20221201Bulkley Direct with Exhibits.PDF

Preston N. Carter, ISB No. 8462
Morgan D. Goodin, ISB No. 11184
Blake W. Ringer, ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, Idaho 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]

Attorneys for Intermountain Gas Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
)
)
)
)
)
)
)
CASE NO. INT-G-22-07

DIRECT TESTIMONY OF ANN E. BULKLEY
FOR INTERMOUNTAIN GAS COMPANY
December 1, 2022

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A. BULKLEY, DI
INTERMOUNTAIN GAS
Please state your name and business address. 1
A. My name is Ann E. Bulkley. My business address is One Beacon Street, Suite 2600, 2
Boston, Massachusetts 02108. I am a Principal at The Brattle Group (“Brattle”), a 3
consulting firm that advises clients on regulatory finance and ratemaking issues. 4
On whose behalf are you submitting this Prepared Direct Testimony? 5
A. I am submitting this testimony before the Idaho Public Utilities Commission 6
(“Commission”) on behalf of Intermountain Gas Company (“Intermountain” or “the 7
Company”). 8
Please describe your education and experience. 9
A. I hold a Bachelor’s degree in Economics and Finance from Simmons College and a 10
Master’s degree in Economics from Boston University, with more than 25 years of 11
experience consulting to the energy industry. I have advised numerous energy and utility 12
clients on a wide range of financial and economic issues with primary concentrations in 13
valuation and utility rate matters. Many of these assignments have included the 14
determination of the cost of capital for valuation and ratemaking purposes. I have included 15
my resume and a summary of testimony that I have filed in other proceedings as Exhibit 16
No. 1. 17
PURPOSE AND OVERVIEW OF DIRECT TESTIMONY 18
Please describe the purpose of your testimony. 19
A. The purpose of my Direct Testimony is to present evidence and provide a recommendation 20
regarding the appropriate return on equity (“ROE”) for the Company and to assess the 21
reasonableness of its proposed capital structure for ratemaking purposes. 22
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A. BULKLEY, DI
INTERMOUNTAIN GAS
Are you sponsoring any schedules in support of your Direct Testimony? 1
A. Yes. My analysis and recommendations are supported by the data presented in Exhibit No. 2
2 through Exhibit No. 12, which were prepared by me or under my direction. 3
Please provide a brief overview of the analyses that led to your ROE recommendation. 4
A. I estimated the Company’s Cost of Equity (“COE”) by applying several traditional COE 5
estimation methodologies to a proxy group of comparable utilities including, Discounted 6
Cash Flow (“DCF”), Capital Asset Pricing Model (“CAPM”), Empirical CAPM 7
(“ECAPM”), and Bond Yield Risk Premium (“BYRP” or “Risk Premium”) analysis. My 8
recommendation also takes into consideration: (1) the Company’s small size, relative to 9
the proxy group, (2) the Company’s actual and anticipated capital expenditure 10
requirements, (3) the Company’s regulatory risk as compared with the proxy group, (4) the 11
Company’s service territory risk as compared to the proxy group, and (5) Flotation Costs. 12
Finally, I considered the Company’s capital structure as compared with the capital 13
structures of the proxy companies. 1 While I did not make any specific adjustments to the 14
ROE recommendation for any of these factors individually, I did take them into 15
consideration in aggregate when determining where the Company’s ROE falls within the 16
range of analytical results. 17
How is the remainder of your Direct Testimony organized? 18
A. Section II provides a summary of my analyses and conclusions. Section III reviews the 19
regulatory guidelines pertinent to the development of the cost of capital. Section IV 20
discusses current and projected capital market conditions and the effect of those conditions 21

1 The selection and purpose of developing a group of comparable companies will be discussed in detail in Section
V of my Direct Testimony.
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A. BULKLEY, DI
INTERMOUNTAIN GAS
on the cost of equity. Section V explains the selection of a proxy group of natural gas 1
distribution utilities. Section VI describes the analyses and analytical basis for the 2
recommendation of an appropriate ROE for Intermountain. Section VII provides a 3
discussion of specific regulatory, business and financial risks that directly affect the ROE 4
to be authorized for the Company in this case. Section VIII addresses the Company’s 5
capital structure as compared with the capital structures of the utility operating company 6
subsidiaries of the proxy group companies. Section IX presents my conclusions and 7
recommendations. 8
SUMMARY OF ANALYSIS AND CONCLUSIONS 9
Please summarize the key factors considered in your analyses and upon which you 10
base your recommended ROE. 11
A. In developing my recommended ROE for Intermountain, I considered the following: 12
 The United States Supreme Court’s Hope and Bluefield decisions that established the 13
standards for determining a fair and reasonable allowed ROE, including consistency of 14
the allowed return with the returns of other businesses having similar risk, adequacy of 15
the return to provide access to capital and support credit quality, and the requirement 16
that the result lead to just and reasonable rates.2 17
 The effect of current and projected capital market conditions on ROE estimation 18
models and on investors’ return requirements. 19
 The results of several analytical approaches that provide estimates of the Company’s 20
cost of equity. Because the Company’s required COE should be a forward-looking 21

2 Hope, 320 U.S. 591 (1944); Bluefield, 262 U.S. 679 (1923).
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A. BULKLEY, DI
INTERMOUNTAIN GAS
estimate, these analyses rely on forward-looking inputs and assumptions (e.g., 1
projected analyst growth rates in the DCF model, forecasted risk-free rate and Market 2
Risk Premium in the CAPM analysis, etc.) 3
 The Company’s regulatory, business, financial and regulatory risks relative to the proxy 4
group of comparable companies, and the implications of those risks in determining an 5
appropriate ROE for the Company over the period during which rates will be in effect. 6
Please explain how you considered those factors. 7
A. I relied on the range of results produced by the Constant Growth DCF model, the CAPM 8
and ECAPM, and a Risk Premium analysis. As shown in Figure 1, these COE estimation 9
models produce a wide range of results. My conclusion as to the appropriate ROE for 10
Intermountain within that range of results is based on Intermountain’s business and 11
financial risk relative to the proxy group and my assessment of market conditions. 12
Although the companies in my proxy group are generally comparable to Intermountain, 13
each company is unique, and no two companies have the exact same business and financial 14
risk profiles. Accordingly, I considered the Company’s business, financial and regulatory 15
risk in aggregate relative to that of the proxy group companies when determining where 16
the Company’s ROE should fall within the reasonable range of analytical results to 17
appropriately account for any residual differences in risk. 18
Q. Please summarize the results of the COE estimation models that you considered to 19
establish the range of the COE for Intermountain. 20
A. Figure 1 summarizes the range of results produced by the Constant Growth DCF, CAPM, 21
ECAPM, and Bond Yield Risk Premium analyses. 22
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A. BULKLEY, DI
INTERMOUNTAIN GAS
Figure 1: Summary of Cost of Equity Analytical Results 1
2
As shown in Figure 1 (and in Exhibit No. 2), the range of results produced by the 3
COE estimation models is wide. While it is common to consider multiple models to 4
estimate the cost of equity, it is particularly important when the range of results varies 5
considerably across methodologies. As a result, my ROE recommendation considers the 6
range of results of the Constant Growth DCF model, as well as the results of the CAPM, 7
ECAPM, and Bond Yield Plus Risk Premium analyses. My ROE recommendation also 8
considers Intermountain’s company-specific risk factors and current and prospective 9
capital market conditions. 10
What is your conclusion regarding the appropriate authorized ROE for 11
Intermountain in this proceeding? 12
A. Based on the analytical results presented in Figure 1, my assessment of current and 13
anticipated capital market conditions, and the Company’s business, financial and 14
regulatory risk relative to proxy group companies, I conclude that a ROE in the range of 15
7.00%7.50%8.00%8.50%9.00%9.50%10.00%10.50%11.00%11.50%12.00%12.50%13.00%
CAPM
ECAPM
Constant Growth DCF -Mean
Constant Growth DCF -Median
Risk Premium
Recommended ROE
Recommended ROE Range
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A. BULKLEY, DI
INTERMOUNTAIN GAS
9.90 percent to 10.75 percent is reasonable. Considering underlying market conditions and 1
the business, financial and regulatory risk factors facing Intermountain, including the 2
Company’s small size compared to proxy group, significant capital expenditures and lack 3
of any mechanism to provide for recovery between rate cases, I believe an ROE of 10.30 4
percent is reasonable and appropriate. 5
Please summarize your analysis of the appropriate ratemaking capital structure for 6
the Company. 7
A. Based on the analysis presented in Section VIII of my testimony, I conclude that 8
Intermountain’s proposed 50.00 percent common equity ratio is reasonable. To determine 9
if Intermountain’s requested capital structure was reasonable, I reviewed the capital 10
structures of the utility subsidiaries of the proxy companies. As shown in Exhibit No. 12, 11
the results of that analysis demonstrate that the average equity ratios for the utility 12
operating companies of the proxy group range from 48.73 percent to 61.47 percent, with 13
an average of 56.41 percent. Comparing the recommended equity ratio to the proxy group 14
demonstrates that the Company’s requested equity ratio is well below the average equity 15
ratio for the utility operating subsidiaries of the proxy group companies. Further, the 16
Company’s proposed equity ratio is reasonable considering the negative effects from Tax 17
Cuts and Jobs Act of 2017 (“TCJA”) on coverage ratios and increased capital expenditures 18
on the cash flows and credit metrics of regulated utilities. 19
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A. BULKLEY, DI
INTERMOUNTAIN GAS
REGULATORY GUIDELINES 1
Please describe the guiding principles to be used in establishing the cost of equity for 2
a regulated utility. 3
A. The United States Supreme Court’s precedent-setting Hope and Bluefield cases established 4
the standards for determining the fairness or reasonableness of a utility’s allowed ROE. 5
Among the standards established by the Court in those cases are: (1) consistency with other 6
businesses having similar or comparable risks; (2) adequacy of the return to support credit 7
quality and access to capital; and (3) the principle that the result reached, as opposed to the 8
methodology employed, is the controlling factor in arriving at just and reasonable rates.3 9
Has the Commission provided similar guidance in establishing the appropriate return 10
on common equity? 11
A. Yes. In Intermountain’s last rate case in 2016, the Commission findings were based on the 12
standards established in Hope and Bluefield: 13
The standards for determining a fair ROE for a regulated utility have been 14
framed by two decisions of the U.S. Supreme Court: Bluefield Water Works 15
& Improvement Co. v. Public Serv. Commission of West Virginia, 262 U.S. 16
679 (1923), and Federal Power Commission v. Hope Natural Gas Co., 320 17
U.S. 591 (1944). In these cases, the Court provided that the authorized ROE 18
should be: (1) sufficient to maintain financial integrity; (2) sufficient to 19
attract capital under reasonable terms; and (3) commensurate with returns 20
investors could earn by investing in other enterprises of comparable risk. In 21
line with these decisions, the Idaho Supreme Court has stated “that the 22
primary objective in ratemaking is to allow the utility to meet its legitimate 23
operating expenses, as well as to pay creditors, provide dividends to 24
shareholders, and maintain its financial integrity so that it might attract new 25
capital.” Application of Citizens Utilities Co., 112 Idaho 1061, 1067, 739 26
P.2d 360, 366 (1987).4 27

3 Hope, 320 U.S. 591 (1944); Bluefield, 262 U.S. 679 (1923).
4 In the Matter of the Application of Intermountain Gas Company to Change Its Rates and Charges for Natural
Gas Service in the State of Idaho, Case No. INT-G-16-02, Order No. 33757, at 7-8 (April 28, 2017).
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A. BULKLEY, DI
INTERMOUNTAIN GAS
This guidance is in accordance with the Hope and Bluefield decisions and the 1
principles that I employed to estimate the ROE for Intermountain, including the principle 2
that an allowed rate of return must be sufficient to enable regulated companies like 3
Intermountain to attract capital on reasonable terms. Furthermore, the methodologies that 4
I have employed are consistent with the Commission’s recognition, as discussed below, 5
that it is important to consider other information beyond the results of the financial model 6
analysis to establish an ROE that is reasonable and reflects the investor-required return. 7
Why is it important for a utility to be allowed the opportunity to earn an ROE that is 8
adequate to attract capital at reasonable terms? 9
A. An ROE that is adequate to attract capital at reasonable terms enables the Company to 10
continue to provide safe, reliable natural gas service while maintaining its financial 11
integrity. That return should be commensurate with returns expected elsewhere in the 12
market for investments of equivalent risk. If it is not, debt and equity investors will seek 13
alternative investment opportunities for which the expected return reflects the perceived 14
risks, thereby inhibiting the Company’s ability to attract capital at reasonable cost. 15
Is a utility’s ability to attract capital also affected by the ROEs that are authorized 16
for other utilities? 17
A. Yes. Utilities compete directly for capital with other investments of similar risk, which 18
include other natural gas and electric utilities. Therefore, the ROE awarded to a utility 19
sends an important signal to investors regarding whether there is regulatory support for 20
financial integrity, dividends, growth, and fair compensation for business and financial 21
risk. The cost of capital represents an opportunity cost to investors. If higher returns are 22
available for other investments of comparable risk, investors have an incentive to direct 23
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INTERMOUNTAIN GAS
their capital to those investments. Thus, an authorized ROE that is not in line with 1
authorized ROEs for other natural gas and electric utilities, on a risk adjusted basis, can 2
inhibit the utility’s ability to attract capital for investment in Idaho. 3
While Intermountain is committed to investing the required capital to provide safe 4
and reliable service, because Intermountain is a subsidiary of MDU Resources, the 5
Company competes with the other MDU Resources subsidiaries for discretionary 6
investment capital. In determining how to allocate its finite discretionary capital resources, 7
it would be reasonable for MDU Resources to consider the authorized ROE of each of its 8
subsidiaries. 9
What are your conclusions regarding these regulatory guidelines? 10
A. The ratemaking process is premised on the principle that a utility must have a reasonable 11
opportunity to recover the return of, and the market-required return on, its invested capital. 12
Because utility operations are capital-intensive, regulatory decisions should enable the 13
utility to attract capital at reasonable terms under a variety of economic and financial 14
market conditions; doing so balances the long-term interests of the utility and its customers. 15
The financial community carefully monitors the current and expected financial 16
condition of utility companies and the regulatory frameworks in which they operate. In that 17
respect, the regulatory framework is one of the most important factors in both debt and 18
equity investors’ assessments of risk. The Commission’s order in this proceeding, 19
therefore, should provide the Company with the opportunity to earn an ROE that is: (1) 20
adequate to attract capital at reasonable terms under a variety of economic and financial 21
market conditions over the period of time that its investment will be recovered; (2) 22
sufficient to reasonably ensure its financial integrity; and (3) commensurate with returns 23
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on investments in enterprises with similar risk. Providing the opportunity to earn a market-1
based cost of capital supports the financial integrity of the Company, which is in the interest 2
of both customers and shareholders. 3
What is the standard for setting the ROE in any jurisdiction? 4
A. The stand-alone ratemaking principle is the foundation of jurisdictional ratemaking. This 5
principle requires that the rates that are charged in any operating jurisdiction be for the 6
costs incurred in that jurisdiction. The stand-alone ratemaking principle ensures that 7
customers in each jurisdiction only pay for the costs of the service provided in that 8
jurisdiction, which is not influenced by the business operations in other operating 9
companies. In order to maintain this principle, the COE analysis is performed for an 10
individual operating company as a stand-alone entity. As such, I have evaluated the 11
investor-required return for Intermountain’s natural gas operations in Idaho. 12
CAPITAL MARKET CONDITIONS 13
Why is it important to analyze capital market conditions? 14
A. The COE estimation models rely on market data that are either specific to the proxy group, 15
in the case of the DCF model, or to the expectations of market risk, in the case of the 16
CAPM. The results of the COE estimation models can be affected by prevailing market 17
conditions at the time the analysis is performed. While the ROE that is established in a 18
rate proceeding is intended to be forward-looking, the analyst uses current and projected 19
market data, specifically stock prices, dividends, growth rates and interest rates, in the COE 20
estimation models to estimate the required return for the subject company. 21
As a result, it is important to consider the effect of these conditions on the COE 22
estimation models when determining the appropriate range and recommended ROE for a 23
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future period. If investors do not expect current market conditions to be sustained in the 1
future, it is possible that the COE estimation models will not provide an accurate estimate 2
of investors’ required return during that rate period. Therefore, it is very important to 3
consider projected market data to estimate the return for that forward-looking period. 4
What factors are affecting the cost of equity for regulated utilities in the current and 5
prospective capital markets? 6
A. The COE for regulated utility companies is being affected by several factors in the current 7
and prospective capital markets, including: 1) persistently high inflation, 2) changes in 8
monetary policy, and 3) rising long-term interest rates. These factors affect the 9
assumptions used in the COE estimation models. In this section, I discuss each of these 10
factors and how they affect the models used to estimate the cost of equity for regulated 11
utilities. 12
What effect do current and prospective market conditions have on the COE for 13
Intermountain? 14
A. As is discussed in more detail in the remainder of this section, the combination of 15
persistently high inflation, and the Federal Reserve’s changes in monetary policy, 16
contribute to an expectation of increased market risk and an increase in the cost of the 17
investor-required return. It is essential that these factors be considered in setting a forward-18
looking ROE. Inflation has recently been at some of the highest levels seen in 19
approximately 40 years. Interest rates, which have increased from the pandemic lows seen 20
in 2020 are expected to continue to increase in direct response to the Federal Reserve’s 21
monetary policy. Since there is a strong historical inverse correlation between interest rates 22
and the share prices of utility stocks (share prices of utility stocks typically fall when 23
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interest rates rise), it is reasonable to expect that investors’ required return for utility 1
companies will also continue to increase. Therefore, COE estimates based solely on 2
current market conditions will understate the COE required by investors during the future 3
period that the Company’s rates determined in this proceeding will be in effect. 4
A. Inflationary Expectations in Current and Project Capital Market Conditions 5
Has inflation increased significantly over the past year? 6
A. Yes. As shown in Figure 2, the YOY change in the Consumer Price Index (“CPI”) published 7
by the Bureau of Labor statistics has increased steadily since the beginning of 2021, rising 8
from 1.37 percent in January 2021. Since that time, and particularly since the start of 2022, 9
inflation has increased steadily, reaching a high of 9.0 percent YOY change in June 2022, 10
which was the largest 12-month increase since 1981 and significantly greater than any level 11
seen since January 2008, in October, CPI decreased to 7.76 percent, which is still at levels 12
not seen since the 1980s. 13
Figure 2: Consumer Price Index—YOY Percent Change January 2008–October 20225 14
15

5 Source: Bureau of Labor Statistics, shaded area indicates a recession.
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What are the expectations for inflation over the near-term? 1
A. The expectation is that inflation will remain elevated over the near-term. This expectation 2
is supported by recent comments of the Chair and Vice Chair of the Federal Reserve. For 3
example, in an interview with Bloomberg on November 14, 2022, Vice Chair Lael Brainard 4
noted that: 5
I think it will probably be appropriate soon to move to a slower pace of 6
increases. But I think what’s really important to emphasize -- we’ve 7
done a lot, but we have additional work to do both on raising rates and 8
sustaining restraint to bring inflation down to 2% over time. 9
We have raised rates very rapidly by nearly four percentage points over 10
about nine months and we’ve been reducing the balance sheet, and you can 11
see that in financial conditions. You can see it in inflation expectations, 12
which are quite well anchored. You can see it in interest-rate-sensitive 13
sectors. 14
But as we said last meeting, there are likely to be lags and it’s going to take 15
some time for that cumulative tightening to flow through. And so it makes 16
sense to move to a more deliberate and a more data-dependent pace as we 17
continue to make sure that there’s restraint that will bring inflation down 18
over time.6 19
Similarly, at the Federal Open Market Committee meeting in November 2022, 20
Chairman Powell indicated that: 21
My colleagues and I are strongly committed to bringing inflation back down 22
to our 2 percent goal. We have both the tools that we need and the resolve 23
it will take to restore price stability on behalf of American families and 24
businesses. Price stability is the responsibility of the Federal Reserve and 25
serves as the bedrock of our economy. Without price stability, the economy 26
does not work for anyone. In particular, without price stability, we will not 27
achieve a sustained period of strong labor market conditions that benefit all. 28

6 “Lael Brainard Talks Fed Interest Rates, Inflation, Crypto in Exclusive Interview.” Bloomberg.com, 14 Nov.
2022, https://www.bloomberg.com/news/articles/2022-11-14/fed-s-brainard-on-rates-inflation-crypto-labor-and-
more-q-a. (emphasis added).
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Today, the FOMC raised our policy interest rate by 75 basis points, and we 1
continue to anticipate that ongoing increases will be appropriate. We are 2
moving our policy stance purposefully to a level that will be sufficiently 3
restrictive to return inflation to 2 percent. In addition, we are continuing the 4
process of significantly reducing the size of our balance sheet. Restoring 5
price stability will likely require maintaining a restrictive stance of policy 6
for some time. 7
… 8
At today’s meeting the Committee raised the target range for the federal 9
funds rate by 75 basis points. And we are continuing the process of 10
significantly reducing the size of our balance sheet, which plays an 11
important role in firming the stance of monetary policy. 12
With today’s action, we have raised interest rates by 3-3/4 percentage points 13
this year. We anticipate that ongoing increases in the target range for the 14
federal funds rate will be appropriate in order to attain a stance of monetary 15
policy that is sufficiently restrictive to return inflation to 2 percent over 16
time.7 17
Finally, Federal Reserve Governor Christopher Waller provided further support 18
that the Federal Reserve believes there is still significant progress that needs to be made to 19
bring inflation down to the Federal Reserve’s long-term target of 2 percent. At the UBS 20
Group AG conference on November 13, 2022, Federal Reserve Governor Waller stated: 21
“These rates are going to stay -- keep going up -- and they’re going to 22
stay high for a while until we see this inflation get down closer to our 23
target,” Waller said Monday at a UBS Group AG conference in Sydney. 24
“We’ve still got a ways to go. This isn’t ending in the next meeting or 25
two.”8 26

7 Transcript, Chair Powell, Press Conference, November 2, 2022.
8 Pandey, Swati. “Fed's Waller Says There's a 'Ways to Go' before Rate Hikes Done.” Bloomberg.com, Bloomberg,
13 Nov. 2022, https://www.bloomberg.com/news/articles/2022-11-13/fed-s-waller-says-there-s-a-ways-to-go-
before-rate-hikes-done. (emphasis added).
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B. The use of Monetary Policy to Address Inflation 1
What policy actions has the Federal Reserve enacted to respond to increased inflation? 2
A. The dramatic increase in inflation has prompted the Federal Reserve to pursue an aggressive 3
normalization of monetary policy, removing the accommodative policy programs used to 4
mitigate the economic effects of COVID-19. As of the November 2, 2022 meeting, the 5
Federal Reserve has taken the following actions: 6
 Completed its taper of Treasury bond and mortgage-backed securities purchases9; 7
 Increased the target federal funds rate beginning in March 2022 through a series of six 8
increases from 0.00 – 0.25 percent to 3.75 percent to 4.00 percent.10 9
 Anticipates the need to bring the Fed Funds rate to a restrictive level and keep it there 10
for some time in order to achieve its goals of maximum employment at the inflation 11
rate of 2 percent over the long-run;11 12
 Began reducing its holdings of Treasury and mortgage-backed securities on June 1, 13
2022.12 The Federal Reserve is reducing the size of its balance sheet by only 14
reinvesting principle payments on owned securities after the total amount of payments 15
received exceeds a defined cap. For Treasury Securities, the cap is set at $60 billion 16
per month. The cap for mortgage-backed securities is set at $35 billion per month.13 17

9 Source: Federal Reserve Bank of New York, https://www.newyorkfed.org/markets/domestic-market-
operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details#monthly-
details.
10 Federal Reserve, Press Releases, March 16, 2022, May 4, 2022, June 15, 2022, September 22, 2022 and November
2, 2022
11 Transcript, Chair Powell, Press Conference, September 21, 2022.
12 Source: Federal Reserve, Press Release, (May 4, 2022).
13 Source: Federal Reserve, Plans for Reducing the Size of the Federal Reserve's Balance Sheet, Press Release, (May
4, 2022).
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C. The Effect of Inflation and Monetary Policy on Interest Rates and the 1
Investor-Required Return 2
What effect will inflation and Federal Reserve’s normalization of monetary policy 3
have on long-term interest rates? 4
A. Inflation and the Federal Reserve’s normalization of monetary policy will likely result in 5
increases in long-term interest rates. Specifically, inflation reduces the purchasing power 6
of the future interest payments an investor expects to receive over the duration of the 7
bond. This risk increases the longer the duration of the bond. As a result, if investors 8
expect increased levels of inflation, they will require higher yields to compensate for the 9
increased risk of inflation, which means interest rates will increase. 10
Have the yields on long-term government bonds increased in response to inflation and 11
the Federal Reserve’s normalization of monetary policy? 12
A. Yes, they have. As shown in Figure 3, since the Federal Reserve’s December 2021 13
meeting, the yield on 10-year Treasury bond has more than doubled, increasing from 1.47 14
percent on December 15, 2021 to 4.10 percent on October 31, 2022. The increase is due 15
to the Federal Reserve’s announcements at each of the meetings since December 2021, 16
and the continued increased levels of inflation that are now expected to persist much 17
longer than the Federal Reserve and investors had originally projected. 18
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Figure 3: 10-Year Treasury Bond Yield—Janaury 2021– October 31, 202214 1
2

