREOF, TO THE
FOLLOWING:
LORI BLATTNER
DIR _ REGULATORY AFFAIRS
INTERMOTiNTAIN GAS CO
PO BOX 7608
BOISE ID 83707
E-MAIL: [e-mail]
PRESTON N CARTER
GTVENS PURSLEY LLP
60I W BANNOCK ST
BOISE ID 83702
E-MAIL: prestoncarter@ eivenspursley.com
harmonywri ght@ eivenspursley. com
SECRETARY
CERTIFICATE OF SERVICE