20220927Final_Order_No_35538.pdf

ORDER NO. 35538 1

Office of the Secretary
Service Date
September 27, 2022

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On August 10, 2022, Intermountain Gas Company (“Company”), applied for authority
to implement new rate schedules that will reduce the Company’s annualized revenues by
approximately $7.7 million, effective October 1, 2022. Application at 2. If approved, the
Company’s proposal would decrease the price of natural gas for residential customers by 2.54%,
decrease the price for GS-1 General Service customers 1.76%, decrease the price for LV-1 Large
Volume customers 0.33%, and decrease the price for T-3 Transportation customers 4.14%,
decrease the price for T-4 Demand Charge customers 0.56%, and not change the prices for T-4
Transportation customers. Under the Company’s proposed adjustment, the typical residential
customer’s bill would decrease by $1.36 or 2.5%. Id. at News Release. The Company requested
that this matter be processed by modified procedure.
On August 22, 2022, the Commission issued a Notice of Application and Notice of
Modified Procedure establishing public comment and Company reply deadlines. Commission
Staff filed comments to which the Company did not reply. No other public comments were
received.
Having reviewed the record, the Commission now issues this Order approving the
Company’s Application.
BACKGROUND
The Company’s Purchased Gas Adjustment (“PGA”) is a Commission approved
mechanism that adjusts rates up or down to reflect changes in the Company’s costs to buy natural
gas from suppliers—including changes in transportation, storage, and other related costs. The
Company defers these costs into its PGA account and then passes them on to customers through
an increase or decrease in rates. Prices related to the cost of gas were approved in Order No. 35479,
Case No. INT-G-22-02.

IN THE MATTER OF INTERMOUNTAIN
GAS COMPANY’S APPLICATION TO
CHANGE ITS PRICES
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CASE NO. INT-G-22-04

ORDER NO. 35538
ORDER NO. 35538 2

THE APPLICATION
The Company proposed to pass through to each of its customer classes changes in gas-
related costs resulting from (1) costs billed to the Company from firm transportation providers
including Northwest Pipeline, LLC; (2) a decrease in the Company’s Weighted Average Cost of
Gas (“WACOG”); (3) an updated customer allocation of gas-related costs pursuant to the
Company’s PGA provision; (4) inclusion of temporary surcharges and credits for one year relating
to natural gas purchases and interstate transportation cost from the Company’s deferred gas cost
account; (5) benefits resulting from the Company’s management of its storage and firm capacity
rights on various pipeline systems; (6) benefits associated with the sale of liquified natural gas
from the Company’s Nampa, Idaho facility; (7) the recovery of deferred in-person customer
payment fees; and (8) a refund of over-collected Residential Energy Efficiency funds. The
Company represented that these changes, if approved, will result in a price decrease to all of the
Company’s customers.
The Company also explained that the proposed rate changes would be allocated to
customer classes through its PGA provision.
The Company provided supporting exhibits that show the overall price changes by
customer class. The Company also summarized price changes and proposed rate schedules and
tariff sheets.
The Company also requested an elimination of the temporary credits included in its
current prices during the past 12 months per Order No. 35182, Case No. INT-G-21-04.
STAFF COMMENTS
Staff reviewed the Company’s Application, Workpapers, and Exhibits, concluding that
the PGA proposal would not affect the Company’s earnings; the deferred costs were prudently
incurred, and properly calculated; and the Company’s WACOG was reasonable. Staff
recommended that the Commission (1) approve the Company’s Application decreasing revenues
by $7,702,586, and approve the new WACOG amount of $0.39216 per therm; (2) approve the
Company’s proposed Tariff Rate Schedules RS, GS-1, IS-R, IS-C, LV-1, T-3, and T-4, as filed;
(3) direct the Company to continue filing quarterly reports reflecting deferred gas costs and
WACOG projections; (4) direct the Company to file an adjustment to its PGA-related rates, if gas
prices significantly deviate from projections; and (5) accept late-filed comments from customers
concerning the Company’s Application.
ORDER NO. 35538 3