Do recent changes in GDP affect the current outlook for inflation and interest rates? 3
A. No. While FOMC participants have reduced their projections for economic activity for 4
real GDP growth of 0.2 percent in 2022 and 1.2 percent in 202315, which is well below 5
the median estimate for the longer-run normal GDP growth rate, the Fed has highlighted 6
that the labor market continues to be extremely tight. Specifically, Chair Powell noted at 7
the November 2022 FOMC meeting that unemployment remained near 50-year lows, job 8
vacancies are still very high and wage growth elevated.16 Therefore, with a tight labor 9

14 S&P Capital IQ Pro.
15 FOMC, Summary of Economic Projections, September 21, 2022.
16 Federal Reserve, Transcript of Chair Powell’s Press Conference, November 2, 2022.
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market and persistently high inflation, the Fed has indicated its need to continue a 1
restrictive monetary policy to moderate demand to better align it with supply.17 2
D. Expected Performance of Utility Stocks and the Investor-Required Return 3
on Utility Investments 4
Are utility share prices correlated to changes in the yields on long-term government 5
bonds? 6
A. Yes. Interest rates and utility share prices are inversely correlated which means, for 7
example, that an increase in interest rates will result in a decline in the share prices of 8
utilities. For example, Goldman Sachs and Deutsche Bank examined the sensitivity of 9
share prices of different industries to changes in interest rates over the past five years. 10
Both Goldman Sachs and Deutsche Bank found that utilities had one of the strongest 11
negative relationships with bond yields (i.e., increases in bond yields resulted in the 12
decline of utility share prices).18 13
How do equity analysts expect the utilities sector to perform in an increasing interest 14
rate environment? 15
A. Equity analysts project that utilities will underperform the broader market as interest rates 16
increase. Fidelity recently classified the utility sector as underweight19 and Morningstar 17
recently noted that a long as inflation persists the utility sector will underperform.20 18
Specifically, Morningstar noted that: 19

17 Ibid.
18 Lee, Justina. “Wall Street Is Rethinking the Treasury Threat to Big Tech Stocks.” Bloomberg.com, 11 Mar. 2021,
www.bloomberg.com/news/articles/2021-03-11/wall-street-is-rethinking-the-treasury-threat-to-big-tech-stocks.
19 Fidelity, “Fourth Quarter 2022, Investment Research Update,” October 26, 2022.
20 Miller, Travis, “As Long as Inflation Worries Persist, We Expect Utilities to Underperform: Renewable energy
continues to be a long-term boon for the sector,” July 6, 2022.
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[a]s long as inflation remains the market’s top concern, we expect utilities 1
to underperform. Utilities are the most sensitive to inflation because of their 2
mostly fixed revenue, large capital investment budgets, and borrowing 3
needs. We think long-term investors who want utilities in their portfolios 4
should focus on those in constructive regulatory environments with the most 5
protection from inflation.21 6
Additionally, the Wall Street Journal (“WSJ”) recently noted in an article published 7
on October 18, 2022 that the S&P Utilities Index was down 14 percent over the past month. 8
The WSJ attributed the decline in the S&P Utilities Index to the recent increase in long-9
term treasury yields: 10
A big draw of utility stocks has become less attractive as interest rates have 11
climbed. Utility stocks are known for their sizable dividends, offering 12
investors a regular stream of income. Companies in the S&P 500 utilities 13
sector offer a dividend yield of 3.3%, among the highest payout percentages 14
in the index, according to FactSet. 15
But the outsize dividends of utility stocks are no match for climbing bond 16
yields. The yield on the benchmark 10-year Treasury note finished above 17
4% on Monday for a second consecutive session. Friday marked the 10-year 18
yield’s first close above the 4% level since 2008 and 11 straight weeks of 19
gains. Treasurys are viewed as essentially risk-free if held to maturity. 20
“The 10-year is repricing everything. I’ve got something that’s even safer 21
and yields even more," said Kevin Barry, chief investment officer at 22
Summit Financial, comparing Treasurys and utility stocks.22 23
Similarly, Barron’s recently noted that the decline in share prices can be attributed 24
to the relatively high valuations and low dividend yields of utilities as compared to other 25
asset classes such as Treasuries.23 According to Barron’s, even after the recent decline in 26

21 Ibid.
22 Miao, Hannah, “Utility Stock stumble as treasury yields climb,” The Wall Street Journal, October 18, 2022.
23 Sonenshine, Jacob, “Utilities Stocks Have Fallen off a Cliff. They Just Got Downgraded, Too.” Barron’s, October
17, 2022.
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share prices, the Utilities Select ETF was yielding 2.85 percent, which is a yield that will 1
not “lure in buyers when the ultrasafe 10-year Treasury note yields close to 4%.”24 2
Therefore, Barron’s currently recommends not buying utility stocks. 3
Have you reviewed any market indicators that may imply that utilities will 4
underperform over the near-term? 5
A. Yes, I have. As discussed above, the utility sector is considered a “bond proxy” or a 6
sector that investors view as a “safe haven” alternative to bonds, and changes in utility 7
stock prices are therefore inversely related to changes in interest rates. For example, the 8
utility sector tends to perform well when interest rates are low since the dividend yields 9
for utilities offer investors the prospect of higher returns when compared to the yields on 10
long-term government bonds. Conversely, the utility sector underperforms as the yields 11
on long-term government bonds increase and the spread between the dividend yields on 12
utility stocks and the yields on long-term government bonds decreases. Therefore, I 13
examined the difference (“yield spread”) between the dividend yields of utility stocks and 14
the yields on long-term government bonds from January 2010 through October 2022. I 15
selected the dividend yield on the S&P Utilities Index as the measure of the dividend 16
yields for the utility sector and the yield on the 10-year Treasury Bond as the estimate of 17
the yield on long-term government bonds. 18
As shown in Figure 4, the yield spread as of October 31, 2022, was -0.99 percent 19
indicating that the yield on the 10-year Treasury Bond has exceeded the dividend yield for 20
the S&P Utilities Index. Furthermore, the current yield spread of -0.99 percent is well 21

24 Ibid.
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below the long-term average since January 2010 of 1.39 percent. Given that the yield 1
spread is currently well below the long-term average as well as the expectation that interest 2
rates will continue to increase, it is reasonable to conclude that utility sector will most likely 3
underperform over the near-term. This is because investors that purchased utility stocks as 4
an alternative to the lower yields on long-term government bonds would otherwise be 5
inclined to rotate back into government bonds, particularly as the yields on long-term 6
government bonds continue to increase, thus resulting in a decrease in the share prices of 7
utilities. 8
Figure 4: Yield Spread between the Dividend Yield on the S&P Utilities Index and the 9
Yield on the 10-year Treasury Bond – January 2012 – October 202225 10
11
What is the significance of the inverse relationship between interest rates and utility 12
share prices in the current market? 13
A. As discussed above, the Federal Reserve is currently normalizing monetary policy in 14
response to inflation which actions are expected to increase long-term government bond 15

25 S&P Capital IQ Pro and Bloomberg Professional.
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yields. If interest rates increase as expected, then the share prices of utilities will decline. 1
If the prices of utility stocks decline, then the DCF model, which relies on historical 2
averages of share prices, is likely to understate the cost of equity. For example, Figure 5, 3
below summarizes the effect of price on the dividend yield in the Constant Growth DCF 4
model. 5
Figure 5: The Effect of a Decline in Stock Prices 6
on the Constant Growth DCF Model 7

A decline in stock prices will increase the dividend yields and thus the estimate of 8
the ROE produced by the Constant Growth DCF model. Therefore, this expected change 9
in market conditions supports consideration of the range of ROE results produced by the 10
mean to mean-high DCF results since the mean DCF results would likely understate the 11
cost of equity during the period that the Company’s rates will be in effect. Moreover, 12
prospective market conditions warrant consideration of other ROE estimation models such 13
as the CAPM and ECAPM, which may better reflect expected market conditions. For 14
example, two out of three inputs to the CAPM (i.e., the market risk premium and risk-free 15
rate) are forward-looking. 16
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Q. Have regulatory commissions acknowledged that the DCF model might understate 1
the COE given the current capital market conditions of high inflation and increasing 2
interest rates? 3
A. Yes. For example, in its May 2022 decision in establishing the cost of equity for Aqua 4
Pennsylvania, Inc., the Pennsylvania Public Utility Commission (“PPUC”) specifically 5
concluded that the current capital market conditions of high inflation and increasing 6
interest rates has resulted in the DCF model understating the utility cost of equity, and 7
that weight should be placed on risk premium models, such as the CAPM, in the 8
determination of the ROE: 9
To help control rising inflation, the Federal Open Market Committee has 10
signaled that it is ending its policies designed to maintain low interest rates. 11
Aqua Exc. at 9. Because the DCF model does not directly account for 12
interest rates, consequently, it is slow to respond to interest rate changes. 13
However, I&E’s CAPM model uses forecasted yields on ten-year Treasury 14
bonds, and accordingly, its methodology captures forward looking changes 15
in interest rates. 16
Therefore, our methodology for determining Aqua’s ROE shall utilize both 17
I&E’s DCF and CAPM methodologies. As noted above, the Commission 18
recognizes the importance of informed judgment and information provided 19
by other ROE models. In the 2012 PPL Order, the Commission considered 20
PPL’s CAPM and RP methods, tempered by informed judgment, instead of 21
DCF-only results. We conclude that methodologies other than the DCF can 22
be used as a check upon the reasonableness of the DCF derived ROE 23
calculation. Historically, we have relied primarily upon the DCF 24
methodology in arriving at ROE determinations and have utilized the results 25
of the CAPM as a check upon the reasonableness of the DCF derived equity 26
return. As such, where evidence based on other methods suggests that the 27
DCF-only results may understate the utility’s ROE, we will consider those 28
other methods, to some degree, in determining the appropriate range of 29
reasonableness for our equity return determination. In light of the above, we 30
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shall determine an appropriate ROE for Aqua using informed judgement 1
based on I&E’s DCF and CAPM methodologies.26 2
….. 3
We have previously determined, above, that we shall utilize I&E’s DCF and 4
CAPM methodologies. I&E’s DCF and CAPM produce a range of 5
reasonableness for the ROE in this proceeding from 8.90% [DCF] to 9.89% 6
[CAPM]. Based upon our informed judgment, which includes consideration 7
of a variety of factors, including increasing inflation leading to increases in 8
interest rates and capital costs since the rate filing, we determine that a base 9
ROE of 9.75% is reasonable and appropriate for Aqua.27 10
E. Conclusion 11
What are your conclusions regarding the effect of current market conditions on the 12
cost of equity for the Company? 13
A. Over the near-term, investors expect long-term interest rates to increase in response to 14
continued elevated levels of inflation and the Federal Reserve’s normalization of 15
monetary policy. Because the share prices of utilities are inversely correlated to interest 16
rates, an increase in long-term government bond yields will likely result in a decline in 17
utility share prices, which is the reason a number of equity analysts expect the utility 18
sector to underperform over the near-term. The expected underperformance of utilities 19
means that DCF models using recent historical data likely underestimate investors’ 20
required return over the period that rates will be in effect. This change in market 21
conditions also supports the use of other ROE estimation models such as the CAPM and 22
the ECAPM, which may more directly reflect expected market conditions. 23

26 Penn. Pub. Util. Comm’n et.al. v, Aqua Penn. Wastewater Inc., Pennsylvania Public Utility Commission, Docket
Nos. R-2021-3027385 and R-2021-3027386, Opinion and Order, May 12, 2022, pp. 154–155.
27 Id., Opinion and Order, May 12, 2022, pp. 177–178.
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PROXY GROUP SELECTION 1
Please provide a brief profile of Intermountain. 2
A. Intermountain Gas Company is a natural gas distribution company that is a wholly owned 3
subsidiary of MDU Resources Group, Inc. As of September 2022, Intermountain served 4
approximately 404,770 retail customers and 109 transportation customers. Intermountain 5
accounted for 27.00 percent of the natural gas distribution operating sales revenues for 6
Intermountain’s parent, MDU Resources, in 2021, while Washington (29.00 percent), 7
North Dakota (15.00 percent), Montana (10.00 percent), Oregon (8.00 percent), South 8
Dakota (6.00 percent), Minnesota (3.00 percent) and Wyoming (2.00 percent) accounted 9
for the other 73.00 percent of retail gas distribution operating sales revenues.28 MDU 10
Resources currently has long-term issuer ratings of BBB+/Stable from Standard & Poor’s 11
and BBB+/Stable from Fitch.29 12
Why have you used a group of proxy companies to estimate the COE for 13
Intermountain? 14
A. In this proceeding, we focus on estimating the COE for a natural gas utility company that 15
is not itself publicly traded. Because the COE is a market-based concept and because 16
Intermountain’s operations do not make up the entirety of a publicly traded entity, it is 17
necessary to establish a group of companies that is both publicly traded and comparable 18
to the Company in certain fundamental business and financial respects to serve as its 19
“proxy” in the COE estimation process. 20

28 MDU Resources, 2021 Form 10-K, at 15.
29 Source: S&P Capital IQ Pro, (September 15, 2022) and FitchRatings.
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Even if Intermountain was a publicly traded entity, it is possible that transitory 1
events could bias its market value over a given period. A significant benefit of using a 2
proxy group is that it moderates the effects of unusual events that may be associated with 3
any one company. The proxy companies used in my analyses all possess a set of operating 4
and risk characteristics that are substantially comparable to the Company, and thus provide 5
a reasonable basis to derive and estimate the appropriate ROE for Intermountain. 6
How did you select the companies included in your proxy group? 7
A. I began with the group of 10 publicly traded companies that Value Line classifies as 8
Natural Gas Distribution Utilities and applied the following screening criteria to select a 9
group of risk-comparable companies that: 10
 pay consistent quarterly cash dividends, because companies that do not 11
cannot be analyzed using the Constant Growth DCF model; 12
 have investment grade long-term issuer ratings from S&P and/or Moody’s; 13
 are covered by at least two utility industry analysts; 14
 have positive long-term earnings growth forecasts from at least two utility 15
industry equity analysts; 16
 derive more than 60.00 percent of their total operating income from 17
regulated operations; 18
 derive more than 60.00 percent of regulated operating income from gas 19
distribution operations; and 20
 were not parties to a merger or transformative transaction during the 21
analytical periods relied on. 22
What is the composition of your proxy group? 23
A. The screening criteria discussed above resulted in a proxy group consisting of the 24
companies shown in Figure 6 below. 25
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Figure 6: Natural Gas Utility Proxy Group 1
Company Ticker
Atmos Energy Corporation ATO
New Jersey Resources NJR
NiSource NI
Northwest Natural Gas Company NWN
ONE Gas, Inc. OGS
Spire, Inc. SR
2
Do your screening criteria result in a proxy group that is risk comparable to 3
Intermountain? 4
A. Yes, they do. The overall purpose of developing a set of screening criteria is to select a 5
proxy group of companies that align with the financial and operational characteristics of 6
Intermountain and that investors would view as comparable to the Company. I developed 7
the screens and thresholds for each screen based on judgment with the intention of 8
balancing the need to maintain a proxy group that is of sufficient size with establishing a 9
proxy group of companies that are comparable in business and financial risk to 10
Intermountain. This resulted in the group of six companies shown in Figure 6, which 11
have business and financial risks that are comparable to Intermountain. 12
COST OF EQUITY ESTIMATION 13
Please briefly discuss the ROE in the context of the regulated rate of return (“ROR”). 14
A. The ROE is the cost rate applied to the equity capital in the ROR. The ROR for a 15
regulated utility is the weighted average cost of capital, in which the costs of the 16
individual sources of capital are weighted by their respective proportion (i.e. book values) 17
in the utility’s capital structure. While the costs of debt and preferred stock can be 18
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directly observed, the COE is market-based and, therefore, must be estimated based on 1
observable market data. 2
How is the required COE determined? 3
A. The required COE is estimated by using analytical techniques that rely on market-based 4
data to quantify investor expectations regarding equity returns, adjusted for certain 5
incremental costs and risks. Informed judgment is then applied to determine where the 6
company’s COE falls within the range of results produced by multiple analytical 7
techniques. The key consideration in determining the COE is to ensure that the 8
methodologies employed reasonably reflect investors’ views of the financial markets in 9
general, as well as the subject company (in the context of the proxy group), in particular. 10
What methods did you use to establish your recommended ROE in this proceeding 11
ROE? 12
A. I considered the results of the Constant Growth DCF model, the CAPM, the ECAPM, 13
and a Bond Yield Plus Risk Premium analysis. As discussed in more detail below, a 14
reasonable ROE estimate appropriately considers alternative methodologies and the 15
reasonableness of their individual and collective results. 16
A. Importance of Multiple Analytical Approaches 17
Why is it important to use more than one analytical approach? 18
A. Because the COE is not directly observable, it must be estimated based on both 19
quantitative and qualitative information. When faced with the task of estimating the COE, 20
analysts and investors are inclined to gather and evaluate as much relevant data as 21
reasonably can be analyzed. Several models have been developed to estimate the COE, 22
and I use multiple approaches to estimate the COE. As a practical matter, however, all the 23
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models available for estimating the COE are subject to limiting assumptions or other 1
methodological constraints. Consequently, many well-regarded finance texts recommend 2
using multiple approaches when estimating the COE. For example, Copeland, Koller, and 3
Murrin30 suggest using the CAPM and Arbitrage Pricing Theory model, while Brigham 4
and Gapenski31 recommend the CAPM, DCF, and Bond Yield Plus Risk Premium 5
approaches. 6
Do current market conditions increase the importance of using more than one 7
analytical approach? 8
A. Yes. As previously discussed, interest rates have increased substantially from the lows 9
during the COVID-19 pandemic, and upward pressure is expected to continue as the 10
Federal Reserve continues to combat persistently high inflation. Given the inverse 11
relationship between interest rates and utility share prices, the dividend yields of utilities 12
are expected to increase over the near-term. Therefore, the current low dividend yields 13
for utilities result in DCF cost of equity estimates that are understating the forward-14
looking cost of equity. The CAPM and Bond Yield Plus Risk Premium method offer 15
some balance through the use of projected interest rates. Therefore, it is important to use 16
multiple analytical approaches to ensure that the COE results reflect the market 17
conditions that are expected during the period that Company's rates will be in effect. 18
Given the expectation that interest rates will increase, it is important to moderate the 19
impact that the current lower interest rates are having on the COE estimates, especially 20

30 Tom Copeland, Tim Koller and Jack Murrin, Valuation: Measuring and Managing the Value of Companies, 3rd
Ed. (New York: McKinsey & Company, Inc., 2000), at 214.
31 Eugene Brigham, Louis Gapenski, Financial Management: Theory and Practice, 7th Ed. (Orlando: Dryden Press,
1994), at 341.
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the DCF analysis, and where possible consider using projected market data in the models 1
to estimate the return for the forward-looking period. 2
Has the Commission made similar findings regarding the reliance on multiple 3
models? 4
A. Yes. It is my understanding that in determining the authorized ROE for a company, the 5
Commission has considered the evidence presented by the parties in the rate case, which 6
has included a range of COE estimation methodologies such as the DCF, CAPM, Risk 7
Premium and Comparable Earnings.32 8
Are you aware of any other regulatory commissions that have recognized the 9
importance of considering the results of multiple models? 10
A. Yes, regulatory commissions routinely consider the results of multiple COE estimation 11
methodologies such as the DCF, CAPM, ECAPM and Risk Premium in determining the 12
authorized ROE for utilities in jurisdictional rate proceedings, including the Iowa Utilities 13
Board (“IUB”),33 the Minnesota Public Utilities Commission (“Minnesota PUC”),34 the 14
Michigan Public Service Commission (“Michigan PSC”),35 the Washington Utilities and 15
Transportation Commission (“Washington UTC”),36 and the New Jersey Board of Public 16

32 In the Matter of the Application of Intermountain Gas Company to Change Its Rates and Charges for Natural
Gas Service in the State of Idaho, Case No. INT-G-16-02, Order No. 33757, at 7-9 (April 28, 2017).
33 Docket RPU-2021-0002, Order Approving Settlement, Approving Compliance Filings, and Granting
Confidential Treatment Requests; at 10; Docket RPU-2019-0002, Order Regarding Settlement and Requiring
Compliance Filings; at 12-13
34 Docket No. G011/GR-17-563, Findings of Fact, Conclusions and Order, at 27; Docket No. E015/GR-16-664,
Findings of Fact, Conclusions and Order, at 60-61
35 Michigan Public Service Commission Order, DTE Gas Company, Case No. U-18999, at 45-47 (Sept. 13, 2018).
36 Wash. Utils. & Transp. Comm’n v. PacifiCorp, Docket UE-130043, Order 05, n. 89 (Dec. 4, 2013); Wash. Utils.
& Transp. Comm’n v. PacifiCorp, Docket UE-100749, Order 06, ¶ 91 (March 25, 2011).
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Utilities (“NJBPU”).37 For example, the Washington UTC has repeatedly emphasized 1
that it “places value on each of the methodologies used to calculate the cost of equity and 2
does not find it appropriate to select a single method as being the most accurate or 3
instructive.”38 The Washington UTC has also explained that “[f]inancial circumstances 4
are constantly shifting and changing, and we welcome a robust and diverse record of 5
evidence based on a variety of analytics and cost of capital methodologies.”39 6
Additionally, in its recent order for DTE Gas Company (“DTE Gas”) in Case No. 7
U-18999, the Michigan PSC considered the results of each of the models presented by the 8
ROE witnesses which included the DCF, CAPM, ECAPM and Risk Premium in the 9
determination of the authorized ROE.40 The Commission also considered authorized ROEs 10
in other states, increased volatility in capital markets and the company-specific business 11
risks of DTE Gas. 12
B. Constant Growth DCF Model 13
Please describe the DCF approach. 14
A. The DCF approach is based on the theory that a stock’s current price represents the 15
present value of all expected future cash flows. In its most general form, the DCF model 16
is expressed as follows: 17
P0 =D1
(1+k)+D2
(1+k)2 +⋯+D∞
(1+k)∞ [1] 18

37 NJBPU Docket No. ER12111052, OAL Docket No. PUC16310-12, Order Adopting Initial Decision with
Modifications and Clarifications, at 71 (March 18, 2015).
38 Wash. Utils. & Transp. Comm’n v. PacifiCorp, Docket UE-130043, Order 05, n. 89 (Dec. 4, 2013).
39 Wash. Utils. & Transp. Comm’n v. PacifiCorp, Docket UE-100749, Order 06, ¶ 91 (March 25, 2011).
40 Michigan Public Service Commission Order, DTE Gas Company, Case No. U-18999, at 45-47 (Sept. 13, 2018).
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Where P0 represents the current stock price, D1…D∞ are all expected future 1
dividends, and k is the discount rate, or required ROE. Equation [1] is a standard present 2
value calculation that can be simplified and rearranged into the following form: 3
k =D0(1+g)
P0
+g [2] 4
Equation [2] is often referred to as the Constant Growth DCF model in which the 5
first term is the expected dividend yield and the second term is the expected long-term 6
growth rate. 7
What assumptions are required for the Constant Growth DCF model? 8
A. The Constant Growth DCF model requires the following four assumptions: (1) a constant 9
growth rate for earnings and dividends; (2) a stable dividend payout ratio; (3) a constant 10
price-to-earnings (“P/E”) ratio; and (4) a discount rate greater than the expected growth 11
rate. To the extent that any of these assumptions are violated, considered judgment and/or 12
specific adjustments should be applied to the results. 13
What market data did you use to calculate the dividend yield in your Constant 14
Growth DCF model? 15
A. The dividend yield in my Constant Growth DCF model is based on the proxy companies’ 16
current annualized dividend and average closing stock prices over the 30-, 90-, and 180-17
trading days ended October 31, 2022. 18
Why did you use 30-, 90-, and 180-day averaging periods? 19
A. In my Constant Growth DCF model, I use an average of recent trading days to calculate 20
the term P0 in the DCF model to reflect current market data while also ensuring that the 21
ROE is not skewed by anomalous events that may affect stock prices on any given 22
trading day. However, as discussed above, recent market data is not representative of 23
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expected market conditions over the long-term. Therefore, the results of my Constant 1
Growth DCF model using historical data may underestimate the forward-looking COE. 2
Did you make any adjustments to the dividend yield to account for periodic growth 3
in dividends? 4
A. Yes, I did. Because utility companies tend to increase their quarterly dividends at 5
different times throughout the year, it is reasonable to assume that dividend increases will 6
be evenly distributed over calendar quarters. Given that assumption, it is reasonable to 7
apply one-half of the expected annual dividend growth rate for purposes of calculating 8
the expected dividend yield component of the DCF model. This adjustment ensures that 9
the expected first-year dividend yield is, on average, representative of the coming twelve-10
month period, and does not overstate the aggregated dividends to be paid during that 11
time. 12
Why is it important to select appropriate measures of long-term growth in applying 13
the DCF model? 14
A. In its Constant Growth form, the DCF model (i.e., Equation [2]) assumes a single growth 15
estimate in perpetuity. To reduce the long-term growth rate to a single measure, one must 16
assume that the payout ratio remains constant and that earnings per share, dividends per 17
share and book value per share all grow at the same constant rate. Over the long run, 18
however, dividend growth can only be sustained by earnings growth. Therefore, it is 19
important to incorporate a variety of sources of long-term earnings growth rates into the 20
Constant Growth DCF model. 21
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Which sources of long-term earnings growth rates did you use? 1
A. My Constant Growth DCF model incorporates three commonly referenced sources of 2
long-term earnings growth rates: (1) Zacks Investment Research; (2) Yahoo! Finance; 3
and (3) Value Line Investment Survey. 4
How did you calculate the range of results for the Constant Growth DCF Models? 5
A. I calculated the low result for my DCF model using the minimum growth rate (i.e., the 6
lowest of the Value Line, Yahoo! Finance, and Zacks earnings growth rates) for each of 7
the proxy group companies. Thus, the low result reflects the minimum DCF result for the 8
proxy group. I used a similar approach to calculate the high results, using the highest 9
growth rate for each proxy group company. 10
What were the results of your Constant Growth DCF analyses? 11
A. Figure 7 (see also Exhibit No. 3) summarizes the results of my DCF analyses. As shown 12
in Figure 7 13
A. Figure 7, the median and mean DCF results range from 9.56 percent to 9.91 percent, and 14
the median high and mean high results are in the range of 10.66 percent to 11.41 percent. 15
While I also summarize the low DCF results, given the expected underperformance of 16
utility stocks and thus the likelihood that the DCF model is understating the COE, I do 17
not believe it is appropriate to consider the low DCF results at this time. 18
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Figure 7: Constant Growth Discounted Cash Flow Results 1
Constant Growth DCF - Mean
Min Growth
Rate
Mean
Growth
Rate
Max Growth
Rate
30-Day Average 8.73% 9.85% 11.41%
90-Day Average 8.48% 9.61% 11.16%
180-Day Average 8.43% 9.56% 11.11%
Constant Growth DCF - Median
Min Growth
Rate
Mean
Growth
Rate
Max Growth
Rate
30-Day Average 8.62% 9.91% 10.95%
90-Day Average 8.33% 9.62% 10.70%
180-Day Average 8.28% 9.57% 10.66%
What are your conclusions about the results of the DCF models? 2
A. As discussed previously, one primary assumption of the Constant Growth DCF model is 3
a constant P/E ratio. That assumption is heavily influenced by the market price of utility 4
stocks. Since utility stocks are expected to underperform in the broader market over the 5
near-term as interest rates increase, it is important to consider the results of the DCF 6
models with caution. This means that the results of the current DCF models are below 7
where they would otherwise be under more normal market conditions. Therefore, while I 8
have given weight to the results of the Constant Growth DCF model, my 9
recommendation also gives weight to the results of other COE estimation models. 10
C. CAPM Analysis 11
Please briefly describe the CAPM. 12
A. The CAPM is a risk premium approach that estimates the COE for a given security as a 13
function of a risk-free return plus a risk premium to compensate investors for the non-14
diversifiable, systematic risk of that security. Systematic risk is the risk inherent in the 15
entire market or market segment—which cannot be diversified away using a portfolio of 16
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assets. Unsystematic risk is the risk of a specific company that can, theoretically, be 1
mitigated through portfolio diversification. 2
The CAPM is defined by four components, each of which must theoretically be a 3
forward-looking estimate: 4
Ke =rf +β(rm-rf) [3] 5
Where: 6
Ke = the required market COE; 7
β = Beta coefficient of an individual security; 8
rf = the risk-free rate of return; and 9
rm = the required return on the market. 10
In this specification, the term (rm – rf) represents the market risk premium. 11
According to the theory underlying the CAPM, because unsystematic risk can be 12
diversified away, investors should only be concerned with systematic or non-diversifiable 13
risk. Systematic risk is measured by Beta. Beta is a measure of the volatility of a security 14
as compared to the market as a whole. Beta is defined a: 15
16
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β = Covariance(re, rm) [4] Variance(rm)

The variance of the market return (i.e., Variance (rm)) is a measure of the 1
uncertainty of the general market, and the covariance between the return on a specific 2
security and the general market (i.e., Covariance (re, rm)) reflects the extent to which the 3
return on that security will respond to a given change in the general market return. Thus, 4
Beta represents the risk of the security relative to the general market. 5
What risk-free rate did you use in your CAPM analysis? 6
A. I relied on three sources for my estimate of the risk-free rate: (1) the current 30-day 7
average yield on 30-year U.S. Treasury bonds, which is 3.92 percent;41 (2) the average 8
projected 30-year U.S. Treasury bond yield for the first quarter of 2023 through the first 9
quarter of 2024, which is 4.00 percent;42 and (3) the average projected 30-year U.S. 10
Treasury bond yield for 2024 through 2028, which is 3.80 percent.43 11
What Beta coefficients did you use in your CAPM analysis? 12
A. As shown Exhibit No. 4, I used the Beta coefficients for the proxy group companies as 13
reported by Bloomberg and Value Line. The Beta coefficients reported by Bloomberg 14
were calculated using ten years of weekly returns relative to the S&P 500 Index. Value 15
Line’s calculation is based on five years of weekly returns relative to the New York 16
Stock Exchange Composite Index. 17
Additionally, as shown in Exhibit No. 5, I also considered an additional CAPM 18
analysis which relies on the long-term average utility Beta coefficient for the companies in 19

41 Bloomberg Professional as of October 31, 2022.
42 Blue Chip Financial Forecasts, Vol. 41, No. 11, at 2 (November 1, 2022).
43 Blue Chip Financial Forecasts, Vol. 41, No. 6, at 14 (June 1, 2022).
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my proxy group. As shown in Exhibit No. 5, the long-term average utility Beta coefficient 1
was calculated as an average of the Value Line Beta coefficients for the companies in my 2
proxy group from 2013 through 2021. 3
How did you estimate the market risk premium in the CAPM? 4
A. I estimated the Market Risk Premium (“MRP”) as the difference between the implied 5
expected equity market return and the risk-free rate. As shown in Exhibit No. 6, the 6
expected return on the S&P 500 Index is calculated using the Constant Growth DCF 7
model discussed earlier in my testimony for the companies in the S&P 500 Index. In my 8
calculation of the market return, I included companies in the S&P 500 that: 1) had either 9
a dividend yield or Value Line long-term earnings projections; and 2) had a Value Line 10
long-term earnings growth rate that was greater than 0 percent and less than or equal to 11
20 percent. Based on an estimated market capitalization-weighted dividend yield of 1.84 12
percent and a weighted long-term growth rate of 10.82 percent, the estimated required 13
market return for the S&P 500 Index is 12.76 percent. 14
How does the current expected market return of 12.76 percent compare to observed 15
historical market returns? 16
A. Given the range of annual equity returns that have been observed over the past century 17
(shown in Figure 8), a current expected return of 12.76 percent is not unreasonable. In 50 18
out of the past 96 years (or roughly 52 percent of observations), the realized equity return 19
was at least 12.76 percent or greater. 20
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Figure 8: Realized U.S. equity market returns (1926-2021) 44 1
2
Did you consider another form of the CAPM in your analysis? 3
A. Yes. I have also considered the results of an ECAPM or alternatively referred to as the 4
Zero-Beta CAPM45 in estimating the COE for Intermountain. The ECAPM calculates the 5
product of the adjusted Beta coefficient and the market risk premium and applies a 6
weight of 75.00 percent to that result. The model then applies a 25.00 percent weight to 7
the market risk premium, without any effect from the Beta coefficient. The results of the 8
two calculations are summed, along with the risk-free rate, to produce the ECAPM result, 9
as noted in Equation [5] below: 10

44 Depicts total annual returns on large company stocks, as reported in the 2022 Kroll SBBI Yearbook.
45 See Roger A. Morin, New Regulatory Finance at 189, Public Utilities Reports, Inc. (2006).
-60%
-40%
-20%
0%
20%
40%
60%
19
2
6
19
2
9
19
3
2
19
3
5
19
3
8
19
4
1
19
4
4
19
4
7
19
5
0
19
5
3
19
5
6
19
5
9
19
6
2
19
6
5
19
6
8
19
7
1
19
7
4
19
7
7
19
8
0
19
8
3
19
8
6
19
8
9
19
9
2
19
9
5
19
9
8
20
0
1
20
0
4
20
0
7
20
1
0
20
1
3
20
1
6
20
1
9
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ke = rf + 0.75β(rm – rf) + 0.25(rm – rf) [5] 1
Where: 2
ke = the required market COE; 3
β = Adjusted Beta coefficient of an individual security; 4
rf = the risk-free rate of return; and 5
rm = the required return on the market as a whole. 6
In essence, the Empirical form of the CAPM addresses the tendency of the 7
“traditional” CAPM to underestimate the cost of equity for companies with low Beta 8
coefficients such as regulated utilities. In that regard, the ECAPM is not redundant to the 9
use of adjusted Betas; rather, it recognizes the results of academic research indicating that 10
the risk-return relationship is different (in essence, flatter) than estimated by the CAPM, 11
and that the CAPM underestimates the “alpha,” or the constant return term.46 12
As with the CAPM, my application of the ECAPM uses the forward-looking market 13
risk premium estimates, the three yields on 30-year Treasury securities noted earlier as the 14
risk-free rate, and the Bloomberg, Value Line, and long-term average Beta coefficients. 15
What are the results of your CAPM analyses? 16
A. As shown in Figure 9 (see also Exhibit No. 4), my traditional CAPM analysis produces a 17
range of returns from 10.34 percent to 11.30 percent. The ECAPM analysis results range 18
from 10.95 percent to 11.66 percent. 19
20

46 Id., at 191.
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Figure 9: CAPM and ECAPM Results 1

Current Risk-
Free Rate
(3.92%)
Q1 2023 – Q1 2024
Projected Risk-Free
Rate (4.00 %)
2024-2028 Projected
Risk-Free Rate
(3.80%)
CAPM
Value Line Beta 11.29% 11.30% 11.27%
Bloomberg Beta 10.81% 10.83% 10.79%
Long-term Avg. Beta 10.38% 10.40% 10.34%
ECAPM
Value Line Beta 11.65% 11.66% 11.64%
Bloomberg Beta 11.30% 11.31% 11.28%
Long-term Avg. Beta 10.97% 10.99% 10.95%
D. Bond Yield Plus Risk Premium Analysis 2
Please describe the Bond Yield Plus Risk Premium approach. 3
A. In general terms, this approach is based on the fundamental principle that equity investors 4
bear the residual risk associated with equity ownership and therefore require a premium 5
over the return they would have earned as a bondholder. That is, because returns to equity 6
holders have greater risk than returns to bondholders, equity investors must be 7
compensated to bear that risk. Risk premium approaches, therefore, estimate the COE as 8
the sum of the equity risk premium and the yield on a particular class of bonds. In my 9
analysis, I used actual authorized returns for natural gas distribution companies as the 10
historical measure of the COE to determine the risk premium. 11
Are there other considerations that should be addressed in conducting this analysis? 12
A. Yes, there are. It is important to recognize both academic literature and market evidence 13
indicating that the equity risk premium (as used in this approach) is inversely related to 14
the level of interest rates. That is, as interest rates increase, the equity risk premium 15
decreases, and vice versa. Consequently, it is important to develop an analysis that: (1) 16
reflects the inverse relationship between interest rates and the equity risk premium; and 17
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(2) relies on recent and expected market conditions. Such an analysis can be developed 1
based on a regression of the risk premium as a function of U.S. Treasury bond yields. If 2
we let authorized ROEs for natural gas utilities serve as the measure of required equity 3
returns and define the yield on the long-term U.S. Treasury bond as the relevant measure 4
of interest rates, the risk premium simply would be the difference between those two 5
points.47 6
Is the Bond Yield Plus Risk Premium analysis relevant to investors? 7
A. Yes, it is. Investors are aware of ROE awards in other jurisdictions, and they consider 8
those awards as a benchmark for a reasonable level of equity returns for utilities of 9
comparable risk operating in other jurisdictions. Because my Bond Yield Plus Risk 10
Premium analysis is based on authorized ROEs for utility companies relative to 11
corresponding Treasury yields, it provides relevant information to assess the return 12
expectations of investors in the current interest rate environment. 13
What did your Bond Yield Plus Risk Premium analysis reveal? 14
A. As shown in Figure 10 below, from 1992 through October 2022, there was a strong 15
negative relationship between risk premia and interest rates. To estimate that relationship, 16
I conducted a regression analysis using the following equation: 17
𝑅𝑃=𝑎+𝑏(𝑇) [6] 18
Where: 19

47 See S. Keith Berry, Interest Rate Risk and Utility Risk Premia during 1982-93, Managerial and Decision
Economics, Vol. 19, No. 2 (March, 1998), in which the author used a methodology similar to the regression
approach described below, including using allowed ROEs as the relevant data source, and came to similar
conclusions regarding the inverse relationship between risk premia and interest rates. See also Robert S. Harris,
Using Analysts’ Growth Forecasts to Estimate Shareholders Required Rates of Return at 66, Financial
Management (Spring 1986).
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RP = Risk Premium (difference between allowed ROEs and the yield on 30-year 1
U.S. Treasury bonds) 2
a = intercept term 3
b = slope term 4
T = 30-year U.S. Treasury bond yield 5
Data regarding allowed ROEs were derived from all of natural gas distribution rate 6
cases from 1992 through October 2022 as reported by Regulatory Research Associates 7
(“RRA”).48 This equation’s coefficients were statistically significant at the 99.00 percent 8
level. 9
Figure 10: Risk Premium Results 10
11
As shown in Exhibit No. 7, based on the current 30-day average of the 30-year U.S. 12
Treasury bond yield (i.e., 3.92 percent), the risk premium would be 6.25 percent, resulting 13

48 This analysis began with a total of 1,192 cases and was screened to eliminate limited issue rider cases,
transmission-only cases, and cases that were silent with respect to the authorized ROE. After applying those
screening criteria, the analysis was based on data for 742 cases.
y = -0.5778x + 0.0851
R² = 0.8565
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
1.00%2.00%3.00%4.00%5.00%6.00%7.00%8.00%
Ri
s
k

P
r
e
m
i
u
m
U.S. Government 30-year Treasury Yield
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in an estimated ROE of 10.16 percent. Based on the near-term (Q1 2023 – Q1 2024) 1
projections of the 30-year U.S. Treasury bond yield (i.e., 4.00 percent), the risk premium 2
would be 6.20 percent, resulting in an estimated ROE of 10.20 percent. Based on longer-3
term (2024 – 2028) projections of the 30-year U.S. Treasury bond yield (i.e., 3.80 percent), 4
the risk premium would be 6.32 percent, resulting in an estimated ROE of 10.12 percent. 5
How did the results of the Bond Yield Risk Premium inform your recommended ROE 6
for Intermountain? 7
A. I have considered the results of the Bond Yield Risk Premium analysis in setting my 8
recommended ROE for Intermountain’s natural gas distribution operations in Idaho. As 9
noted above, investors consider the ROE award of a company when assessing the risk of 10
that company as compared to utilities of comparable risk operating in other jurisdictions. 11
The Risk Premium analysis considers this comparison by estimating the return 12
expectations of investors based on the current and past ROE awards of natural gas 13
distribution companies across the U.S. 14
REGULATORY AND BUSINESS RISKS 15
Q. Do the DCF, CAPM, and ECAPM results for the proxy group, taken alone, provide 16
an appropriate estimate of the COE for the Company? 17
A. No. These results provide only a range of the appropriate estimate of Intermountain’s COE. 18
Several additional factors must also be considered with respect to their overall effect on 19
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the Company’s risk profile relative to the proxy group when determining where the COE 1
falls within the range of results. 2
A. Small Size 3
Please explain the risk associated with small size. 4
A. Both the financial and academic communities have long accepted the proposition that the 5
COE for small firms is subject to a “size effect”. While empirical evidence of the size 6
effect often is based on studies of industries other than regulated utilities, utility analysts 7
also have noted the risk associated with small market capitalizations. Specifically, an 8
analyst for Ibbotson Associates noted: 9
For small utilities, investors face additional obstacles, such as a smaller 10
customer base, limited financial resources, and a lack of diversification 11
across customers, energy sources, and geography. These obstacles imply a 12
higher investor return.49 13
How does the smaller size of a utility affect its business risk? 14
A. In general, smaller companies are less able to withstand adverse events that affect their 15
revenues and expenses. The impact of weather variability, the loss of large customers to 16
bypass opportunities, or the destruction of demand as a result of general macroeconomic 17
conditions or fuel price volatility will have a proportionately greater impact on the 18
earnings and cash flow volatility of smaller utilities. Similarly, capital expenditures for 19
non-revenue producing investments, such as system maintenance and replacements, will 20
put proportionately greater pressure on customer costs, potentially leading to customer 21
attrition or demand reduction. Taken together, these risks affect the return required by 22
investors for smaller companies. 23

49 Michael Annin, Equity and the Small-Stock Effect, Public Utilities Fortnightly, October 15, 1995.
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How do Intermountain’s natural gas operations in Idaho compare in size to the proxy 1
group companies? 2
A. Intermountain’s natural gas operations in Idaho are substantially smaller than the median 3
for the proxy group companies in terms of market capitalization. Exhibit No. 8 provides 4
the actual market capitalization for the proxy group companies and estimates the implied 5
market capitalization for Intermountain’s natural gas operations in Idaho (i.e., the implied 6
market capitalization if Intermountain’s natural gas operations in Idaho were a stand-7
alone publicly traded entity). To estimate the size of the Company’s market capitalization 8
relative to the proxy group, I used the Company’s proposed capital structure equity 9
component of $193.76 million.50 I then applied the median market-to-book ratio for the 10
proxy group of 1.60 to the implied common equity balance of Intermountain’s natural gas 11
operations in Idaho and arrived at an implied market capitalization of approximately 12
$310.86 million, or 7.77 percent of the median market capitalization for the proxy group. 13
How did you estimate the size premium for Intermountain? 14
A. Given this relative size information, it is possible to estimate the impact of size on the 15
COE for Intermountain’s natural gas operations in Idaho using Kroll Cost of Capital 16
Navigator data that estimates the stock risk premia based on the size of a company’s 17
market capitalization.51 As shown in Exhibit No. 8, the median market capitalization of 18
the proxy group of approximately $4.00 billion corresponds to the fifth decile of Kroll’s 19
market capitalization data.52 Based on Kroll’s analysis, that decile corresponds to a size 20
premium of 0.89 percent (i.e., 89 basis points). The implied market capitalization of 21

50 Company provided data.
51 Kroll Cost of Capital Navigator – Size Premium. Annual Data as of December 31, 2021.
52 Ibid.
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Intermountain’s natural gas operations in Idaho of approximately $310.86 million falls 1
within the ninth decile, which comprises market capitalization levels up to $627.80 2
million and corresponds to a size premium of 2.10 percent (i.e., 210 basis points). The 3
difference between those size premia is 121 basis points (i.e., 2.10 percent minus 0.89 4
percent). 5
Were utility companies included in the size premium study conducted by Kroll? 6
A. Yes. In fact, as shown in Exhibit 7.2 of Kroll’s 2019 Valuation Handbook, OGE Energy 7
Corp. had the largest market capitalization of the companies contained in the fourth 8
decile.53 Therefore, Kroll did include utility companies in its size risk premium study. 9
Is the size premium applicable to companies in regulated industries such as natural 10
gas utilities? 11
A. Yes, it is. For example, Thomas Zepp in his article “Utility stocks and the size effect – 12
revisited” provided the results of two studies which showed evidence of the required risk 13
premium for small water utilities. The first study conducted by the California Public 14
Utilities Commission Staff (“CPUC Staff”) computed proxies for Beta risk using 15
accounting data from 1981 through 1991 for 58 water utilities and concluded that smaller 16
water utilities had greater risk and required higher returns on equity than larger water 17
utilities.54 The second study referenced by Zepp examined the differences in required 18
returns over the period of 1987-1997 for two large and two small water utilities in 19
California. As Zepp showed, the required return for the two small water utilities 20

53 Duff &Phelps, Valuation Handbook: Guide to Cost of Capital, 2019, Exhibit 7.2.
54 Zepp, Thomas M. “Utility Stocks and the Size Effect—Revisited.” The Quarterly Review of Economics and
Finance, vol. 43, no. 3, 2003, pp. 578–582., doi:10.1016/s1062-9769(02)00172-2.
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calculated using the DCF model was on average 99 basis points higher than the two 1
larger water utilities.55 2
Additionally, Stéphane Chrétien and Frank Coggins in the article “Cost of Equity 3
for Energy Utilities: Beyond the CAPM”,56 recently studied the CAPM and its ability to 4
estimate the risk premium for the utility industry in particular subgroups of utilities. One 5
of the subgroups was a group of natural gas distribution companies that contained many of 6
the same natural gas distribution companies included in my proxy group.57 The article 7
considered the CAPM, the Fama-French three-factor model and a model similar to the 8
ECAPM that I have also considered above. In the article, the Fama-French three-factor 9
model explicitly included an adjustment to the CAPM for risk associated with size. As 10
Chrétien and Coggins show the Beta coefficient on the size variable for the U.S. natural 11
gas utility group was positive and statistically significant indicating that small size risk was 12
relevant for regulated natural gas utilities.58 These two studies demonstrate that the size 13
premium is evident in market data and is clearly applicable to natural gas and water utilities. 14

55 Ibid.
56 Chrétien, Stéphane, and Frank Coggins. “Cost Of Equity For Energy Utilities: Beyond The CAPM.” Energy
Studies Review, vol. 18, no. 2, 2011, doi:10.15173/esr.v18i2.531.
57 The U.S. natural gas utility group included: AGL Resources Inc., Atmos Energy Corp., Laclede Group, New
Jersey Resources Corp., Northwest Natural Gas Co., Piedmont Natural Gas Co., South Jersey Industries,
Southwest Gas Corp. and WGL Holdings Inc.
58 Chrétien, Stéphane, and Frank Coggins. “Cost of Equity For Energy Utilities: Beyond The CAPM.” Energy
Studies Review, vol. 18, no. 2, 2011, doi:10.15173/esr.v18i2.531.
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Have regulators in other jurisdictions made a specific risk adjustment to the COE 1
results based on a company’s small size? 2
A. Yes. In Order No. 15, the Regulatory Commission of Alaska (“RCA”) concluded that 3
Alaska Electric Light and Power Company (“AEL&P”) was riskier than the proxy group 4
companies due to small size as well as other business risks. The RCA did “not believe 5
that adopting the upper end of the range of ROE analyses in this case, without an explicit 6
adjustment, would adequately compensate AEL&P for its greater risk.”59 Thus, the RCA 7
awarded AEL&P an ROE of 12.875 percent which was 108 basis points above the 8
highest COE estimate from any model presented in the case.60 Similarly, in Order No. 19, 9
the RCA noted that small size as well as other business risks such as structural regulatory 10
lag, weather risk, alternative rate mechanisms, gas supply risk, geographic isolation and 11
economic conditions increased the risk of ENSTAR Natural Gas Company.61 Ultimately, 12
the RCA concluded that: 13
Although we agree that the risk factors identified by ENSTAR increase its 14
risk, we do not attempt to quantify the amount of that increase. Rather, we 15
take the factors into consideration when evaluating the remainder of the 16
record and the recommendations presented by the parties. After applying 17
our reasoned judgment to the record, we find that 11.875% represents a fair 18
ROE for ENSTAR.62 19
Additionally, in Docket No. E017/GR-15-1033 for Otter Tail Power Company 20
(“Otter Tail”), the Minnesota Public Utilities Commission (“Minnesota PUC”) selected an 21