Staff calculated the impact of the proposed changes on the annual revenue and
confirmed that the changes would decrease annual revenue by approximately $7.7 million. Staff
also reviewed the impact of eliminating temporary credits authorized by Order No. 35182, Case
No. INT-G-21-04, the WACOG historical data and the proposed WACOG decrease from $0.42405
per therm to $0.39216 per therm, and the Company’s projected costs to purchase natural gas. Staff
also evaluated the Lost and Unaccounted for Gas and Line Break Rate (“LAUF rate”), the rate
case expenses, including amortization, the payment fees deferral account, and the one-time
residential energy efficiency credit return of $4,850,000 to residential customers as proposed in
Case No. INT-G-22-05. Staff’s review confirmed the conclusions in the Company’s proposal, and
supported the Company’s requested adjustments.
Staff examined the Company’s risk management strategies on using market purchases,
storage and interstate transportation capacity, the reason for the liquefied natural gas (“LNG”)
sales decline at the Nampa LNG facility, and Company procedures for maintaining and releasing
pipeline capacity. Staff was able to confirm the risk management strategies minimized risk to
ratepayers, and that the Company’s explanations were accurate.
Finally, Staff recommended that the Company file its Deferred Gas Balances reports
quarterly, because the Company has committed to notify the Commission if an interim filing might
be needed. Staff also determined that the customer notice and press release were sufficient, but
urged the Commission to allow late-filed comments given the timing of the notice.
COMMISSION FINDINGS AND DECISION
The Company is a gas corporation and public utility, and the Commission has
jurisdiction over it and the issues in this case under Title 61 of the Idaho Code, and more
specifically, Idaho Code §§ 61-117, 61-129, 61-307, 61-501, and 61-502. The Commission must
establish just, reasonable, and sufficient rates for utilities subject to its jurisdiction. Idaho Code §
61-502. Based on our review of the record, we find that the Company’s proposed changes to the
WACOG to $0.39216 per therm for the Company’s RS, GS-1, IS-R, IS-C, LV-1, T-3, and T-4
customer classes is appropriate and accurately captures the Company’s prudently incurred variable
gas-related costs.
The Company presented persuasive evidence justifying the adjustment based on (1)
costs billed to the Company from firm transportation providers including Northwest Pipeline,
LLC; (2) a decrease in the Company’s WACOG; (3) an updated customer allocation of gas-related
ORDER NO. 35538 4

costs pursuant to the Company’s PGA provision; (4) inclusion of temporary surcharges and credits
for one year relating to natural gas purchases and interstate transportation cost from the Company’s
deferred gas cost account; (5) benefits resulting from the Company’s management of its storage
and firm capacity rights on various pipeline systems; (6) benefits associated with the sale of LNG
from the Company’s Nampa LNG facility; (7) the recovery of deferred in-person customer
payment fees; and (8) a refund of over-collected Residential Energy Efficiency funds as proposed
in Case No. INT-G-22-05. We thus find it fair, just, and reasonable to approve the Company’s
proposed schedule changes, as filed, effective October 1, 2022.
We also find that quarterly reports reflecting deferred gas costs and WACOG
projections provide useful information and assist Staff with determining whether to audit earlier
than planned and whether an interim filing might be needed.
ORDER
IT IS HEREBY ORDERED that the Company’s Application to approve the new
WACOG amount of $0.39216 per therm, to take effect on October 1, 2022, is approved, as filed.
IT IS FURTHER ORDERED that the Company’s proposed Tariff Rate Schedules RS,
GS-1, IS-R, IS-C, LV-1, T-3, and T-4, are approved, as filed.
IT IS FURTHER ORDERED that the Company file its Deferred Gas Balances reports
quarterly. The Company shall notify the Commission promptly if an interim filing is needed.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order regarding any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. Idaho Code § 61-626.

ORDER NO. 35538 5

DONE by Order of the Public Utilities Commission at Boise, Idaho this 27th day of
September 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND JR., COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\GAS\INT-G-22-04 PGA\orders\INTG2204_final_cs.docx