59 Docket No. U-10-29, In the Matter of the Revenue Requirement and Cost of Service Study Designated as TA381-
1 Filed by Alaska Electric Light and Power Company, Order entered September 2, 2011 (Order No. 15) at 37.
60 Id., at 32 and 37.
61 Docket No. U-16-066, In the Matter of the Tariff Revision Designated as TA285-4 Filed by ENSTAR Natural
Gas Company, A Division of Semco Energy, Inc., Order entered September 22, 2017 (Order No. 19) at 50-52.
62 Ibid.
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ROE above the mean DCF results, as a result of multiple factors including Otter Tail’s 1
small size. The Minnesota PUC stated: 2
The record in this case establishes a compelling basis for selecting an ROE 3
above the mean average within the DCF range, given Otter Tail’s unique 4
characteristics and circumstances relative to other utilities in the proxy 5
group. These factors include the company’s relatively smaller size, 6
geographically diffuse customer base, and the scope of the Company’s 7
planned infrastructure investments.63 8
Finally, in Opinion No. 569 and 569-A, the FERC has relied on a size premium 9
adjustment in its CAPM estimates for electric utilities. In those decisions, the FERC noted 10
that “the size adjustment was necessary to correct for the CAPM’s inability to fully account 11
for the impact of firm size when determining the cost of equity.”64,65 12
How have you considered the smaller size of Intermountain’s natural gas distribution 13
operations in Idaho in your recommended ROE? 14
A. While I have estimated the effect of the size of Intermountain’s natural gas distribution 15
operations on the COE, I am not proposing a specific adjustment for this risk factor. 16
Rather, I believe it is important to consider the small size of Intermountain’s natural gas 17
distribution operations in the determination of where, within the range of analytical 18
results, the Company’s required COE falls. Therefore, the additional risk associated with 19
small size indicates that the Company’s ROE should be established above the mean and 20
median results for the proxy group companies. 21

63 Order in Docket No. E017/GR-15-1033, In the Matter of the Application of Otter Tail Power Company for
Authority to Increase Rates for Electric Service in the State of Minnesota (August 16, 2016) at 55.
64 Federal Energy Regulatory Commission, Opinion No. 569-A, May 21, 2020, at para 75.
65 The U.S. Court of Appeals recently vacated the FERC Order 569 decisions that related to its risk premium model
and remanded the case to FERC to reopen proceedings. However, in that decision, the Court did not reject FERC’s
inclusion of the size premium to estimate the CAPM. United States Court of Appeals Case No. 16-1325, Decision
No. 16-1325, August 9, 2022 at 20.
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B. Capital Expenditures 1
Please summarize the capital expenditure requirements for Intermountain’s Idaho 2
natural gas distribution operations. 3
A. The Company’s current projections for 2023 through 2027 include at least $322.64 4
million in capital investments for the period.66 Based on the Company’s net utility plant 5
of approximately $458.07 million as of December 31, 2021,67 the projected capital 6
expenditures are approximately 70.43 percent of Intermountain’s net utility plant as of 7
December 31, 2021. 8
How is the Company’s risk profile affected by their substantial capital expenditure 9
requirements? 10
A. As with any utility faced with substantial capital expenditure requirements, the 11
Company’s risk profile may be adversely affected in two significant and related ways: (1) 12
the heightened level of investment increases the risk of under-recovery or delayed 13
recovery of the invested capital, particularly since the Company does not have any 14
mechanism to provide for recovery between rate cases; and (2) an inadequate return 15
would put downward pressure on key credit metrics. 16
Do credit rating agencies recognize the risks associated with elevated levels of capital 17
expenditures? 18
A. Yes, they do. From a credit perspective, the additional pressure on cash flows associated 19
with high levels of capital expenditures exerts corresponding pressure on credit metrics 20

66 Company provided data.
67 Company provided data.
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and, therefore, credit ratings. To that point, S&P explains the importance of regulatory 1
support for large capital projects: 2
When applicable, a jurisdiction’s willingness to support large capital 3
projects with cash during construction is an important aspect of our analysis. 4
This is especially true when the project represents a major addition to rate 5
base and entails long lead times and technological risks that make it 6
susceptible to construction delays. Broad support for all capital spending is 7
the most credit-sustaining. Support for only specific types of capital 8
spending, such as specific environmental projects or system integrity plans, 9
is less so, but still favorable for creditors. Allowance of a cash return on 10
construction work-in-progress or similar ratemaking methods historically 11
were extraordinary measures for use in unusual circumstances, but when 12
construction costs are rising, cash flow support could be crucial to maintain 13
credit quality through the spending program. Even more favorable are those 14
jurisdictions that present an opportunity for a higher return on capital 15
projects as an incentive to investors.68 16
Therefore, to the extent that Intermountain’s rates do not permit the opportunity to 17
earn an appropriate return and recover its capital investments on a regular and timely basis, 18
the Company will face increased recovery risk and thus increased pressure on its credit 19
metrics. 20
How do Intermountain’s capital expenditure requirements for the Idaho natural gas 21
operations compare to those of the proxy group companies? 22
A. As shown in Exhibit No. 9, I calculated the ratio of expected capital expenditures to net 23
utility plant for Intermountain’s natural gas distribution operations in Idaho and each of 24
the companies in the proxy group by dividing each company’s projected capital 25
expenditures for the period from 2023-2027 by its total net utility plant as of December 26
31, 2021. As shown in Exhibit No. 9 (see also Figure 11 below), the Company’s ratio of 27
capital expenditures as a percentage of net utility plant is 70.43 percent, which is above 28

68 S&P Global Ratings, “Assessing U.S. Investor-Owned Utility Regulatory Environments,” August 10, 2016, at 7.
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the median for the proxy group companies of 68.83 percent. This result indicates a risk 1
level for Intermountain’s natural gas distribution operations in Idaho that is higher than 2
the proxy group companies. 3
4
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Figure 11: Comparison of Capital Expenditures 1
2
Does the Company have a capital tracking mechanism to recover the costs associated 3
with its capital expenditures plan between rate cases? 4
A. No. Intermountain does not have a mechanism to recover capital investment costs 5
between rate cases . Therefore, Intermountain depends entirely on rate case filings for 6
capital cost recovery. 7
Are capital investment recovery mechanisms common amongst natural gas 8
distribution utilities? 9
A. Yes. As shown in Exhibit No. 10, 18 out of 25 (or approximately 72 percent) of the 10
operating companies of the proxy group recover costs through capital investment 11
reconciling mechanisms. Therefore, the Company has significantly greater risk relative to 12
the proxy group from the regulatory lag associated with the recovery of its capital 13
expenditures plan. 14
51.09%52.89%
63.21%70.43%74.45%
88.74%89.67%
1 2 3 4 5 6 7 8 9 10
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
NWN OGS SR IMG NI NJR ATO
Median= 68.83%
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What are your conclusions regarding the effect of the Company’s capital spending 1
requirements on its risk profile and COE? 2
A. The Company’s capital expenditure requirements as a percentage of net utility plant are 3
significant and will continue over the next few years. Additionally, unlike a number of 4
the operating subsidiaries of the proxy group, Intermountain does not have a 5
comprehensive capital tracking mechanism to recover the Company’s projected capital 6
expenditures. Therefore, Intermountain’s significant capital expenditures plan and limited 7
ability to recover the capital investment on an as incurred basis results in a risk profile 8
that is greater than that of the proxy group and supports an ROE toward the higher end of 9
the reasonable range of ROEs. 10
C. Regulatory Risk 11
How does the regulatory environment affect investors’ risk assessments? 12
A. The ratemaking process is premised on the principle that, for investors and companies to 13
commit the capital needed to provide safe and reliable utility service, the subject utility 14
must have the opportunity to recover the return of, and the market-required return on, 15
invested capital. Regulatory authorities recognize that because utility operations are 16
capital intensive, regulatory decisions should enable the utility to attract capital at 17
reasonable terms; doing so balances the long-term interests of investors and customers. 18
To achieve this balance, the Company must be able to finance its operations assuming a 19
reasonable opportunity to earn an appropriate return on invested capital to maintain an 20
acceptable financial profile. In that respect, the regulatory environment is one of the most 21
important factors considered in both debt and equity investors’ risk assessments. 22
From the perspective of debt investors, the authorized return should enable the 23
Company to generate the cash flow needed to meet its near-term financial obligations, 24
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make the capital investments needed to maintain and expand its systems, and maintain the 1
necessary levels of liquidity to fund unexpected events. This financial liquidity must be 2
derived not only from internally generated funds, but also by efficient access to capital 3
markets. Moreover, because fixed income investors have many investment alternatives, 4
even within a given market sector, the Company’s financial profile must be adequate on a 5
relative basis to ensure its ability to attract capital under a variety of economic and financial 6
market conditions. 7
Equity investors, on the other hand, require that the authorized return be adequate 8
to provide a risk-comparable return on the equity portion of the Company’s capital 9
investments. Because equity investors are the residual claimants on the Company’s cash 10
flows (which is to say that the equity return is subordinate to interest payments), they are 11
particularly concerned with the strength of regulatory support and its effect on future cash 12
flows. 13
How do credit rating agencies consider regulatory risk in establishing a company’s 14
credit rating? 15
A. Both S&P and Moody’s consider the overall regulatory framework in establishing credit 16
ratings. Moody’s establishes credit ratings based on four key factors: (1) regulatory 17
framework; (2) the ability to recover costs and earn returns; (3) diversification; and (4) 18
financial strength, liquidity, and key financial metrics. Of these criteria, regulatory 19
framework, and the ability to recover costs and earn returns are each given a broad rating 20
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factor of 25.00 percent. Therefore, Moody’s assigns regulatory risk a 50.00 percent 1
weighting in the overall assessment of business and financial risk for regulated utilities.69 2
S&P also identifies the regulatory framework as an important factor in credit ratings 3
for regulated utilities, stating: “One significant aspect of regulatory risk that influences 4
credit quality is the regulatory environment in the jurisdictions in which a utility 5
operates.”70 S&P identifies four specific factors that it uses to assess the credit implications 6
of the regulatory jurisdictions of investor-owned regulated utilities: (1) regulatory stability; 7
(2) tariff-setting procedures and design; (3) financial stability; and (4) regulatory 8
independence and insulation.71 9
How does the regulatory environment in which a utility operates affect its access to 10
and cost of capital? 11
A. The regulatory environment can significantly affect both the access to, and cost of capital 12
in several ways. First, the proportion and cost of debt capital available to utility 13
companies are influenced by the rating agencies’ assessment of the regulatory 14
environment. As noted by Moody’s, “[f]or rate regulated utilities, which typically operate 15
as a monopoly, the regulatory environment and how the utility adapts to that environment 16
are the most important credit considerations.”72 Moody’s further highlighted the 17
relevance of a stable and predictable regulatory environment to a utility’s credit quality, 18

69 Moody’s Investors Service, Rating Methodology: Regulated Electric and Gas Utilities, June 23, 2017, at 4.
70 Standard & Poor’s Global Ratings, Ratings Direct, U.S. and Canadian Regulatory Jurisdictions Support Utilities’
Credit Quality—But Some More So Than Others, June 25, 2018, at 2.
71 Id., at 1.
72 Moody’s Investors Service, Rating Methodology: Regulated Electric and Gas Utilities, June 23, 2017, at 6.
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noting: “[b]roadly speaking, the Regulatory Framework is the foundation for how all the 1
decisions that affect utilities are made (including the setting of rates), as well as the 2
predictability and consistency of decision-making provided by that foundation.”73 3
Have you conducted any analysis of the regulatory framework in Idaho relative to the 4
jurisdictions in which the companies in your proxy group operate? 5
A. Yes. I have evaluated the regulatory framework in Idaho considering two factors which 6
are important to ensuring Intermountain maintains access to capital at reasonable terms. 7
As I will discuss in more detail below, the two factors are: (1) cost recovery mechanisms 8
which allow a utility to recover costs in a timely manner between rate cases and provide 9
the utility the opportunity to earn its authorized return; and (2) comparable return 10
standard74 because an awarded ROE that is significantly below the ROEs awarded to 11
other utilities with comparable risks can affect the ability of a utility to attract capital at 12
reasonable terms. 13
1. Cost Recovery Mechanisms 14
Have you conducted any analysis to compare the cost recovery mechanisms of 15
Intermountain to the cost recovery mechanisms approved in the jurisdictions in 16
which the companies in your proxy group operate? 17
A. Yes. I selected three mechanisms that are important to provide a regulated utility an 18
opportunity to earn its authorized ROE. These are: (1) test year convention (i.e., forecast 19
vs. historical test year); (2) use of revenue decoupling mechanisms or other clauses that 20
mitigate volumetric risk; and (3) prevalence of capital cost recovery between rate cases. 21

73 Id.
74 Hope and Bluefield require the return be commensurate with returns on investments in enterprises with similar
risk.
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The results of my regulatory risk assessment are summarized as follows, and the details 1
are shown in Exhibit No. 10: 2
Test Year Convention: Intermountain is relying on a partially forecast test year for 3
the period ending December 31, 2022. Similarly, 48 percent of the operating 4
companies held by the proxy group provide service in jurisdictions that use a fully 5
or partially forecast test year. Forecast test years have been relied on for several 6
years and produce cost estimates that are more reflective of future costs which 7
results in more accurate recovery of incurred costs and mitigates the regulatory lag 8
associated with historical test years. As Lowry, Hovde, Getachew, and Makos 9
explain in their 2010 report, Forward Test Years for US Electric Utilities: 10
This report provides an in depth discussion of the test year issue. It includes 11
the results of empirical research which explores why the unit costs of 12
electric IOUs are rising and shows that utilities operating under forward test 13
years realize higher returns on capital and have credit ratings that are 14
materially better than those of utilities operating under historical test 1 15
years. The research suggests that shifting to a future test year is a prime 16
strategy for rebuilding utility credit ratings as insurance against an uncertain 17
future.75 18
Volumetric Risk: Intermountain does not have protection against volumetric risk in 19
Idaho, either through a revenue decoupling mechanism or a weather normalization 20
adjustment clause. By comparison, 88 percent of the operating companies in the 21
proxy group have some form of protection against volumetric risk. 22
Capital Cost Recovery: Intermountain does not have a capital tracking mechanism 23
to recover capital investment costs between rate cases. However, as discussed 24

75 M.N. Lowry, D. Hovde, L. Getachew, and M. Makos, Forward Test Years for US Electric Utilities prepared for
Edison Electric Institute, August 2010, at 1.
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above, approximately 72 percent of the operating companies in the proxy group 1
have some form of capital cost recovery mechanism in place. 2
2. Authorized ROEs 3
How do recent returns in Idaho compare to the authorized returns in other 4
jurisdictions? 5
A. Figure 12 below shows the authorized returns for natural gas distribution companies in 6
other jurisdictions since January 2009, and the returns authorized in Idaho for natural gas 7
companies. While partially the result of settlement agreements approved by the 8
Commission, as shown in Figure 12, the authorized returns for natural gas distribution 9
companies in Idaho have been below the average authorized ROE for natural gas 10
distribution companies in other jurisdictions over the past five years. 11
Figure 12: Comparison of Idaho and U.S. Authorized Electric Returns76 12
13

76 S&P Capital IQ Pro. Authorized ROEs in Arizona and New York are excluded because they are not considered
comparable to the manner in which ROE is established in Idaho by the Commission. Specifically, authorizations
in Arizona were excluded because their return is subject to a fair value rate base calculation, which is not the case
in Idaho. Authorized ROEs in New York have been excluded since the results are relatively formulaic with each
utility generally receiving the same ROE without differentiation of risk.
8.50%
9.00%
9.50%
10.00%
10.50%
11.00%
11.50%
1/1/2009 9/28/2011 6/24/2014 3/20/2017 12/15/2019 9/10/2022
Au
t
h
o
r
i
z
e
d

R
O
E

U.S. Average Excl. ID
U.S. Auhorized ROEs
Idaho Authorized ROEs
Rate CaseData through October 31, 2022
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Should the Commission be concerned about authorizing equity returns that are at the 1
low end of the range established by other state regulatory jurisdictions? 2
A. Yes. Placing Intermountain at the low end of authorized ROEs across the country can 3
negatively affect the Company’s access to capital and the overall cost of capital over the 4
longer term. As I discuss below, the recent negative rate case determination, including a 5
below average authorized ROE, for Arizona Public Service Company (“APS”) resulted in 6
a 24 percent decline in the share price for Pinnacle West Capital Corporation (“PNW”), 7
increasing the overall COE for that company. 8
Second, as noted in Sections IV and VI, interest rates have been increasing in 2022 9
and are expected to continue to increase as the Federal Reserve continues to normalize 10
monetary policy. Therefore, historical authorized ROEs provide investors with a range of 11
recent returns, these decisions do not take into consideration the effect of current market 12
conditions on the investor, required return. Therefore, it is important that the Commission 13
consider the results of forward looking methodologies such as the CAPM, ECAPM, and 14
Bond Yield Plus Risk Premium which rely directly on current and projected interest rates 15
in the estimation of the COE. 16
Do credit rating agencies consider the authorized ROE in the overall risk assessment 17
of a utility? 18
A. Yes, they do. To the extent that the returns in a jurisdiction are lower than the returns 19
that have been authorized more broadly, credit rating agencies will consider this in the 20
overall risk assessment of the regulatory jurisdiction in which the company operates. It is 21
important to consider credit ratings because they affect the overall cost of borrowing, and 22
they act as a signal to equity investors about the risk of investing in the equity of a 23
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company. Therefore, lower credit ratings can affect both the cost of debt and equity. 1
Examples of recent credit rating agency responses include ALLETE, Inc., and PNW. 2
Moody’s downgraded ALLETE, Inc. from A3 to Baa1 primarily based on the less than 3
favorable outcome in Minnesota Power’s last fully litigated rate case in Minnesota which 4
included what Moody’s noted was a below average authorized ROE of 9.25 percent.77 In 5
addition, FitchRatings recently downgraded and maintained a negative outlook for APS 6
and its parent, PNW, following the hearings conducted by the Arizona Corporation 7
Commission (“ACC”) in October 2021 regarding APS’ current rate case proceeding.78 8
While the ACC had not issued a final order in APS’ rate case at the time, FitchRatings 9
noted that the developments at the hearing in October indicate a likely credit negative 10
outcome that will negatively affect the financial metrics of both APS and PNW. It is also 11
important to note that both Standard & Poor’s and Moody’s downgraded PNW’s and 12
APS’ credit rating and put the companies on credit watch negative following the 13
Commission’s November vote that officially authorized the 8.70 percent ROE.79 14
Are you aware of any utilities whose market data has been affected by adverse rate 15
case developments? 16
A. Yes, I am. The market has responded negatively to recent returns authorized by the 17
ACC. As noted above, the most recent ROE determination in Arizona was for APS. The 18

77 Moody’s Investors Service, “Credit Opinion: ALLETE, Inc. Update following downgrade,” at 3 (April 3, 2019).
78 FitchRatings, “Fitch Downgrades Pinnacle West Capital & Arizona Public Service to 'BBB+'; Outlooks Remain
Negative,” October 12, 2021.
79 See S&P Capital IQ and Moody’s Investors Service, “Rating Actions: Moody's downgrades Pinnacle West to
Baa1 and Arizona Public Service to A3; outlook negative,” (Nov. 17, 2021).
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Recommended Opinion and Order (“ROO”) issued in the APS rate proceeding on August 1
2, 2021, recommended an ROE of 9.16 percent. In October 2021, that recommendation 2
was amended to reduce the company’s ROE to 8.70 percent. The final ROE that was 3
established for APS was 8.70 percent.80 The market reacted strongly to the proposed 4
order and subsequent amendment and final decision. Guggenheim Securities LLC, an 5
equity analyst that follows PNW, the parent company of APS, informed its clients that: 6
[T]he “Arizona Corporation Commission is now confirmed to be the single 7
most value destructive regulatory environment in the country as far as 8
investor-owned utilities are concerned”.81 9
S&P Global Market Intelligence (“Regulatory Research Associates”) noted that 10
this decision was “among the lowest ROEs RRA had encountered in its coverage of 11
vertically integrated electric utilities in the past 30 years.”82 12
As shown in Figure 13 below, PNW’s stock price declined approximately 24 13
percent from August 2, 2021 to November 4, 2021 following the issuance of the ROO, 14
which recommended an ROE of 9.16 percent, and then the subsequent amendment to that 15
opinion recommending the 8.70 percent ROE ultimately adopted by the ACC. Moreover, 16
the Value Line five-year projected EPS growth rates for this company have fallen from 5.0 17
percent in July 2021, prior to the deliberations in the rate proceeding to “Nil” in October 18
2021 and most recently 0.5 percent in October 2022. For PNW, the APS decision has had 19
a significant effect on the share price and growth rate assumptions used in the DCF model. 20

80 Arizona Corporation Commission Docket No. E-01345A-19-0236, Commissioner Olson Proposed Amendment
No. 1 to the Recommended Opinion and Order. October 4, 2021.
81 S&P Global Market Intelligence, “Pinnacle West shares tumble after regulators slash returns in rate case,”
October 7, 2021.
82 S&P Global Market Intelligence, RRA Regulatory Focus, “Commission accords Arizona Public Service Company
a well below average ROE,” October 8, 2021.
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Figure 13: Pinnacle West Capital Stock Price VS. S&P 500 1
2
How should the Commission use the information regarding authorized ROEs in other 3
jurisdictions in determining the ROE for Intermountain? 4
A. As discussed above, the companies in the proxy group operate in multiple jurisdictions 5
across the U.S. Since Intermountain must compete directly for capital with investments 6
of similar risk, it is appropriate to review the authorized ROEs in other jurisdictions. The 7
comparison is important because investors are considering the authorized returns across 8
the U.S. and are likely to invest equity in those utilities with the highest returns. 9
What is your conclusion regarding the regulatory framework in Idaho as compared 10
with the jurisdictions in which the proxy group companies operate? 11
A. As discussed throughout this section of my testimony, both Moody’s and S&P have 12
identified the supportiveness of the regulatory environment as an important consideration 13
in developing their overall credit ratings for regulated utilities. Considering the 14
regulatory adjustment mechanisms, many of the companies in the proxy group have 15
3,000.00
3,200.00
3,400.00
3,600.00
3,800.00
4,000.00
4,200.00
4,400.00
4,600.00
4,800.00
50.00
55.00
60.00
65.00
70.00
75.00
80.00
85.00
90.00
1/4/2021 2/4/2021 3/4/2021 4/4/2021 5/4/2021 6/4/2021 7/4/2021 8/4/2021 9/4/2021 10/4/2021 11/4/2021
S&
P

5
0
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W

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PNW S&P 500 ROO Amendment ROO issued
ROO Issued
(ROE -9.16%)ROO
Ammendment
(ROE -8.70%)
PAGE 66 OF 79
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timely cost recovery through forecasted test years, cost recovery trackers and revenue 1
stabilization mechanisms than Intermountain has in Idaho. Additionally, authorized 2
ROEs in Idaho have been below the average authorized ROEs for natural gas distribution 3
utilities across the U.S. For these reasons, I conclude that Intermountain has greater than 4
average regulatory risk when compared to the proxy group, indicating that the authorized 5
ROE for Intermountain should be higher than the proxy group mean/median. 6
D. Service Territory Risk 7
Please summarize Intermountain’s service territory risk. 8
A. As noted above, Intermountain serves approximately 404,770 retail and 109 9
transportation customers in Idaho. The Company’s service area is in Southern Idaho, 10
where most of Intermountain’s industrial customers are in the agricultural and food 11
processing industry which represents a large portion of the economy and supports the 12
Company’s commercial and residential customers. Approximately 43.22 percent of 13
Intermountain’s total company utility gas sales in 2021 were derived from industrial 14
customers. As shown in Figure 14, Intermountain’s commercial and industrial sales 15
volume as a percentage of total utility gas sales was 66.16 percent, which was higher than 16
all but two of the proxy group companies. However, the two proxy group companies (i.e., 17
One Gas and NiSource) with a higher percentage of commercial and industrial sales 18
volume were only slightly higher with One Gas and NiSource deriving 66.27 percent and 19
66.63 percent, respectively, of their natural gas volumes from commercial and industrial 20
customers. 21
22
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Figure 14: Customer Concentration83 1
2
How does customer concentration and the Company’s service territory risk affect 3
business risk? 4
A. A relatively high concentration of commercial and industrial customers results in higher 5
business risk. Commercial and industrial customers are large, and can represent a 6
significant portion of a company’s sales which could be lost if a customer goes out of 7
business or switches suppliers. As noted by Dhaliwal, Judd, Serfling and Shaikh in their 8
article, Customer Concentration Risk and the Cost of Equity Capital: 9

83 EIA FORM 176 - Other sales includes Electric Power and Vehicle Fuel Volume.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
NJR SR NWN ATO IMG OGS NI
Industrial %Commercial %Other %Residential %
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Depending on a major customer for a large portion of sales can be risky for 1
a supplier for two primary reasons. First, a supplier faces the risk of losing 2
substantial future sales if a major customer becomes financially distressed 3
or declares bankruptcy, switches to a different supplier, or decides to 4
develop products internally. Consistent with this notion, Hertzel et al. 5
(2008) and Kolay et al. (2015) document negative supplier abnormal stock 6
returns to the announcement that a major customer declares bankruptcy. 7
Further, a customer’s weak financial condition or actions could signal 8
inherent problems about the supplier’s viability to its remaining customers 9
and lead to compounding losses in sales. Second, a supplier faces the risk 10
of losing anticipated cash flows from being unable to collect outstanding 11
receivables if the customer goes bankrupt. This assertion is consistent with 12
the finding that suppliers offering customers more trade credit experience 13
larger negative abnormal stock returns around the announcement of a 14
customer filing for Chapter 11 bankruptcy (Jorion and Zhang, 2009; Kolay 15
et al., 2015).84 16
17
Therefore, a company that has a high degree of customer concentration will be 18
inherently riskier than a company that derived income from a larger customer base. 19
Furthermore, as Dhaliwal, Judd, Serfling and Shaik detail in the article, the increased risk 20
associated with a more concentrated customer base will have the effect of increasing a 21
company’s COE.85 22
Please describe how changes in economic conditions and the interdependent nature 23
of Intermountain’s service territory can affect its business risk? 24
A. While Intermountain doesn’t depend on any one major customer, Intermountain has a 25
high concentration of industrial customers. Intermountain’s major industrial customers 26
are engaged in the agricultural industry primarily in food processing including but not 27
limited to potato, dairy and meat processing. Commodity and energy price volatility, 28
changes in consumer preferences, increased domestic and international competition as 29

84 Dhaliwal, Dan S., J. Scott Judd, Matthew A. Serfling, and Sarah Shaikh. “Customer Concentration Risk and the Cost
of Equity Capital.” SSRN Electronic Journal (2016): 1-2. Web.
85 Id, at 4.
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well as the current labor shortages and the economic effect of the COVID-19 pandemic 1
are some of the risk factors currently faced by the food processing industry. Depending 2
on how significant the financial effect of the referenced events, companies could respond 3
to such events by decreasing production which will result in volatility in natural gas sales 4
for Intermountain since the Company’s load is heavily based on the food processing 5
industry. 6
What portion of Intermountain’s natural gas deliveries concentrated in one industry? 7
A. In 2021, 37.02 percent of Intermountain’s total natural gas sales were derived from 8
industrial customers in the food processing industry.86 Moreover, since the economy in 9
Southern Idaho is reliant on the food processing industry, Intermountain’s commercial 10
and residential customers also rely on the industry for sales and employment. For 11
example, the agricultural and food processing industry employs nearly 5.4 percent of 12
Idaho’s workforce and contributed $3.9 billion to Idaho’s GDP which represents over 9 13
percent of Idaho’s total GDP.87 Furthermore, Southern Idaho is ranked number 3 in the 14
U.S. for food processing and is one of four regions in the U.S. to receive the U.S. 15
Department of Commerce’s Federal Manufacturing Community Designation in the 16
category of “All Things Food”. 88 Therefore, downside risks to the food processing such 17
as increases in commodity prices, labor shortages, changing consumer preferences and 18
increase domestic and international competition could have an effect on the economic 19
conditions in Intermountain’s service territory. This could result in a reduction in sales to 20

86 Company provided data.
87 Idaho Department of Commerce. “Food Production Industry Fact Sheet”.
https://commerce.idaho.gov/content/uploads/2021/05/Industry-One-Sheet-Food-Production-1.pdf
88 Southern Idaho Economic Development, “Key Industries”. https://www.southernidaho.org/key-industries.html
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industrial customers. If food processors reduce output, the effect would be compounded 1
by a decline in local employment which would also reduce natural gas deliveries for 2
Intermountain’s residential and commercial customers. 3
Are you aware of other risk factors that could affect Intermountain’s business 4
operations? 5
A. Yes. Intermountain is also in direct competition with other sources of energy such as 6
electricity, diesel, solar, and wind among others. This creates an additional risk that 7
customers in the commercial and industrial classes could convert to a different source of 8
energy. Thus, Intermountain’s reliance on a large percentage of commercial and 9
industrial load results in an increased risk of volatility with respect to sales, earnings, and 10
cash flow. 11
What is your conclusion regarding the Company’s customer concentration and its 12
effect on the cost of equity for Intermountain? 13
A. Intermountain is heavily reliant on sales to industrial customers. As noted above, 14
approximately 43.22 percent of Intermountain’s total natural gas deliveries in Idaho were 15
to industrial customers. This concentration is higher than all but two of the proxy group 16
companies. A high degree of customer concentration increases Intermountain’s risk 17
related to customer migration, changes in economic conditions and competition. This risk 18
is greater in Intermountain’s service territory because the residential and commercial 19
customers rely on the success of the food processing industry for sales and employment. 20
Increased customer and economic diversity decreases the effect that any one customer or 21
industry can have on a company’s sales. Thus, Intermountain’s service territory, where 22
industrial customers represent a large portion of natural gas sales and commercial and 23
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A. BULKLEY, DI
INTERMOUNTAIN GAS
residential customers rely economically on the success of the one industry segment, 1
implies that Intermountain has an above average risk profile when compared to the 2
companies in the proxy group. 3
E. Flotation Cost 4
Q. What are flotation costs? 5
A. Flotation costs are the costs associated with the sale of new issues of common stock. 6
These costs include out-of-pocket expenditures for preparation, filing, underwriting, and 7
other issuance costs. 8
Q. Why is it important to consider flotation costs in the allowed ROE? 9
A. A regulated utility must have the opportunity to earn an ROE that is both competitive and 10
compensatory to attract and retain new investors. To the extent that a company is denied 11
the opportunity to recover prudently incurred flotation costs, actual returns will fall short 12
of expected (or required) returns, thereby diluting equity share value. 13
Q. Are flotation costs part of the utility’s invested costs or part of the utility’s expenses? 14
A. Flotation costs are part of the invested costs of the utility, which are properly reflected on 15
the balance sheet under “paid in capital.” They are not current expenses, and, therefore, 16
are not reflected on the income statement. Rather, like investments in rate base or the 17
issuance costs of long-term debt, flotation costs are incurred over time. As a result, the 18
great majority of a utility’s flotation cost is incurred prior to the test year but remains part 19
of the cost structure that exists during the test year and beyond, and as such, should be 20
recognized for ratemaking purposes. Therefore, it is irrelevant whether an issuance 21
occurs during the test year or is planned for the test year because failure to allow recovery 22
of past flotation costs may deny Intermountain the opportunity to earn its required ROR 23
in the future. 24
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A. BULKLEY, DI
INTERMOUNTAIN GAS
Q. Please provide an example of why a flotation cost adjustment is necessary to 1
compensate investors for the capital they have invested. 2
A. Suppose MDU Resources issues stock with a value of $100, and an equity investor 3
invests $100 in MDU Resources in exchange for that stock. Further suppose that, after 4
paying the flotation costs associated with the equity issuance, which include fees paid to 5
underwriters and attorneys, among others, MDU Resources ends up with only $97 of 6
issuance proceeds, rather than the $100 the investor contributed. MDU Resources invests 7
that $97 in plant used to serve its customers, which becomes part of rate base. Absent a 8
flotation cost adjustment, the investor will thereafter earn a return on only the $97 9
invested in rate base, even though she contributed $100. Making a small flotation cost 10
adjustment gives the investor a reasonable opportunity to earn the authorized return, 11
rather than the lower return that results when the authorized return is applied to an 12
amount less than what the investor contributed. 13
Q. Is the date of MDU Resources’ last issued common equity important in the 14
determination of flotation costs? 15
A. No. As shown in Exhibit No. 11, MDU Resources closed on equity issuances of 16
approximately $58 million and $54 million (for a total of 4.7 million shares of common 17
stock) in November 2002 and February 2004, respectively. The vintage of the issuance, 18
however, is not particularly important because the investor suffers a shortfall in every 19
year that he should have a reasonable opportunity to earn a return on the full amount of 20
capital that he has contributed. Returning to my earlier example, the investor who 21
contributed $100 is entitled to a reasonable opportunity to earn a return on $100 not only 22
in the first year after the investment, but in every subsequent year in which he has the 23
PAGE 73 OF 79
A. BULKLEY, DI
INTERMOUNTAIN GAS
$100 invested. Leaving aside depreciation, which is dealt with separately, there is no 1
basis to conclude that the investor is entitled to earn a return on $100 in the first year after 2
issuance, but thereafter is entitled to earn a return on only $97. As long as the $100 is 3
invested, the investor should have a reasonable opportunity to earn a return on the entire 4
amount. 5
Q. Is the need to consider flotation costs recognized by the academic and financial 6
communities? 7
A. Yes. The need to reimburse shareholders for the lost returns associated with equity 8
issuance costs is recognized by the academic and financial communities in the same spirit 9
that investors are reimbursed for the costs of issuing debt. This treatment is consistent 10
with the philosophy of a fair ROR. According to Dr. Shannon Pratt: 11
Flotation costs occur when new issues of stock or debt are sold to the public. 12
The firm usually incurs several kinds of flotation or transaction costs, which 13
reduce the actual proceeds received by the firm. Some of these are direct 14
out-of-pocket outlays, such as fees paid to underwriters, legal expenses, and 15
prospectus preparation costs. Because of this reduction in proceeds, the 16
firm’s required returns on these proceeds equate to a higher return to 17
compensate for the additional costs. Flotation costs can be accounted for 18
either by amortizing the cost, thus reducing the cash flow to discount, or by 19
incorporating the cost into the cost of capital. Because flotation costs are 20
not typically applied to operating cash flow, one must incorporate them into 21
the cost of capital.89 22
Q. How did you calculate the flotation costs for MDU Resources? 23
A. My flotation cost calculation is based on the costs of issuing equity that were incurred by 24
MDU Resources in its two most recent common equity issuance. These issuance costs 25
were applied to my proxy group. Applying the actual issuance costs for MDU Resources 26

89 Shannon P. Pratt, Cost of Capital Estimation and Applications, Second Edition, at 220-221.
PAGE 74 OF 79
A. BULKLEY, DI
INTERMOUNTAIN GAS
provided in Exhibit No. 11, to the DCF analysis, the flotation costs are estimated to be 1
0.14 percent (i.e., 14 basis points). 2
Q. Do your final results include an adjustment for flotation cost recovery? 3
A. No. I did not make an explicit adjustment for flotation costs to any of my quantitative 4
analyses. Rather, I provide the above result for consideration in my recommended ROE, 5
which reflects the range of results from my Constant Growth DCF, CAPM, ECAPM and 6
Risk Premium analyses. 7
CAPITAL STRUCTURE 8
Is the capital structure of a company an important consideration in the determination 9
of the appropriate ROE? 10
A. Yes, it is. Assuming other factors equal, a higher debt ratio increases the risk to investors. 11
For debt holders, higher debt ratios result in a greater portion of the available cash flow 12
being required to meet debt service, thereby increasing the risk associated with the 13
payments on debt. The result of increased risk is a higher interest rate. The incremental 14
risk of a higher debt ratio is more significant for common equity shareholders. Common 15
shareholders are the residual claimants on the cash flow of a company. Therefore, the 16
greater the debt service requirement, the less cash flow available for common equity 17
holders. 18
What is Intermountain’s proposed capital structure? 19
A. Intermountain is proposing to establish a capital structure consisting of 50.00 percent 20
common equity and 50.00 percent long-term debt. 21
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Did you conduct any analysis to determine if this requested equity ratio was 1
reasonable? 2
A. Yes. I reviewed the Company’s proposed capital structure relative to the actual capital 3
structures of the utility operating subsidiaries of the companies in the proxy group. Since 4
the ROE is set based on the return that is derived from the risk-comparable proxy group, 5
it is reasonable to look to the average capital structure for the proxy groups to benchmark 6
the equity ratios for the Company. 7
Please discuss your analysis of the capital structures of the proxy group companies. 8
A. Specifically, I calculated the mean proportions of common equity and long-term debt 9
over the past three years for each of the companies in the proxy group at the operating 10
subsidiary level. Exhibit No. 12 summarizes the actual capital structures of the operating 11
subsidiaries. As shown, the average equity ratios for the operating subsidiaries of the 12
proxy group range from 48.73 percent to 61.47 percent, with a mean of 56.41 percent. 13
Intermountain’s proposed equity ratio of 50.00 percent is well below the mean 14
established by the capital structures of the utility operating subsidiaries of the proxy 15
group. 16
Do you have any additional comments regarding the relationship between the 17
authorized equity ratio and the authorized ROE? 18
A. Yes. There is a direct relationship between the authorized equity ratio and the authorized 19
ROE. In particular, the authorized equity ratio is a primary indicator of financial risk for 20
a regulated utility such as Intermountain. To the extent the authorized equity ratio is 21
reduced, a corresponding increase is necessary in the authorized ROE to compensate 22
investors for the greater financial risk associated with a lower equity ratio. 23
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A. BULKLEY, DI
INTERMOUNTAIN GAS
Are there other factors to be considered in setting the Company’s capital structure? 1
A. Yes. The credit rating agencies’ response to the Tax Cuts and Jobs Act of 2017 (TCJA) 2
must also be considered when determining the equity ratio. All three rating agencies 3
have noted that the TCJA has negative implications for utility cash flows. S&P and Fitch 4
specifically identified increasing the equity ratio as one approach to ensure that utilities 5
have sufficient cash flows following the federal income tax rate reductions and the loss of 6
bonus depreciation. As S&P noted “[r]egulators must also recognize that tax reform is a 7
strain on utility credit quality, and we expect companies to request stronger capital 8
structures and other means to offset some of the negative impact.”90 Furthermore, 9
Moody’s downgraded the rating outlook for the entire utilities sector in June 2018 and 10
downgraded the ratings of numerous utilities based in part on the negative effects of the 11
TCJA on cash flows. 12
Most recently, Moody’s revised its 2023 outlook for the utilities sector to 13
“negative” based on ongoing challenges of inflation, increasing interest rates and higher 14
natural gas prices. Moody’s noted that these challenges increase the pressure on customer 15
affordability and the ability of utilities to promptly recover their costs. Moody’s concluded 16
that regulated utilities’ financial metrics are already under pressure with little cushion, and 17
that sustained capital spending is likely as utilities continue progress towards emissions 18

90 Standard & Poor’s Ratings, “U.S. Tax Reform: For Utilities’ Credit Quality, Challenges Abound,” January 24,
2018, at 5.
PAGE 77 OF 79
A. BULKLEY, DI
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reductions and net-zero goals. Moody’s noted that the outlook could return to stable if 1
regulatory support remains intact.91 2
S&P also continues to maintain a negative outlook for the utility industry in 202292 3
and noted that since downgrades outpaced upgrades for a second consecutive year in 2021 4
for the first time ever the median investor-owned utility credit rating fell to the “BBB” 5
category.93 Further, S&P expects continued pressure on cash flows over the near-term as 6
utilities continue to increase leverage to fund capital expenditure plans necessary to reduce 7
greenhouse gas emission and improve safety and reliability. Finally, S&P also highlighted 8
inflation, higher interest rates and rising commodity prices as additional risks that could 9
further constrain the credit metrics for utilities over the near-term. In regards to inflation 10
S&P noted: 11
Inflation recently spiked to its highest level in decades after rising for 12
several consecutive months in 2021. Given the sustained increase to the 13
U.S. consumer price index in 2021, inflation no longer appears to be just 14
transitory and may have financial implications for the investor-owned North 15
American regulated utility industry. Because of the regulatory lag within 16
the industry, inflation, which causes prices to rise, typically leads to a 17
weakening of financial performance. The regulatory lag is the timing 18
difference between when costs are incurred and when regulators allow those 19
costs to be fully recovered from ratepayers.94 20
The credit ratings agencies’ continued concerns over the negative effects of 21
inflation, and increased capital expenditures underscore the importance of maintaining 22

91 See, e.g., Walton, Robert, “Moody’s adopts negative outlook for regulated utility sector, warns on gas prices,
economy and cost recovery,” Utility Dive, November 11, 2022; Bennett, Abbie, “Moody’s revises US regulated
utilities outlook to negative,” S&P Capital IQ Pro, November 11, 2022.
92 S&P Global Ratings, “Regulated Utilities: Credit quality has weakened and credit risks are rising,” July 14, 2022.
93 S&P Global Ratings, “For the First Time Ever, the Median Investor-Owned Utility Ratings Falls to the 'BBB'
Category,” January 20, 2022.
94 Ibid.
PAGE 78 OF 79
A. BULKLEY, DI
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adequate cash flow metrics for the industry, as a whole, and Intermountain, particularly, in 1
the context of this proceeding. 2
What is your conclusion with regard to the Company’s proposed capital structure? 3
A. Considering the actual capital structures of the proxy group operating companies, I 4
believe that Intermountain’s proposed common equity ratio of 50.00 percent is 5
reasonable. The proposed equity ratio is well below the average equity ratio established 6
by the capital structures of the utility operating subsidiaries of the proxy companies, 7
which would suggest that Intermountain has greater financial risk than the proxy group. 8
This proposed capital structure would support an ROE towards the high-end of my 9
recommended ROE range. 10
CONCLUSIONS AND RECOMMENDATION 11
What is your conclusion regarding a fair ROE for Intermountain’s natural gas 12
distribution operations in Idaho? 13
A. Based on the quantitative and qualitative analyses presented in my Direct Testimony, and 14
in light of the business and financial risks of Intermountain as compared to the proxy 15
group, it is my view that an ROE of 10.30 percent on an equity ratio of 50.00 percent 16
would fairly balance the interests of customers and shareholders. This ROE would 17
enable the Company to maintain its financial integrity and therefore its ability to attract 18
capital at reasonable rates under a variety of economic and financial market conditions, 19
while continuing to provide safe, reliable, and affordable gas utility service to customers 20
in Idaho. 21
22
PAGE 79 OF 79
A. BULKLEY, DI
INTERMOUNTAIN GAS
Figure 15: Summary of Results 1
Constant Growth DCF
Mean Low Mean Mean High
30-Day Average 8.73% 9.85% 11.41%
90-Day Average 8.48% 9.61% 11.16%
180-Day Average 8.43% 9.56% 11.11%
Median Low Median Median High
30-Day Average 8.62% 9.91% 10.95%
90-Day Average 8.33% 9.62% 10.70%
180-Day Average 8.28% 9.57% 10.66%
CAPM

Current 30-day
Average Treasury
Bond Yield
Near-Term Blue
Chip Forecast
Yield
Long-Term Blue
Chip Forecast
Yield
Value Line Beta 11.29% 11.30% 11.27%
Bloomberg Beta 10.81% 10.83% 10.79%
Long-term Avg. Beta 10.38% 10.40% 10.34%
ECAPM
Value Line Beta 11.65% 11.66% 11.64%
Bloomberg Beta 11.30% 11.31% 11.28%
Long-term Avg. Beta 10.97% 10.99% 10.95%
Bond Yield Risk Premium

Current 30-day
Average Treasury
Bond Yield
Near-Term Blue
Chip Forecast
Yield
Long-Term Blue
Chip Forecast
Yield
Results 10.16% 10.20% 10.12%
2
Does this conclude your Direct Testimony? 3
A. Yes, it does. 4
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 1 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
    Ann E. Bulkley brattle.com | 1 
Ann E. Bulkley 
PRINCIPAL 
Boston 508.981.0866 [e-mail] 
With more than 25 years of experience in the energy industry, Ms. 
Bulkley specializes in regulatory economics for the electric and natural 
gas sectors, including rate of return, cost of equity, and capital 
structure issues. 
Ms. Bulkley has extensive state and federal regulatory experience, and she has provided expert 
testimony on the cost of capital in nearly 100 regulatory proceedings before 32 state regulatory 
commissions and the Federal Energy Regulatory Commission (FERC). 
In addition to her regulatory experience, Ms. Bulkley has provided valuation and appraisal services for a 
variety of purposes, including the sale or acquisition of utility assets, regulated ratemaking, ad valorem 
tax disputes, and other litigation purposes. In addition, she has experience in the areas of contract and 
business unit valuation, strategic alliances, market restructuring, and regulatory and litigation support.  
Ms. Bulkley is a Certified General Appraiser licensed in the Commonwealth of Massachusetts and the 
State of New Hampshire.  
Prior to joining Brattle, Ms. Bulkley was a Senior Vice President at an economic consultancy and held 
senior positions at several other consulting firms.
AREAS OF EXPERTISE 
Regulatory Economics, Finance & Rates
Regulatory Investigations & Enforcement
Tax Controversy & Transfer Pricing
Electricity Litigation & Regulatory Disputes
M&A Litigation
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A. Bulkley, IGCExhibit No. 1Page 1 of 18
    Ann E. Bulkley brattle.com | 2 
EDUCATION 
Boston University
MA in Economics
Simmons College
BA in Economics and Finance
PROFESSIONAL EXPERIENCE 
The Brattle Group (2022–Present)
Principal
Concentric Energy Advisors, Inc. (2002–2021)
Senior Vice President
Vice President
Assistant Vice President
Project Manager
Navigant Consulting, Inc. (1997–2002)
Project Manager
Reed Consulting Group (1995‐1997)
Consultant‐ Project Manager
Cahners Publishing Company (1995)
Economist
SELECTED CONSULTING EXPERIENCE & EXPERT TESTIMONY 
REGULATORY ANALYSIS AND RATEMAKING 
Have provided a range of advisory services relating to regulatory policy analysis and many aspects of 
utility ratemaking, with specific services including:  
Cost of capital and return on equity testimony, cost of service and rate design analysis and
testimony, development of ratemaking strategies
Development of merchant function exit strategies
Case No. INT-G-22-07
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    Ann E. Bulkley brattle.com | 3 
Analysis and program development to address residual energy supply and/or provider of last resort
obligations
Stranded costs assessment and recovery
Performance‐based ratemaking analysis and design
Many aspects of traditional utility ratemaking (e.g., rate design, rate base valuation)
COST OF CAPITAL  
Have provided expert testimony on the cost of capital and capital structure in nearly 100 regulatory 
proceedings before state and federal regulatory commissions in the United States.  
RATEMAKING 
Have assisted several clients with analysis to support investor‐owned and municipal utility clients in the 
preparation of rate cases. Sample engagements include: 
Assisted several investor‐owned and municipal clients on cost allocation and rate design issues
including the development of expert testimony supporting recommended rate alternatives.
Worked with Canadian regulatory staff to establish filing requirements for a rate review of a newly
regulated electric utility. Along with analyzing and evaluating rate application, attended hearings
and conducted investigation of rate application for regulatory staff. And prepared, supported, and
defended recommendations for revenue requirements and rates for the company. Additionally,
developed rates for gas utility for transportation program and ancillary services.
VALUATION 
Have provided valuation services to utility clients, unregulated generators, and private equity clients for 
a variety of purposes, including ratemaking, fair value, ad valorem tax, litigation and damages, and 
acquisition. Appraisal practices are consistent with the national standards established by the Uniform 
Standards of Professional Appraisal Practice.  
Representative projects/clients have included:  
Prepared appraisals of electric utility transmission and distribution assets for ad valorem tax
purposes.
Prepared appraisals of several hydroelectric generating facilities for ad valorem tax purposes.
Conducted appraisals of fossil fuel generating facilities for ad valorem tax purposes.
Conducted appraisals of generating assets for the purposes of unwinding sale‐leaseback
agreements.
For a confidential utility client, prepared valuation of fossil and nuclear generation assets for
financing purposes for regulated utility client.
Case No. INT-G-22-07
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    Ann E. Bulkley brattle.com | 4 
Prepared a valuation of a portfolio of generation assets for a large energy utility to be used for
strategic planning purposes. Valuation approach included an income approach, a real options
analysis, and a risk analysis.
Assisted clients in the restructuring of NUG contracts through the valuation of the underlying assets.
Performed analysis to determine the option value of a plant in a competitively priced electricity
market following the settlement of the NUG contract.
Prepared market valuations of several purchase power contracts for large electric utilities in the sale
of purchase power contracts. Assignment included an assessment of the regional power market,
analysis of the underlying purchase power contracts, and a traditional discounted cash flow
valuation approach, as well as a risk analysis. Analyzed bids from potential acquirers using income
and risk analysis approached. Prepared an assessment of the credit issues and value at risk for the
selling utility.
Prepared appraisal of a portfolio of generating facilities for a large electric utility to be used for
financing purposes.
Prepared fair value rate base analyses for Northern Indiana Public Service Company for several
electric rate proceedings. Valuation approaches used in this project included income, cost, and
comparable sales approaches.
Prepared an appraisal of a fleet of fossil generating assets for a large electric utility to establish the
value of assets transferred from utility property.
Conducted due diligence on an electric transmission and distribution system as part of a buy‐side
due diligence team.
Provided analytical support for and prepared appraisal reports of generation assets to be used in ad
valorem tax disputes.
Provided analytical support and prepared testimony regarding the valuation of electric distribution
system assets in five communities in a condemnation proceeding.
Prepared feasibility reports analyzing the expected net benefits resulting from municipal ownership
of investor‐owned utility operations.
Prepared independent analyses of proposal for the proposed government condemnation of the
investor‐owned utilities in Maine and the formation of a public power district.
Valued purchase power agreements in the transfer of assets to a deregulated electric market.
STRATEGIC AND FINANCIAL ADVISORY SERVICES 
Have assisted several clients across North America with analytically‐based strategic planning, due 
diligence, and financial advisory services.  
Representative projects include: 
Case No. INT-G-22-07
A. Bulkley, IGCExhibit No. 1Page 4 of 18
    Ann E. Bulkley brattle.com | 5 
Preparation of feasibility studies for bond issuances for municipal and district steam clients.
Assisted in the development of a generation strategy for an electric utility. Analyzed various NERC
regions to identify potential market entry points. Evaluated potential competitors and alliance
partners. Assisted in the development of gas and electric price forecasts. Developed a framework for
the implementation of a risk management program.
Assisted clients in identifying potential joint venture opportunities and alliance partners. Contacted
interviewed and evaluated potential alliance candidates based on company‐established criteria for
several LDCs and marketing companies. Worked with several LDCs and unregulated marketing
companies to establish alliances to enter into the retail energy market. Prepared testimony in
support of several merger cases and participated in the regulatory process to obtain approval for
these mergers.
Assisted clients in several buy‐side due diligence efforts, providing regulatory insight and developing
valuation recommendations for acquisitions of both electric and gas properties.
SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
Arizona Corporation Commission 
UNS Electric 11/22 UNS Electric Docket No. E‐
04204A‐15‐0251 
Return on Equity 
Tucson Electric Power 
Company 
6/22 Tucson Electric Power 
Company 
Docket No. G‐
01933A‐22‐0107 
Return on Equity 
Southwest Gas Corporation 12/21 Southwest Gas 
Corporation 
Docket No. G‐
01551A‐21‐0368 
Return on Equity 
Arizona Public Service 
Company 
10/19 Arizona Public Service 
Company 
Docket No. E‐
01345A‐19‐0236 
Return on Equity 
Tucson Electric Power 
Company 
04/19 Tucson Electric Power 
Company 
Docket No. E‐
01933A‐19‐0028 
Return on Equity 
Tucson Electric Power 
Company 
11/15 Tucson Electric Power 
Company 
Docket No. E‐
01933A‐15‐0322 
Return on Equity 
UNS Electric 05/15 UNS Electric Docket No. E‐
04204A‐15‐0142 
Return on Equity 
UNS Electric 12/12 UNS Electric Docket No. E‐
04204A‐12‐0504  
Return on Equity 
Case No. INT-G-22-07
A. Bulkley, IGCExhibit No. 1Page 5 of 18

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SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
Arkansas Public Service Commission 
Oklahoma Gas and Electric 
Co 
10/21 Oklahoma Gas and 
Electric Co 
Docket No. D‐18‐046‐
FR 
Return on Equity 
Arkansas Oklahoma Gas 
Corporation  
10/13 Arkansas Oklahoma Gas 
Corporation 
Docket No. 13‐078‐U Return on Equity 
California Public Utilities Commission  
Pacificorp, d/b/a Pacific 
Power 
5/22 Pacificorp, d/b/a Pacific 
Power 
 Return on Equity 
San Jose Water Company 05/21 San Jose Water 
Company 
A2105004 Return on Equity 
Colorado Public Utilities Commission 
Public Service Company of 
Colorado 
01/22 Public Service Company 
of Colorado 
Docket No. 22AL‐
0046G 
Return on Equity 
Public Service Company of 
Colorado 
07/21 Public Service Company 
of Colorado 
21AL‐0317E Return on Equity 
Public Service Company of 
Colorado 
02/20 Public Service Company 
of Colorado 
20AL‐0049G Return on Equity 
Public Service Company of 
Colorado 
05/19 Public Service Company 
of Colorado 
19AL‐0268E Return on Equity 
Public Service Company of 
Colorado 
01/19 Public Service Company 
of Colorado 
19AL‐0063ST Return on Equity 
Atmos Energy Corporation 05/15 Atmos Energy 
Corporation 
Docket No. 15AL‐
0299G 
Return on Equity 
Atmos Energy Corporation 04/14 Atmos Energy 
Corporation 
Docket No. 14AL‐
0300G 
Return on Equity 
Atmos Energy Corporation 05/13 Atmos Energy 
Corporation 
Docket No. 13AL‐
0496G 
Return on Equity 
Connecticut Public Utilities Regulatory Authority 
United Illuminating 09/22 United Illuminating Docket No. 22‐08‐08 Return on Equity 
Case No. INT-G-22-07
A. Bulkley, IGC Exhibit No. 1 Page 6 of 18

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SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
United Illuminating 05/21 United Illuminating Docket No. 17‐12‐
03RE11 
Return on Equity 
Connecticut Water 
Company 
01/21 Connecticut Water 
Company 
Docket No. 20‐12‐30 Return on Equity 
Connecticut Natural Gas 
Corporation 
06/18 Connecticut Natural Gas 
Corporation 
Docket No. 18‐05‐16 Return on Equity 
Yankee Gas Services Co. 
d/b/a Eversource Energy 
06/18 Yankee Gas Services Co. 
d/b/a Eversource Energy 
Docket No. 18‐05‐10 Return on Equity 
The Southern Connecticut 
Gas Company 
06/17 The Southern 
Connecticut Gas 
Company 
Docket No. 17‐05‐42 Return on Equity 
The United Illuminating 
Company 
07/16 The United Illuminating 
Company 
Docket No. 16‐06‐04 Return on Equity 
Federal Energy Regulatory Commission 
Northern Natural Gas 
Company 
07/22 Northern Natural Gas 
Company 
Docket No. RP22‐___ Return on Equity 
Transwestern Pipeline 
Company,  LLC 
07/22 Transwestern Pipeline 
Company, LLC 
Docket No. RP22‐___ Return on Equity 
Florida Gas Transmission 02/21 Florida Gas Transmission Docket No. RP21‐441 Return on Equity 
TransCanyon 01/21 TransCanyon Docket No. ER21‐
1065 
Return on Equity 
Duke Energy 12/20 Duke Energy Docket No. EL21‐9‐
000 
Return on Equity 
Wisconsin Electric Power 
Company 
08/20 Wisconsin Electric 
Power Company 
Docket No. EL20‐57‐
000 
Return on Equity 
Panhandle Eastern Pipe 
Line Company, LP 
10/19 Panhandle Eastern Pipe 
Line Company, LP 
Docket Nos.  
RP19‐78‐000 
RP19‐78‐001 
Return on Equity 
Case No. INT-G-22-07
A. Bulkley, IGC Exhibit No. 1 Page 7 of 18
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SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
Panhandle Eastern Pipe 
Line Company, LP 
08/19 Panhandle Eastern Pipe 
Line Company, LP 
Docket Nos.  
RP19‐1523 
Return on Equity 
Sea Robin Pipeline 
Company LLC 
11/18 Sea Robin Pipeline 
Company LLC 
Docket# RP19‐352‐
000 
Return on Equity 
Tallgrass Interstate Gas 
Transmission 
10/15 Tallgrass Interstate Gas 
Transmission 
RP16‐137 Return on Equity 
Idaho Public Utilities Commission 
PacifiCorp d/b/a Rocky 
Mountain Power 
05/21 PacifiCorp d/b/a Rocky 
Mountain Power 
Case No. PAC‐E‐21‐
07 
Return on 
Equity 
Illinois Commerce Commission 
Illinois American Water 02/22 Illinois American Water Docket No. 22‐0210 Return on 
Equity 
North Shore Gas Company 02/21 North Shore Gas 
Company 
No. 20‐0810 Return on 
Equity 
Indiana Utility Regulatory Commission 
Indiana Michigan Power 
Co.  
07/21 Indiana Michigan 
Power Co. 
IURC Cause No. 
45576 
Return on 
Equity 
Indiana Gas Company Inc. 12/20 Indiana Gas Company 
Inc. 
IURC Cause No. 
45468 
Return on 
Equity 
Southern Indiana Gas and 
Electric Company 
10/20 Southern Indiana Gas 
and Electric Company 
IURC Cause No. 
45447 
Return on 
Equity 
Indiana and Michigan 
American Water Company 
09/18 Indiana and Michigan 
American Water 
Company 
IURC Cause No. 
45142 
Return on 
Equity 
Indianapolis Power and 
Light Company 
12/17 Indianapolis Power and 
Light Company 
Cause No. 45029 Fair Value 
Northern Indiana Public 
Service Company 
09/17 Northern Indiana 
Public Service 
Company 
Cause No. 44988 Fair Value 
Case No. INT-G-22-07
A. Bulkley, IGCExhibit No. 1Page 8 of 18
    Ann E. Bulkley brattle.com | 9 
SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
Indianapolis Power and 
Light Company 
12/16 Indianapolis Power and 
Light Company 
Cause No.44893 Fair Value 
Northern Indiana Public 
Service Company 
10/15 Northern Indiana 
Public Service 
Company 
Cause No. 44688 Fair Value 
Indianapolis Power and 
Light Company 
09/15 Indianapolis Power and 
Light Company 
Cause No. 44576 
Cause No. 44602 
Fair Value 
Kokomo Gas and Fuel 
Company 
09/10 Kokomo Gas and Fuel 
Company 
Cause No. 43942 Fair Value  
Northern Indiana Fuel and 
Light Company, Inc. 
09/10 Northern Indiana Fuel 
and Light Company, 
Inc. 
Cause No. 43943 Fair Value 
Iowa Department of Commerce Utilities Board 
MidAmerican Energy 
Company 
01/22 MidAmerican Energy 
Company 
Docket No. RPU‐
2022‐0001 
Return on 
Equity 
Iowa‐American Water 
Company 
08/20 Iowa‐American Water 
Company 
Docket No. RPU‐
2020‐0001 
Return on 
Equity 
Kansas Corporation Commission 
Atmos Energy Corporation 08/15 Atmos Energy 
Corporation 
Docket No. 16‐
ATMG‐079‐RTS 
Return on Equity 
Kentucky Public Service Commission 
Kentucky American Water 
Company 
11/18 Kentucky American 
Water Company 
Docket No. 2018‐
00358 
Return on Equity 
Maine Public Utilities Commission 
Central Maine Power 08/22 Central Maine Power Docket No. 2022‐
00152 
Return on Equity 
Central Maine Power 10/18 Central Maine Power Docket No. 2018‐194 Return on Equity 
Maryland Public Service Commission 
Case No. INT-G-22-07
A. Bulkley, IGCExhibit No. 1Page 9 of 18

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SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
Maryland American Water 
Company 
06/18 Maryland American 
Water Company 
Case No. 9487 Return on Equity 
Massachusetts Appellate Tax Board 
Hopkinton LNG Corporation 03/20 Hopkinton LNG 
Corporation 
Docket No.  

Valuation of 
LNG Facility 
FirstLight Hydro Generating 
Company 
06/17 FirstLight Hydro 
Generating Company 
Docket No. F‐325471 
Docket No. F‐325472 
Docket No. F‐325473 
Docket No. F‐325474 
Valuation of 
Electric 
Generation 
Assets 
Massachusetts Department of Public Utilities 
National Grid USA 11/20 Boston Gas Company DPU 20‐120 Return on Equity 
Berkshire Gas Company 05/18 Berkshire Gas Company DPU 18‐40 Return on Equity 
Unitil Corporation 01/04 Fitchburg Gas and 
Electric 
DTE 03‐52  Integrated 
Resource Plan; 
Gas Demand 
Forecast 
Michigan Public Service Commission 
Michigan Gas Utilities 
Corporation 
03/21 Michigan Gas Utilities 
Corporation 
Case No. U‐20718 Return on Equity 
Wisconsin Electric Power 
Company 
12/11 Wisconsin Electric 
Power Company 
Case No. U‐16830 Return on Equity 
Michigan Tax Tribunal 
New Covert Generating Co., 
LLC. 
03/18 The Township of New 
Covert Michigan 
MTT Docket No. 
000248TT and 16‐
001888‐TT 
Valuation of 
Electric 
Generation 
Assets 
Covert Township 07/14 New Covert Generating 
Co., LLC. 
Docket No. 399578 Valuation of 
Electric 
Generation 
Assets 
Case No. INT-G-22-07
A. Bulkley, IGC Exhibit No. 1 Page 10 of 18
    Ann E. Bulkley brattle.com | 11 
SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
Minnesota Public Utilities Commission 
CenterPoint Energy 
Resources 
11/21 CenterPoint Energy 
Resources 
D‐G‐008/GR‐21‐435 Return on Equity 
Allete, Inc. d/b/a 
Minnesota Power  
11/21 Allete, Inc. d/b/a 
Minnesota Power 
D‐E‐015/GR‐21‐630 Return on Equity 
Otter Tail Power Company 11/20 Otter Tail Power 
Company 
E017/GR‐20‐719 Return on Equity 
Allete, Inc. d/b/a 
Minnesota Power 
11/19 Allete, Inc. d/b/a 
Minnesota Power 
E015/GR‐19‐442 Return on Equity 
CenterPoint Energy 
Resources Corporation 
d/b/a CenterPoint Energy 
Minnesota Gas 
10/19 CenterPoint Energy 
Resources Corporation 
d/b/a CenterPoint 
Energy Minnesota Gas 
G‐008/GR‐19‐524 Return on Equity 
Great Plains Natural Gas 
Co. 
09/19 Great Plains Natural Gas 
Co.  
Docket No. G004/GR‐
19‐511 
Return on Equity 
Minnesota Energy 
Resources 
Corporation 
10/17 Minnesota Energy 
Resources 
Corporation 
Docket No. G011/GR‐
17‐563 
Return on Equity 
Missouri Public Service Commission 
Ameren Missouri 08/22 Ameren Missouri File No. ER‐2022‐
0337 
Return on Equity 
Missouri American Water 
Company 
07/22 Missouri American 
Water Company 
Case No. WR‐2022‐
0303 
Case No. SR‐2022‐
0304 
Return on Equity 
Evergy Missouri West  1/22 Evergy Missouri West File No. ER‐2022‐
0130  
Return on Equity 
Evergy Missouri Metro 1/22 Evergy Missouri Metro File No. ER‐2022‐
0129  
Return on Equity 
Case No. INT-G-22-07
A. Bulkley, IGCExhibit No. 1Page 11 of 18

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SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
Ameren Missouri 03/21 Ameren Missouri Docket No. ER‐2021‐
0240 
Docket No. GR‐2021‐
0241 
Return on Equity 
Missouri American Water 
Company 
06/20 Missouri American 
Water Company 
Case No. WR‐2020‐
0344 
Case No. SR‐2020‐
0345 

Return on Equity 
Missouri American Water 
Company 
06/17 Missouri American 
Water Company 
Case No. WR‐17‐0285 
Case No. SR‐17‐0286 
Return on Equity 
Montana Public Service Commission 
Montana‐Dakota Utilities 
Co. 
06/20 Montana‐Dakota 
Utilities Co. 
D2020.06.076 Return on Equity 
Montana‐Dakota Utilities 
Co. 
09/18 Montana‐Dakota 
Utilities Co. 
D2018.9.60 Return on Equity 
New Hampshire ‐ Board of Tax and Land Appeals 
Public Service Company of 
New Hampshire d/b/a 
Eversource Energy 
11/19
12/19 
Public Service 
Company of New 
Hampshire d/b/a 
Eversource Energy 
Master Docket No. 
28873‐14‐15‐16‐
17PT 
Valuation of 
Utility Property 
and 
Generating 
Assets 
New Hampshire Public Utilities Commission 
Public Service Company of 
New Hampshire 
05/19 Public Service Company 
of New Hampshire 
DE‐19‐057 Return on Equity 
New Hampshire‐Merrimack County Superior Court 
Northern New England 
Telephone Operations, LLC 
d/b/a FairPoint 
Communications, NNE 
04/18 Northern New England 
Telephone Operations, 
LLC d/b/a FairPoint 
Communications, NNE 
220‐2012‐CV‐1100 Valuation of 
Utility Property 
New Hampshire‐Rockingham Superior Court 
Case No. INT-G-22-07
A. Bulkley, IGC Exhibit No. 1 Page 12 of 18

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SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
Eversource Energy 05/18 Public Service 
Commission of New 
Hampshire 
218‐2016‐CV‐00899 
218‐2017‐CV‐00917 
Valuation of 
Utility Property 
New Jersey Board of Public Utilities 
New Jersey American 
Water Company, Inc. 
01/22 New Jersey American 
Water Company, Inc. 
WR22010019 Return on Equity 
Public Service Electric and 
Gas Company 
10/20 Public Service Electric 
and Gas Company 
EO18101115 Return on Equity 
New Jersey American 
Water Company, Inc. 
12/19 New Jersey American 
Water Company, Inc. 
WR19121516 Return on Equity 
Public Service Electric and 
Gas Company 
04/19 Public Service Electric 
and Gas Company 
EO18060629 
GO18060630 
Return on Equity 
Public Service Electric and 
Gas Company 
02/18 Public Service Electric 
and Gas Company 
GR17070776 Return on Equity 
Public Service Electric and 
Gas Company 
01/18 Public Service Electric 
and Gas Company 
ER18010029 
GR18010030 
Return on Equity 
New Mexico Public Regulation Commission 
Southwestern Public 
Service Company 
07/19 Southwestern Public 
Service Company 
19‐00170‐UT Return on Equity 
Southwestern Public 
Service Company 
10/17 Southwestern Public 
Service Company 
Case No. 17‐00255‐
UT 
Return on Equity 
Southwestern Public 
Service Company 
12/16 Southwestern Public 
Service Company 
Case No. 16‐00269‐
UT 
Return on Equity 
Southwestern Public 
Service Company 
10/15 Southwestern Public 
Service Company 
Case No. 15‐00296‐
UT 
Return on Equity 
Southwestern Public 
Service Company 
06/15 Southwestern Public 
Service Company 
Case No. 15‐00139‐
UT 
Return on Equity 
New York State Department of Public Service 
Case No. INT-G-22-07
A. Bulkley, IGC Exhibit No. 1 Page 13 of 18
    Ann E. Bulkley brattle.com | 14 
SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
New York State Electric and 
Gas Company 
Rochester Gas and Electric 
05/22 New York State Electric 
and Gas Company 
Rochester Gas and 
Electric 
22‐E‐0317 
22‐G‐0318 
22‐E‐0319 
22‐G‐0320 
Return on Equity 
Corning Natural Gas 
Corporation 
07/21 Corning Natural Gas 
Corporation 
Case No. 21‐G‐0394 Return on Equity 
Central Hudson Gas and 
Electric Corporation 
08/20 Central Hudson Gas and 
Electric Corporation 
Electric  20‐E‐0428 
Gas      20‐G‐0429 
Return on Equity 
Niagara Mohawk Power 
Corporation 
07/20 National Grid USA Case No. 20‐E‐0380 
  20‐G‐0381 
Return on Equity 
Corning Natural Gas 
Corporation 
02/20 Corning Natural Gas 
Corporation 
Case No. 20‐G‐0101 Return on Equity 
New York State Electric and 
Gas Company 
Rochester Gas and Electric 
05/19 New York State Electric 
and Gas Company 
Rochester Gas and 
Electric 
19‐E‐0378 
19‐G‐0379 
19‐E‐0380 
19‐G‐0381 
Return on Equity 
Brooklyn Union Gas 
Company d/b/a National 
Grid NY 
KeySpan Gas East 
Corporation d/b/a National 
Grid 
04/19 Brooklyn Union Gas 
Company d/b/a National 
Grid NY 
KeySpan Gas East 
Corporation d/b/a 
National Grid 
19‐G‐0309 
19‐G‐0310 
Return on Equity 
Central Hudson Gas and 
Electric Corporation 
07/17 Central Hudson Gas and 
Electric Corporation 
Electric  17‐E‐0459 
Gas      17‐G‐0460 
Return on Equity 
Niagara Mohawk Power 
Corporation 
04/17 National Grid USA Case No. 17‐E‐0238 
  17‐G‐0239 
Return on Equity 
Corning Natural Gas 
Corporation 
06/16 Corning Natural Gas 
Corporation 
Case No. 16‐G‐0369 Return on Equity 
National Fuel Gas Company 04/16 National Fuel Gas 
Company 
Case No. 16‐G‐0257 Return on Equity 
Case No. INT-G-22-07
A. Bulkley, IGCExhibit No. 1Page 14 of 18

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SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
KeySpan Energy Delivery 01/16 KeySpan Energy Delivery Case No. 15‐G‐0058 
Case No. 15‐G‐0059 
Return on Equity 
New York State Electric and 
Gas Company 
Rochester Gas and Electric 
05/15 New York State Electric 
and Gas Company 
Rochester Gas and 
Electric 
Case No. 15‐E‐0283 
Case No. 15‐G‐0284 
Case No. 15‐E‐0285 
Case No. 15‐G‐0286 
Return on Equity 
North Dakota Public Service Commission 
Montana‐Dakota Utilities 
Co. 
05/22 Montana‐Dakota 
Utilities Co. 
C‐PU‐22‐194 Return on Equity 
Montana‐Dakota Utilities 
Co. 
08/20 Montana‐Dakota 
Utilities Co. 
C‐PU‐20‐379 Return on Equity 
Northern States Power 
Company 
12/12 Northern States Power 
Company 
C‐PU‐12‐813  Return on Equity 
Northern States Power 
Company 
12/10 Northern States Power 
Company 
C‐PU‐10‐657 Return on Equity  
Oklahoma Corporation Commission  
Oklahoma Gas & Electric 12/21 Oklahoma Gas & Electric Cause No. PUD 
202100164 
Return on Equity 
Arkansas Oklahoma Gas 
Corporation  
01/13 Arkansas Oklahoma Gas 
Corporation 
Cause No. PUD 
201200236  
Return on Equity 
Oregon Public Service Commission 
PacifiCorp d/b/a Pacific  
Power & Light  
03/22 PacifiCorp d/b/a Pacific 
Power & Light 
Docket No. UE‐399 Return on 
Equity 
PacifiCorp d/b/a Pacific  
Power & Light  
02/20 PacifiCorp d/b/a Pacific 
Power & Light 
Docket No. UE‐374 Return on 
Equity 
Pennsylvania Public Utility Commission  
Case No. INT-G-22-07
A. Bulkley, IGC Exhibit No. 1 Page 15 of 18

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SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
American Water Works 
Company Inc. 
04/22 Pennsylvania‐American 
Water Company 
Docket No. R‐2020‐
3031672 (water) 
Docket No. R‐2020‐
3031673 
(wastewater) 
Return on Equity 
American Water Works 
Company Inc. 
04/20 Pennsylvania‐American 
Water Company 
Docket No. R‐2020‐
3019369 (water) 
Docket No. R‐2020‐
3019371 
(wastewater) 
Return on Equity 
American Water Works 
Company Inc. 
04/17 Pennsylvania‐American 
Water Company 
Docket No. R‐2017‐
2595853 
Return on Equity 
South Dakota Public Utilities Commission  
MidAmerican Energy 
Company 
05/22 MidAmerican Energy 
Company 
D‐NG22‐005 Return on Equity 
Northern States Power 
Company 
06/14 Northern States Power 
Company 
Docket No. EL14‐058 Return on Equity 
Texas Public Utility Commission  
Entergy Texas, Inc.  07/22 Entergy Texas, Inc. D‐53719 Return on Equity 
Southwestern Public 
Service Commission 
08/19 Southwestern Public 
Service Commission 
Docket No. D‐49831 Return on Equity 
Southwestern Public 
Service Company 
01/14 Southwestern Public 
Service Company 
Docket No. 42004 Return on Equity 
Utah Public Service Commission 
PacifiCorp d/b/a Rocky 
Mountain Power 
05/20 PacifiCorp d/b/a Rocky 
Mountain Power 
Docket No. 20‐035‐
04 
Return on 
Equity 
Virginia State Corporation Commission 
Virginia American Water 
Company, Inc. 
11/21 Virginia American Water 
Company, Inc. 
Docket No. PUR‐
2021‐00255 
Return on Equity 
Case No. INT-G-22-07
A. Bulkley, IGC Exhibit No. 1 Page 16 of 18
    Ann E. Bulkley brattle.com | 17 
SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
Virginia American Water 
Company, Inc. 
11/18 Virginia American Water 
Company, Inc. 
Docket No. PUR‐
2018‐00175 
Return on Equity 
Washington Utilities Transportation Commission 
Cascade Natural Gas 
Corporation 
06/20 Cascade Natural Gas 
Corporation 
Docket No. UG‐
200568 
Return on Equity 
PacifiCorp d/b/a Pacific  
Power & Light  
12/19 PacifiCorp d/b/a Pacific 
Power & Light 
Docket No. UE‐
191024 
Return on Equity 
Cascade Natural Gas 
Corporation 
04/19 Cascade Natural Gas 
Corporation 
Docket No. UG‐
190210 
Return on Equity 
West Virginia Public Service Commission 
West Virginia American 
Water Company 
04/21 West Virginia American 
Water Company 
Case No. 21‐02369‐
W‐42T 
Return on Equity 
West Virginia American 
Water Company 
04/18 West Virginia American 
Water Company 
Case No. 18‐0573‐W‐
42T 
Case No. 18‐0576‐S‐
42T 
Return on Equity 
Wisconsin Public Service Commission 
Wisconsin Electric Power 
Company and Wisconsin 
Gas LLC 
04/22 Wisconsin Electric 
Power Company and 
Wisconsin Gas LLC 
Docket No. 05‐UR‐
110 
Return on Equity 
Wisconsin Public Service 
Corp. 
04/22 Wisconsin Public Service 
Corp. 
6690‐UR‐127 Return on Equity 
Alliant Energy Alliant Energy Return on Equity 
Wisconsin Electric Power 
Company and Wisconsin 
Gas LLC 
03/19 Wisconsin Electric 
Power Company and 
Wisconsin Gas LLC 
Docket No. 05‐UR‐
109 
Return on Equity 
Wisconsin Public Service 
Corp. 
03/19 Wisconsin Public Service 
Corp. 
6690‐UR‐126 Return on Equity 
Wyoming Public Service Commission 
Case No. INT-G-22-07
A. Bulkley, IGCExhibit No. 1Page 17 of 18
    Ann E. Bulkley brattle.com | 18 
SPONSOR DATE CASE/APPLICANT DOCKET /CASE NO. SUBJECT 
PacifiCorp d/b/a Rocky 
Mountain Power  
03/20 PacifiCorp d/b/a Rocky 
Mountain Power 
Docket No. 20000‐
578‐ER‐20 
Return on Equity 
Montana‐Dakota Utilities 
Co. 
05/19 Montana‐Dakota 
Utilities Co. 
30013‐351‐GR‐19 Return on Equity 
CERTIFICATIONS/ACCREDITATIONS 
Certified General Appraiser, licensed in the Commonwealth of Massachusetts and the State of New 
Hampshire 
Case No. INT-G-22-07
A. Bulkley, IGCExhibit No. 1Page 18 of 18
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 2 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 2
Page 1 of 1
X Y
Constant Growth Mean DCF 8.55%8.0
Mean Low Mean Mean High 9.67%8.0
30-Day Average 8.73%9.85%11.41%11.22%8.0
90-Day Average 8.48%9.61%11.16%Constant Growth Median DCF 8.41%6.0
180-Day Average 8.43%9.56%11.11%9.70%6.0
Constant Growth Average 8.55%9.67%11.22%10.77%6.0
Median Low Median Median High CAPM 10.34%5.0
30-Day Average 8.62%9.91%10.95%11.30%5.0
90-Day Average 8.33%9.62%10.70%ECAPM 10.95%2.0
180-Day Average 8.28%9.57%10.66%11.66%2.0
Constant Growth Average 8.41%9.70%10.77%Risk Premium 10.12%1.0
10.20%1.0
Current 30-day Average Treasury Bond Yield Near-Term Blue Chip Forecast Yield Long-Term Blue Chip Forecast Yield Low End ROE Recommendation 9.90%0.0
Value Line Beta 11.29%11.30%11.27%9.90%9.0
Bloomberg Beta 10.81%10.83%10.79%High End ROE Recommendation 10.75%0.0
Long-term Avg. Beta 10.38%10.40%10.34%10.75%9.0
Recommended ROE 10.30%4.0
Value Line Beta 11.65%11.66%11.64%
Bloomberg Beta 11.30%11.31%11.28%
Long-term Avg. Beta 10.97%10.99%10.95%
Current 30-day Average Treasury Bond Yield Near-Term Blue Chip Forecast Yield Long-Term Blue Chip Forecast Yield
Results 10.16%10.20%10.12%
SUMMARY OF ROE ANALYSES RESULTS
Constant Growth DCF
CAPM
ECAPM
Bond Yield Risk Premium
7.00% 7.50% 8.00% 8.50% 9.00% 9.50% 10.00% 10.50% 11.00% 11.50% 12.00% 12.50% 13.00%
CAPM
ECAPM
Constant Growth DCF - Mean
Constant Growth DCF - Median
Risk Premium
Recommended ROE
Recommended ROE Range
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 3 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 3
Page 1 of 3
10/31/2022
[1][2][3][4][5][6][7][8][9][10][11]
Company
Annualized
Dividend
Stock
Price
Dividend
Yield
Expected
Dividend
Yield
Value Line
Earnings
Growth
Yahoo! Finance
Earnings
Growth
Zacks
Earnings
Growth
Average
Growth
Rate Low ROE Mean ROE High ROE
Atmos Energy Corporation ATO $2.72 $104.39 2.61%2.71%7.50%8.26%7.50%7.75%10.20%10.46%10.97%New Jersey Resources Corporation NJR $1.56 $41.47 3.76%3.84%5.00%6.00%1.70%4.23%5.49%8.07%9.87%NiSource Inc.NI $0.94 $25.58 3.67%3.82%9.50%7.30%7.20%8.00%11.01%11.82%13.35%
Northwest Natural Gas Company NWN $1.94 $45.24 4.29%4.40%6.50%4.30%4.30%5.03%8.68%9.43%10.93%
ONE Gas, Inc.OGS $2.48 $74.01 3.35%3.44%6.50%5.00%5.00%5.50%8.43%8.94%9.96%
Spire, Inc.SR $2.74 $65.69 4.17%4.30%9.00%4.30%5.00%6.10%8.56%10.40%13.36%Mean 3.64%3.75%7.33%5.86%5.12%6.10%8.73%9.85%11.41%
Median 3.72%3.83%7.00%5.50%5.00%5.80%8.62%9.91%10.95%
Notes:
[1] Source: Bloomberg Professional as of October 31 2022
[2] Source: Bloomberg Professional 30-day average as ofOctober 31 2022
[3] Equals [1]/[2]
[4] Equals [3] x (1+0.5 x[8])
[5] Source: Value Line[6] Source: Yahoo! Finance[7] Source: Zacks
[8] Equals average of [5], [6], [7]
[9] Equals [3] x (1+0.5x(min([5], [6]. [7]))+(min([5], [6]. [7])
[10] Equals [4] + [8]
[11] Equals [3] x (1+0.5x(max([5], [6]. [7]))+(max([5], [6]. [7])
30-DAY CONSTANT GROWTH DCF -- INTERMOUNTAIN GAS COMPANY PROXY GROUP
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 3
Page 2 of 3
[1][2][3][4][5][6][7][8][9][10][11]
Company
Annualized
Dividend
Stock
Price
Dividend
Yield
Expected
Dividend
Yield
Value Line
Earnings
Growth
Yahoo! Finance
Earnings
Growth
Zacks
Earnings
Growth
Average
Growth
Rate Low ROE Mean ROE High ROE
Atmos Energy Corporation ATO $2.72 $111.20 2.45%2.54%7.50%8.26%7.50%7.75%10.04%10.29%10.81%New Jersey Resources Corporation NJR $1.56 $43.52 3.58%3.66%5.00%6.00%1.70%4.23%5.32%7.89%9.69%NiSource Inc.NI $0.94 $28.11 3.34%3.48%9.50%7.30%7.20%8.00%10.66%11.48%13.00%
Northwest Natural Gas Company NWN $1.94 $48.98 3.96%4.06%6.50%4.30%4.30%5.03%8.35%9.09%10.59%
ONE Gas, Inc.OGS $2.48 $78.57 3.16%3.24%6.50%5.00%5.00%5.50%8.24%8.74%9.76%
Spire, Inc.SR $2.74 $69.78 3.93%4.05%9.00%4.30%5.00%6.10%8.31%10.15%13.10%
Mean 3.40%3.50%7.33%5.86%5.12%6.10%8.48%9.61%11.16%Median 3.46%3.57%7.00%5.50%5.00%5.80%8.33%9.62%10.70%
Notes:[1] Source: Bloomberg Professional as of October 31 2022[2] Source: Bloomberg Professional 90-day average as of October 31 2022
[3] Equals [1]/[2]
[4] Equals [3] x (1+0.5 x[8])
[5] Source: Value Line
[6] Source: Yahoo! Finance
[7] Source: Zacks[8] Equals average of [5], [6], [7]
[9] Equals [3] x (1+0.5x(min([5], [6]. [7]))+(min([5], [6]. [7])
[10] Equals [4] + [8]
[11] Equals [3] x (1+0.5x(max([5], [6]. [7]))+(max([5], [6]. [7])
90-DAY CONSTANT GROWTH DCF -- INTERMOUNTAIN GAS COMPANY PROXY GROUP
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 3
Page 3 of 3
[1][2][3][4][5][6][7][8][9][10][11]
Company
Annualized
Dividend
Stock
Price
Dividend
Yield
Expected
Dividend
Yield
Value Line
Earnings
Growth
Yahoo! Finance
Earnings
Growth
Zacks
Earnings
Growth
Average
Growth
Rate Low ROE Mean ROE High ROE
Atmos Energy Corporation ATO $2.72 $112.00 2.43%2.52%7.50%8.26%7.50%7.75%10.02%10.28%10.79%New Jersey Resources Corporation NJR $1.56 $43.57 3.58%3.66%5.00%6.00%1.70%4.23%5.31%7.89%9.69%NiSource Inc.NI $0.94 $28.80 3.26%3.39%9.50%7.30%7.20%8.00%10.58%11.39%12.92%
Northwest Natural Gas Company NWN $1.94 $49.70 3.90%4.00%6.50%4.30%4.30%5.03%8.29%9.04%10.53%
ONE Gas, Inc.OGS $2.48 $81.21 3.05%3.14%6.50%5.00%5.00%5.50%8.13%8.64%9.65%
Spire, Inc.SR $2.74 $70.39 3.89%4.01%9.00%4.30%5.00%6.10%8.28%10.11%13.07%
Mean 3.35%3.45%7.33%5.86%5.12%6.10%8.43%9.56%11.11%Median 3.42%3.53%7.00%5.50%5.00%5.80%8.28%9.57%10.66%
Notes:[1] Source: Bloomberg Professional as of October 31 2022[2] Source: Bloomberg Professional 180-day average as of October 31 2022
[3] Equals [1]/[2]
[4] Equals [3] x (1+0.5 x[8])
[5] Source: Value Line
[6] Source: Yahoo! Finance
[7] Source: Zacks[8] Equals average of [5], [6], [7]
[9] Equals [3] x (1+0.5x(min([5], [6]. [7]))+(min([5], [6]. [7])
[10] Equals [4] + [8]
[11] Equals [3] x (1+0.5x(max([5], [6]. [7]))+(max([5], [6]. [7])
180-DAY CONSTANT GROWTH DCF -- INTERMOUNTAIN GAS COMPANY PROXY GROUP
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 4 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 4
Page 1 of 3
[1][2][3][4][5][6]
Company Ticker
Current 30-day average of 30-year U.S. Treasury bond
yield Beta (β)
Market Return
(Rm)
Market Risk Premium
(Rm −
CAPM
ROE (K)
ECAPM
ROE (K)
Atmos Energy Corporation ATO 3.92%0.80 12.76%8.84%10.99%11.43%
New Jersey Resources Corporation NJR 3.92%0.95 12.76%8.84%12.32%12.43%
NiSource Inc.NI 3.92%0.85 12.76%8.84%11.43%11.76%
Northwest Natural Gas Company NWN 3.92%0.80 12.76%8.84%10.99%11.43%
ONE Gas, Inc.OGS 3.92%0.80 12.76%8.84%10.99%11.43%
Spire, Inc.SR 3.92%0.80 12.76%8.84%10.99%11.43%
Mean 11.29%11.65%
Median 10.99%11.43%
Notes:[1] Source: Bloomberg Professional 30-day average as of October 31 2022
[2] Source: Value Line
[3] Source: Exhibit No. 6
[4] Equals [3]-[1]
[5] Equals [1] + [2] x [4]
[6] Equals [1] + 0.25 x ([4]) + 0.75 x ([2] x [4])
[1][2][3][4][5][6]
Company Ticker
Near-term projected 30-year U.S. Treasury bond yield (Q1 2023 - Q1 2024)Beta (β)
Market Return (Rm)
Market
Risk Premium (Rm − Rf)CAPM ROE (K)ECAPM ROE (K)
Atmos Energy Corporation ATO 4.00%0.80 12.76%8.76%11.01%11.45%
New Jersey Resources Corporation NJR 4.00%0.95 12.76%8.76%12.32%12.43%
NiSource Inc.NI 4.00%0.85 12.76%8.76%11.45%11.77%
Northwest Natural Gas Company NWN 4.00%0.80 12.76%8.76%11.01%11.45%
ONE Gas, Inc.OGS 4.00%0.80 12.76%8.76%11.01%11.45%
Spire, Inc.SR 4.00%0.80 12.76%8.76%11.01%11.45%
Mean 11.30%11.66%
Median 11.01%11.45%
Notes:[1] Source: Blue Chip Financial Forecasts, Vol. 41, No. 11, November 1, 2022, at 2
[2] Source: Value Line
[3] Source: Exhibit No. 6
[4] Equals [3]-[1]
[5] Equals [1] + [2] x [4]
[6] Equals [1] + 0.25 x ([4]) + 0.75 x ([2] x [4])
[1][2][3][4][5][6]
Company Ticker
Projected 30-year U.S. Treasury bond yield (2024 - 2028)Beta (β)
Market Return (Rm)
Market Risk
Premium (Rm − Rf)CAPM ROE (K)ECAPM ROE (K)
Atmos Energy Corporation ATO 3.80%0.80 12.76%8.96%10.97%11.42%
New Jersey Resources Corporation NJR 3.80%0.95 12.76%8.96%12.31%12.42%
NiSource Inc.NI 3.80%0.85 12.76%8.96%11.42%11.75%
Northwest Natural Gas Company NWN 3.80%0.80 12.76%8.96%10.97%11.42%
ONE Gas, Inc.OGS 3.80%0.80 12.76%8.96%10.97%11.42%
Spire, Inc.SR 3.80%0.80 12.76%8.96%10.97%11.42%
Mean 11.27%11.64%Median 10.97%11.42%
Notes:
[1] Source: Blue Chip Financial Forecasts, Vol. 41, No. 6, June 1, 2022, at 14[2] Source: Value Line
[3] Source: Exhibit No. 6
[4] Equals [3]-[1]
[5] Equals [1] + [2] x [4]
[6] Equals [1] + 0.25 x ([4]) + 0.75 x ([2] x [4])
CAPITAL ASSET PRICING MODEL- CURRENT RISK FREE RATE AND VALUE LINE BETA
CAPITAL ASSET PRICING MODEL- NEAR TERM PROJECTED RISK-FREE RATE AND VALUE LINE BETA
CAPITAL ASSET PRICING MODEL- LONG-TERM PROJECTED RISK-FREE RATE AND VALUE LINE BETA
K = Rf + β (Rm − Rf)
K = Rf + β (Rm − Rf)
K = Rf + β (Rm − Rf)
K = Rf + 0.25 x (Rm - Rf) + 0.75 x β x (Rm − Rf)
K = Rf + 0.25 x (Rm - Rf) + 0.75 x β x (Rm − Rf)
K = Rf + 0.25 x (Rm - Rf) + 0.75 x β x (Rm − Rf)
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 4
Page 2 of 3
[1][2][3][4][5][6]
Company Ticker
Current 30-day average of 30-year
U.S. Treasury bond yield Beta (β)
Market
Return (Rm)
Market Risk
Premium (Rm − CAPM ROE (K)ECAPM ROE (K)
Atmos Energy Corporation ATO 3.92%0.77 12.76%8.84%10.71%11.22%
New Jersey Resources Corporation NJR 3.92%0.81 12.76%8.84%11.10%11.52%
NiSource Inc.NI 3.92%0.83 12.76%8.84%11.26%11.64%
Northwest Natural Gas Company NWN 3.92%0.70 12.76%8.84%10.13%10.78%
ONE Gas, Inc.OGS 3.92%0.80 12.76%8.84%11.00%11.44%
Spire, Inc.SR 3.92%0.76 12.76%8.84%10.67%11.20%
Mean 10.81%11.30%
Median 10.85%11.33%
Notes:[1] Source: Bloomberg Professional 30-day average as of October 31 2022
[2] Source: Bloomberg Professional
[3] Source: Exhibit No. 6
[4] Equals [3]-[1]
[5] Equals [1] + [2] x [4]
[6] Equals [1] + 0.25 x ([4]) + 0.75 x ([2] x [4])
[1][2][3][4][5][6]
Company Ticker
Near-term projected 30-year U.S. Treasury
bond yield (Q1 2023 - Q1 2024)Beta (β)
Market
Return (Rm)
Market Risk Premium
(Rm − Rf)CAPM ROE (K)ECAPM ROE (K)
Atmos Energy Corporation ATO 4.00%0.77 12.76%8.76%10.73%11.24%
New Jersey Resources Corporation NJR 4.00%0.81 12.76%8.76%11.12%11.53%
NiSource Inc.NI 4.00%0.83 12.76%8.76%11.28%11.65%
Northwest Natural Gas Company NWN 4.00%0.70 12.76%8.76%10.15%10.80%
ONE Gas, Inc.OGS 4.00%0.80 12.76%8.76%11.01%11.45%
Spire, Inc.SR 4.00%0.76 12.76%8.76%10.69%11.21%
Mean 10.83%11.31%
Median 10.87%11.34%
Notes:[1] Source: Blue Chip Financial Forecasts, Vol. 41, No. 11, November 1, 2022, at 2
[2] Source: Bloomberg Professional
[3] Source: Exhibit No. 6
[4] Equals [3]-[1]
[5] Equals [1] + [2] x [4]
[6] Equals [1] + 0.25 x ([4]) + 0.75 x ([2] x [4])
[1][2][3][4][5][6]
Company Ticker
Projected 30-year U.S. Treasury bond yield (2024 - 2028)Beta (β)
Market Return (Rm)
Market Risk
Premium (Rm − Rf)CAPM ROE (K)ECAPM ROE (K)
Atmos Energy Corporation ATO 3.80%0.77 12.76%8.96%10.69%11.20%
New Jersey Resources Corporation NJR 3.80%0.81 12.76%8.96%11.08%11.50%
NiSource Inc.NI 3.80%0.83 12.76%8.96%11.24%11.62%
Northwest Natural Gas Company NWN 3.80%0.70 12.76%8.96%10.09%10.76%
ONE Gas, Inc.OGS 3.80%0.80 12.76%8.96%10.97%11.42%
Spire, Inc.SR 3.80%0.76 12.76%8.96%10.65%11.17%
Mean 10.79%11.28%Median 10.83%11.31%
Notes:
[1] Source: Blue Chip Financial Forecasts, Vol. 41, No. 6, June 1, 2022, at 14[2] Source: Bloomberg Professional
[3] Source: Exhibit No. 6
[4] Equals [3]-[1]
[5] Equals [1] + [2] x [4]
[6] Equals [1] + 0.25 x ([4]) + 0.75 x ([2] x [4])
CAPITAL ASSET PRICING MODEL- CURRENT RISK FREE RATE AND BLOOMBERG BETA
CAPITAL ASSET PRICING MODEL- NEAR TERM PROJECTED RISK-FREE RATE AND BLOOMBERG BETA
K = Rf + 0.25 x (Rm - Rf) + 0.75 x β x (Rm − Rf)
K = Rf + β (Rm − Rf)
K = Rf + β (Rm − Rf)
K = Rf + β (Rm − Rf)
K = Rf + 0.25 x (Rm - Rf) + 0.75 x β x (Rm − Rf)
K = Rf + 0.25 x (Rm - Rf) + 0.75 x β x (Rm − Rf)
CAPITAL ASSET PRICING MODEL- LONG-TERM PROJECTED RISK-FREE RATE AND BLOOMBERG BETA
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 4
Page 3 of 3
[1][2][3][4][5][6]
Company Ticker
Current 30-day average of 30-year
U.S. Treasury bond yield Beta (β)
Market
Return (Rm)
Market Risk Premium
(Rm − Rf)CAPM ROE (K)ECAPM ROE (K)
Atmos Energy Corporation ATO 3.92%0.73 12.76%8.84%10.40%10.99%
New Jersey Resources Corporation NJR 3.92%0.81 12.76%8.84%11.04%11.47%
NiSource Inc.NI 3.92%0.72 12.76%8.84%10.30%10.91%
Northwest Natural Gas Company NWN 3.92%0.69 12.76%8.84%10.01%10.70%
ONE Gas, Inc.OGS 3.92%0.72 12.76%8.84%10.25%10.88%
Spire, Inc.SR 3.92%0.72 12.76%8.84%10.25%10.88%
Mean 10.38%10.97%
Median 10.27%10.90%
Notes:
[1] Source: Bloomberg Professional 30-day average as of October 31 2022
[2] Source: Exhibit No. 5
[3] Source: Exhibit No. 6
[4] Equals [3]-[1]
[5] Equals [1] + [2] x [4]
[6] Equals [1] + 0.25 x ([4]) + 0.75 x ([2] x [4])
[1][2][3][4][5][6]
Company Ticker
Near-term projected 30-year U.S. Treasury bond yield (Q1 2023 - Q1 2024)Beta (β)
Market Return (Rm)
Market Risk Premium (Rm − Rf)CAPM ROE (K)ECAPM ROE (K)
Atmos Energy Corporation ATO 4.00%0.73 12.76%8.76%10.42%11.01%
New Jersey Resources Corporation NJR 4.00%0.81 12.76%8.76%11.06%11.48%
NiSource Inc.NI 4.00%0.72 12.76%8.76%10.32%10.93%
Northwest Natural Gas Company NWN 4.00%0.69 12.76%8.76%10.03%10.72%
ONE Gas, Inc.OGS 4.00%0.72 12.76%8.76%10.28%10.90%
Spire, Inc.SR 4.00%0.72 12.76%8.76%10.28%10.90%
Mean 10.40%10.99%
Median 10.30%10.91%
Notes:
[1] Source: Blue Chip Financial Forecasts, Vol. 41, No. 11, November 1, 2022, at 2
[2] Source: Exhibit No. 5
[3] Source: Exhibit No. 6
[4] Equals [3]-[1]
[5] Equals [1] + [2] x [4]
[6] Equals [1] + 0.25 x ([4]) + 0.75 x ([2] x [4])
[1][2][3][4][5][6]
Company Ticker
Projected 30-year U.S. Treasury bond yield (2024 - 2028)Beta (β)
Market Return (Rm)
Market
Risk Premium (Rm − CAPM ROE (K)ECAPM ROE (K)
Atmos Energy Corporation ATO 3.80%0.73 12.76%8.96%10.37%10.97%
New Jersey Resources Corporation NJR 3.80%0.81 12.76%8.96%11.02%11.45%
NiSource Inc.NI 3.80%0.72 12.76%8.96%10.26%10.89%
Northwest Natural Gas Company NWN 3.80%0.69 12.76%8.96%9.97%10.67%
ONE Gas, Inc.OGS 3.80%0.72 12.76%8.96%10.22%10.86%
Spire, Inc.SR 3.80%0.72 12.76%8.96%10.22%10.86%
Mean 10.34%10.95%Median 10.24%10.87%
Notes:
[1] Source: Blue Chip Financial Forecasts, Vol. 41, No. 6, June 1, 2022, at 14[2] Source: Exhibit No. 5
[3] Source: Exhibit No. 6
[4] Equals [3]-[1]
[5] Equals [1] + [2] x [4]
[6] Equals [1] + 0.25 x ([4]) + 0.75 x ([2] x [4])
K = Rf + β (Rm − Rf)
K = Rf + 0.25 x (Rm - Rf) + 0.75 x β x (Rm − Rf)
K = Rf + 0.25 x (Rm - Rf) + 0.75 x β x (Rm − Rf)
K = Rf + 0.25 x (Rm - Rf) + 0.75 x β x (Rm − Rf)
CAPITAL ASSET PRICING MODEL- CURRENT RISK FREE RATE AND LONG-TERM BETA
CAPITAL ASSET PRICING MODEL- NEAR TERM PROJECTED RISK FREE RATE AND LONG-TERM BETA
CAPITAL ASSET PRICING MODEL- LONG TERM PROJECTED RISK FREE RATE AND LONG-TERM BETA
K = Rf + β (Rm − Rf)
K = Rf + β (Rm − Rf)
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 5 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 5
Page 1 of 1
[1][2][3][4][5][6][7][8][9][10]
Company Ticker 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 Average
Atmos Energy Corporation ATO 0.80 0.80 0.80 0.70 0.70 0.60 0.60 0.80 0.80 0.73
New Jersey Resources Corporation NJR 0.7 0.8 0.8 0.80 0.80 0.70 0.70 0.95 1.00 0.81
NiSource Inc.NI 0.85 0.85 NMF NMF 0.60 0.50 0.55 0.85 0.85 0.72
Northwest Natural Gas Company NWN 0.65 0.7 0.65 0.65 0.70 0.60 0.60 0.80 0.85 0.69
ONE Gas, Inc.OGS NA NA NA 0.70 0.70 0.65 0.65 0.80 0.80 0.72
Spire, Inc.SR 0.65 0.7 0.7 0.70 0.70 0.65 0.65 0.85 0.85 0.72
Mean 0.73 0.77 0.74 0.71 0.70 0.62 0.63 0.84 0.86 0.73
Notes:
[1] Value Line, dated December 26, 2013.
[2] Value Line, dated December 31, 2014.
[3] Value Line, dated December 30, 2015.
[4] Value Line, dated December 29, 2016.
[5] Value Line, dated December 28, 2017.
[6] Value Line, dated December 27, 2018.
[7] Value Line, dated December 26, 2019.
[8] Value Line, dated December 30, 2020.
[9] Value Line, dated December 29, 2021.
[10] Average ([1] - [9])
HISTORICAL BETA - 2013 - 2021
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 6 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 6
Page 1 of 6
[1] Estimate of the S&P 500 Dividend Yield
[2] Estimate of the S&P 500 Growth Rate
[3] S&P 500 Estimated Required Market Return
[4][5][6][7][8][9][10][11]
Value Line Cap-Weighted
Shares Market Weight in Estimated Cap-Weighted Long-Term Long-Term
Name Ticker Outst'g Price Capitalization Index Dividend Yield Dividend Yield Growth Est.Growth Est.
LyondellBasell Industries NV LYB 325.62 76.45 24,894 0.09%6.23%0.01%3.50%0.00%
Signature Bank/New York NY SBNY 62.93 158.53 9,976 0.04%1.41%0.00%16.50%0.01%
American Express Co AXP 747.23 148.45 110,927 0.41%1.40%0.01%10.00%0.04%
Verizon Communications Inc VZ 4,199.82 37.37 156,947 0.58%6.98%0.04%2.50%0.01%
Broadcom Inc AVGO 405.01 470.12 190,402 3.49%29.50%
Boeing Co/The BA 595.98 142.51 84,934
Caterpillar Inc CAT 527.91 216.46 114,271 0.42%2.22%0.01%8.00%0.03%
JPMorgan Chase & Co JPM 2,932.57 125.88 369,152 1.36%3.18%0.04%5.00%0.07%
Chevron Corp CVX 1,957.44 180.90 354,100 3.14%44.00%
Coca-Cola Co/The KO 4,324.51 59.85 258,822 0.95%2.94%0.03%7.50%0.07%
AbbVie Inc ABBV 1,768.10 146.40 258,849 0.95%4.04%0.04%4.50%0.04%
Walt Disney Co/The DIS 1,823.06 106.54 194,229 30.50%
FleetCor Technologies Inc FLT 75.01 186.12 13,961 0.05%10.50%0.01%
Extra Space Storage Inc EXR 133.91 177.44 23,761 0.09%3.38%0.00%4.00%0.00%
Exxon Mobil Corp XOM 4,118.00 110.81 456,316 3.28%
Phillips 66 PSX 481.05 104.29 50,169 3.72%85.00%
General Electric Co GE 1,092.67 77.81 85,020 0.41%22.00%
HP Inc HPQ 1,005.94 27.62 27,784 0.10%3.62%0.00%12.50%0.01%
Home Depot Inc/The HD 1,023.73 296.13 303,156 1.12%2.57%0.03%9.00%0.10%
Monolithic Power Systems Inc MPWR 46.94 339.45 15,934 0.88%23.50%
International Business Machines Corp IBM 904.13 138.29 125,032 0.46%4.77%0.02%3.00%0.01%
Johnson & Johnson JNJ 2,614.48 173.97 454,842 1.67%2.60%0.04%8.00%0.13%
McDonald's Corp MCD 735.72 272.66 200,601 0.74%2.23%0.02%10.50%0.08%
Merck & Co Inc MRK 2,533.28 101.20 256,368 0.94%2.73%0.03%8.00%0.08%
3M Co MMM 552.74 125.79 69,530 0.26%4.74%0.01%6.50%0.02%
American Water Works Co Inc AWK 181.83 145.34 26,427 0.10%1.80%0.00%3.00%0.00%
Bank of America Corp BAC 8,022.43 36.04 289,128 1.06%2.44%0.03%8.50%0.09%
Pfizer Inc PFE 5,612.35 46.55 261,255 0.96%3.44%0.03%6.50%0.06%
Procter & Gamble Co/The PG 2,369.70 134.67 319,127 1.17%2.71%0.03%6.50%0.08%
AT&T Inc T 7,126.00 18.23 129,907 0.48%6.09%0.03%0.50%0.00%
Travelers Cos Inc/The TRV 234.35 184.46 43,228 0.16%2.02%0.00%6.50%0.01%
Raytheon Technologies Corp RTX 1,470.06 94.82 139,391 0.51%2.32%0.01%7.00%0.04%
Analog Devices Inc ADI 514.34 142.62 73,355 0.27%2.13%0.01%14.00%0.04%
Walmart Inc WMT 2,714.24 142.33 386,317 1.42%1.57%0.02%7.50%0.11%
Cisco Systems Inc CSCO 4,105.97 45.43 186,534 0.69%3.35%0.02%8.00%0.05%
Intel Corp INTC 4,127.00 28.43 117,331 0.43%5.14%0.02%2.50%0.01%
General Motors Co GM 1,420.70 39.25 55,762 0.21%0.92%0.00%10.00%0.02%
Microsoft Corp MSFT 7,454.47 232.13 1,730,407 6.37%1.17%0.07%16.50%1.05%
Dollar General Corp DG 225.57 255.05 57,532 0.21%0.86%0.00%10.00%0.02%
Cigna Corp CI 305.12 323.06 98,571 0.36%1.39%0.01%10.00%0.04%
Kinder Morgan Inc KMI 2,247.74 18.12 40,729 0.15%6.13%0.01%19.00%0.03%
Citigroup Inc C 1,936.90 45.86 88,826 0.33%4.45%0.01%3.50%0.01%
American International Group Inc AIG 760.42 57.00 43,344 0.16%2.25%0.00%6.50%0.01%
Altria Group Inc MO 1,792.17 46.27 82,924 0.31%8.13%0.02%5.50%0.02%
HCA Healthcare Inc HCA 287.03 217.47 62,419 0.23%1.03%0.00%12.50%0.03%
International Paper Co IP 355.67 33.61 11,954 0.04%5.50%0.00%12.50%0.01%
Hewlett Packard Enterprise Co HPE 1,286.70 14.27 18,361 0.07%3.36%0.00%7.50%0.01%
Abbott Laboratories ABT 1,751.22 98.94 173,266 0.64%1.90%0.01%8.00%0.05%
Aflac Inc AFL 631.92 65.11 41,144 0.15%2.46%0.00%9.00%0.01%
Air Products and Chemicals Inc APD 221.80 250.40 55,538 0.20%2.59%0.01%11.00%0.02%
Royal Caribbean Cruises Ltd RCL 255.06 53.38 13,615
Hess Corp HES 309.62 141.08 43,680 1.06%
Archer-Daniels-Midland Co ADM 549.33 96.98 53,274 0.20%1.65%0.00%13.00%0.03%
Automatic Data Processing Inc ADP 415.20 241.70 100,354 0.37%1.72%0.01%10.00%0.04%
Verisk Analytics Inc VRSK 156.96 182.83 28,697 0.11%0.68%0.00%10.50%0.01%
AutoZone Inc AZO 18.98 2,532.88 48,077 0.18%14.50%0.03%
Avery Dennison Corp AVY 81.26 169.55 13,777 0.05%1.77%0.00%12.00%0.01%
Enphase Energy Inc ENPH 135.92 307.00 41,729 26.50%
MSCI Inc MSCI 79.96 468.86 37,489 0.14%1.07%0.00%15.50%0.02%
Ball Corp BALL 314.31 49.39 15,524 1.62%21.50%
Ceridian HCM Holding Inc CDAY 153.06 66.19 10,131
Carrier Global Corp CARR 836.26 39.76 33,250 1.51%
Bank of New York Mellon Corp/The BK 808.10 42.11 34,029 0.13%3.51%0.00%6.00%0.01%
Otis Worldwide Corp OTIS 416.59 70.64 29,428 1.64%
Baxter International Inc BAX 504.12 54.35 27,399 0.10%2.13%0.00%10.00%0.01%
Becton Dickinson and Co BDX 285.20 235.97 67,297 0.25%1.47%0.00%4.50%0.01%
Berkshire Hathaway Inc BRK/B 1,301.13 295.09 383,949 1.41%6.00%0.08%
Best Buy Co Inc BBY 225.13 68.41 15,401 0.06%5.15%0.00%4.00%0.00%
Boston Scientific Corp BSX 1,431.61 43.11 61,717 0.23%16.00%0.04%
Bristol-Myers Squibb Co BMY 2,126.16 77.47 164,714 2.79%
Fortune Brands Home & Security Inc FBHS 128.24 60.32 7,736 0.03%1.86%0.00%10.00%0.00%
Brown-Forman Corp BF/B 309.92 68.00 21,075 0.08%1.11%0.00%14.00%0.01%
Coterra Energy Inc CTRA 795.60 31.13 24,767 8.35%
Campbell Soup Co CPB 299.76 52.91 15,860 0.06%2.80%0.00%5.00%0.00%
Hilton Worldwide Holdings Inc HLT 270.46 135.26 36,582 0.44%
Carnival Corp CCL 1,112.71 9.06 10,081
Qorvo Inc QRVO 103.20 86.08 8,884 0.03%14.50%0.00%
Lumen Technologies Inc LUMN 1,035.34 7.36 7,620 0.03%13.59%0.00%3.50%0.00%
UDR Inc UDR 325.54 39.76 12,944 0.05%3.82%0.00%10.50%0.01%
Clorox Co/The CLX 123.36 146.04 18,015 0.07%3.23%0.00%7.50%0.00%
Paycom Software Inc PAYC 60.03 346.00 20,769 21.00%
CMS Energy Corp CMS 290.25 57.05 16,559 0.06%3.23%0.00%6.50%0.00%
Newell Brands Inc NWL 413.60 13.81 5,712 6.66%
Colgate-Palmolive Co CL 835.21 73.84 61,672 0.23%2.55%0.01%6.50%0.01%
EPAM Systems Inc EPAM 57.37 350.00 20,078 20.50%
1.84%
10.82%
12.76%
MARKET RISK PREMIUM DERIVED FROM S&P 500 INDEX
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 6
Page 2 of 6
[4][5][6][7][8][9][10][11]
Value Line Cap-Weighted
Shares Market Weight in Estimated Cap-Weighted Long-Term Long-Term
Name Ticker Outst'g Price Capitalization Index Dividend Yield Dividend Yield Growth Est.Growth Est.
Comerica Inc CMA 130.95 70.50 9,232 0.03%3.86%0.00%9.00%0.00%
Conagra Brands Inc CAG 479.26 36.70 17,589 0.06%3.60%0.00%4.00%0.00%
Consolidated Edison Inc ED 354.58 87.96 31,189 0.11%3.59%0.00%4.00%0.00%
Corning Inc GLW 845.81 32.17 27,210 0.10%3.36%0.00%17.50%0.02%
Cummins Inc CMI 140.99 244.51 34,474 0.13%2.57%0.00%8.50%0.01%
Caesars Entertainment Inc CZR 214.42 43.73 9,376
Danaher Corp DHR 727.96 251.67 183,206 0.67%0.40%0.00%17.00%0.11%
Target Corp TGT 460.26 164.25 75,598 0.28%2.63%0.01%12.00%0.03%
Deere & Co DE 301.82 395.82 119,466 0.44%1.14%0.01%15.00%0.07%
Dominion Energy Inc D 832.50 69.97 58,250 0.21%3.82%0.01%5.00%0.01%
Dover Corp DOV 140.35 130.69 18,343 0.07%1.55%0.00%9.00%0.01%
Alliant Energy Corp LNT 250.93 52.17 13,091 0.05%3.28%0.00%6.00%0.00%
Duke Energy Corp DUK 770.00 93.18 71,749 0.26%4.31%0.01%5.00%0.01%
Regency Centers Corp REG 171.12 60.51 10,354 0.04%4.13%0.00%12.50%0.00%
Eaton Corp PLC ETN 398.30 150.07 59,773 0.22%2.16%0.00%12.00%0.03%
Ecolab Inc ECL 284.99 157.07 44,763 0.16%1.30%0.00%10.50%0.02%
PerkinElmer Inc PKI 126.22 133.58 16,861 0.06%0.21%0.00%4.00%0.00%
Emerson Electric Co EMR 591.30 86.60 51,207 0.19%2.40%0.00%10.50%0.02%
EOG Resources Inc EOG 586.05 136.52 80,007 0.29%2.20%0.01%18.00%0.05%
Aon PLC AON 206.85 281.49 58,227 0.21%0.80%0.00%7.50%0.02%
Entergy Corp ETR 203.42 107.14 21,794 0.08%3.99%0.00%4.00%0.00%
Equifax Inc EFX 122.44 169.54 20,759 0.08%0.92%0.00%10.00%0.01%
EQT Corp EQT 367.05 41.84 15,357 1.43%
IQVIA Holdings Inc IQV 185.74 209.67 38,944 0.14%14.50%0.02%
Gartner Inc IT 79.09 301.92 23,880 0.09%15.50%0.01%
FedEx Corp FDX 260.22 160.28 41,708 0.15%2.87%0.00%13.00%0.02%
FMC Corp FMC 125.96 118.90 14,977 0.06%1.78%0.00%11.00%0.01%
Brown & Brown Inc BRO 282.45 58.79 16,605 0.06%0.78%0.00%8.00%0.00%
Ford Motor Co F 3,949.64 13.37 52,807 4.49%33.50%
NextEra Energy Inc NEE 1,964.78 77.50 152,270 0.56%2.19%0.01%10.00%0.06%
Franklin Resources Inc BEN 498.36 23.45 11,686 0.04%4.95%0.00%4.00%0.00%
Garmin Ltd GRMN 191.66 88.04 16,874 0.06%3.32%0.00%6.00%0.00%
Freeport-McMoRan Inc FCX 1,429.27 31.69 45,294 1.89%27.00%
Dexcom Inc DXCM 386.26 120.78 46,652
General Dynamics Corp GD 274.55 249.80 68,582 0.25%2.02%0.01%8.50%0.02%
General Mills Inc GIS 593.54 81.58 48,421 0.18%2.65%0.00%3.50%0.01%
Genuine Parts Co GPC 141.16 177.86 25,107 0.09%2.01%0.00%9.00%0.01%
Atmos Energy Corp ATO 139.89 106.55 14,905 0.05%2.55%0.00%7.50%0.00%
WW Grainger Inc GWW 50.53 584.35 29,527 0.11%1.18%0.00%9.50%0.01%
Halliburton Co HAL 908.05 36.42 33,071 1.32%31.00%
L3Harris Technologies Inc LHX 191.35 246.47 47,163 0.17%1.82%0.00%18.00%0.03%
Healthpeak Properties Inc PEAK 539.58 23.73 12,804 0.05%5.06%0.00%17.00%0.01%
Catalent Inc CTLT 179.90 65.73 11,825 21.00%
Fortive Corp FTV 353.81 63.90 22,608 0.08%0.44%0.00%12.00%0.01%
Hershey Co/The HSY 146.87 238.77 35,068 0.13%1.74%0.00%9.00%0.01%
Synchrony Financial SYF 450.54 35.56 16,021 0.06%2.59%0.00%9.50%0.01%
Hormel Foods Corp HRL 546.20 46.45 25,371 0.09%2.24%0.00%6.50%0.01%
Arthur J Gallagher & Co AJG 210.80 187.08 39,436 0.15%1.09%0.00%18.50%0.03%
Mondelez International Inc MDLZ 1,370.57 61.48 84,262 0.31%2.50%0.01%9.50%0.03%
CenterPoint Energy Inc CNP 629.43 28.61 18,008 0.07%2.52%0.00%6.50%0.00%
Humana Inc HUM 126.55 558.08 70,627 0.26%0.56%0.00%11.00%0.03%
Willis Towers Watson PLC WTW 108.24 218.21 23,619 0.09%1.50%0.00%8.50%0.01%
Illinois Tool Works Inc ITW 307.19 213.53 65,593 0.24%2.45%0.01%11.00%0.03%
CDW Corp/DE CDW 135.24 172.81 23,371 0.09%1.16%0.00%8.50%0.01%
Trane Technologies PLC TT 231.72 159.63 36,989 1.68%
Interpublic Group of Cos Inc/The IPG 388.53 29.79 11,574 0.04%3.89%0.00%10.00%0.00%
International Flavors & Fragrances Inc IFF 254.95 97.61 24,885 0.09%3.32%0.00%7.50%0.01%
Generac Holdings Inc GNRC 63.83 115.91 7,399 23.50%
NXP Semiconductors NV NXPI 262.60 146.08 38,360 0.14%2.31%0.00%12.00%0.02%
Kellogg Co K 340.11 76.82 26,127 0.10%3.07%0.00%3.50%0.00%
Broadridge Financial Solutions Inc BR 117.65 150.06 17,654 0.06%1.93%0.00%9.00%0.01%
Kimberly-Clark Corp KMB 337.49 124.46 42,004 0.15%3.73%0.01%5.50%0.01%
Kimco Realty Corp KIM 618.46 21.38 13,223 0.05%4.30%0.00%8.50%0.00%
Oracle Corp ORCL 2,696.17 78.07 210,490 0.77%1.64%0.01%10.00%0.08%
Kroger Co/The KR 715.81 47.29 33,850 0.12%2.20%0.00%6.50%0.01%
Lennar Corp LEN 254.77 80.70 20,560 0.08%1.86%0.00%9.00%0.01%
Eli Lilly & Co LLY 950.18 362.09 344,049 1.27%1.08%0.01%11.50%0.15%
Bath & Body Works Inc BBWI 228.37 33.38 7,623 2.40%26.50%
Charter Communications Inc CHTR 155.67 367.62 57,228 22.50%
Lincoln National Corp LNC 170.23 53.87 9,170 0.03%3.34%0.00%11.50%0.00%
Loews Corp L 237.43 57.02 13,538 0.05%0.44%0.00%18.50%0.01%
Lowe's Cos Inc LOW 620.70 194.95 121,006 0.45%2.15%0.01%12.50%0.06%
IDEX Corp IEX 75.42 222.31 16,767 0.06%1.08%0.00%11.00%0.01%
Marsh & McLennan Cos Inc MMC 496.01 161.49 80,101 0.29%1.46%0.00%11.00%0.03%
Masco Corp MAS 225.53 46.27 10,435 0.04%2.42%0.00%8.50%0.00%
S&P Global Inc SPGI 325.80 321.25 104,663 0.39%1.06%0.00%9.50%0.04%
Medtronic PLC MDT 1,329.15 87.34 116,088 0.43%3.11%0.01%9.00%0.04%
Viatris Inc VTRS 1,212.67 10.13 12,284 4.74%
CVS Health Corp CVS 1,312.83 94.70 124,325 0.46%2.32%0.01%6.00%0.03%
DuPont de Nemours Inc DD 500.90 57.20 28,652 0.11%2.31%0.00%10.00%0.01%
Micron Technology Inc MU 1,087.17 54.10 58,816 0.22%0.85%0.00%16.00%0.03%
Motorola Solutions Inc MSI 166.89 249.71 41,673 0.15%1.27%0.00%8.00%0.01%
Cboe Global Markets Inc CBOE 106.06 124.50 13,205 0.05%1.61%0.00%10.00%0.00%
Laboratory Corp of America Holdings LH 90.40 221.86 20,056 0.07%1.30%0.00%1.50%0.00%
Newmont Corp NEM 793.68 42.32 33,589 0.12%5.20%0.01%9.50%0.01%
NIKE Inc NKE 1,259.69 92.68 116,748 1.32%24.00%
NiSource Inc NI 405.95 25.69 10,429 0.04%3.66%0.00%9.50%0.00%
Norfolk Southern Corp NSC 231.51 228.07 52,801 0.19%2.17%0.00%10.00%0.02%
Principal Financial Group Inc PFG 249.24 88.13 21,965 0.08%2.90%0.00%6.00%0.00%
Eversource Energy ES 346.44 76.28 26,427 0.10%3.34%0.00%6.50%0.01%
Northrop Grumman Corp NOC 153.91 549.01 84,499 0.31%1.26%0.00%6.50%0.02%
Wells Fargo & Co WFC 3,793.05 45.99 174,442 0.64%2.61%0.02%12.00%0.08%
Nucor Corp NUE 261.79 131.38 34,393 1.52%-0.50%
Occidental Petroleum Corp OXY 931.49 72.60 67,626 0.72%
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 6
Page 3 of 6
[4][5][6][7][8][9][10][11]
Value Line Cap-Weighted
Shares Market Weight in Estimated Cap-Weighted Long-Term Long-Term
Name Ticker Outst'g Price Capitalization Index Dividend Yield Dividend Yield Growth Est.Growth Est.
Omnicom Group Inc OMC 203.92 72.75 14,835 0.05%3.85%0.00%6.50%0.00%
ONEOK Inc OKE 446.86 59.32 26,508 0.10%6.30%0.01%11.50%0.01%
Raymond James Financial Inc RJF 215.10 118.14 25,412 0.09%1.15%0.00%10.50%0.01%
PG&E Corp PCG 1,987.70 14.93 29,676 0.11%7.50%0.01%
Parker-Hannifin Corp PH 128.46 290.62 37,333 0.14%1.83%0.00%14.00%0.02%
Rollins Inc ROL 492.47 42.08 20,723 0.08%1.24%0.00%10.50%0.01%
PPL Corp PPL 736.19 26.49 19,502 0.07%3.40%0.00%3.00%0.00%
ConocoPhillips COP 1,273.03 126.09 160,517 0.59%1.46%0.01%20.00%0.12%
PulteGroup Inc PHM 227.82 39.99 9,111 0.03%1.50%0.00%11.00%0.00%
Pinnacle West Capital Corp PNW 113.04 67.21 7,598 0.03%5.15%0.00%0.50%0.00%
PNC Financial Services Group Inc/The PNC 404.00 161.83 65,379 0.24%3.71%0.01%12.00%0.03%
PPG Industries Inc PPG 235.03 114.18 26,835 0.10%2.17%0.00%4.00%0.00%
Progressive Corp/The PGR 585.10 128.40 75,127 0.28%0.31%0.00%6.50%0.02%
Public Service Enterprise Group Inc PEG 498.86 56.07 27,971 0.10%3.85%0.00%4.00%0.00%
Robert Half International Inc RHI 108.50 76.46 8,296 0.03%2.25%0.00%7.50%0.00%
Edison International EIX 381.43 60.04 22,901 0.08%4.66%0.00%16.00%0.01%
Schlumberger NV SLB 1,417.99 52.03 73,778 1.35%23.50%
Charles Schwab Corp/The SCHW 1,817.79 79.67 144,824 0.53%1.10%0.01%9.00%0.05%
Sherwin-Williams Co/The SHW 259.14 225.03 58,315 0.21%1.07%0.00%11.50%0.02%
West Pharmaceutical Services Inc WST 74.03 230.10 17,035 0.06%0.33%0.00%17.00%0.01%
J M Smucker Co/The SJM 106.56 150.66 16,054 0.06%2.71%0.00%4.00%0.00%
Snap-on Inc SNA 53.16 222.05 11,803 0.04%2.56%0.00%4.50%0.00%
AMETEK Inc AME 229.58 129.66 29,767 0.11%0.68%0.00%10.00%0.01%
Southern Co/The SO 1,062.53 65.48 69,574 0.26%4.15%0.01%6.50%0.02%
Truist Financial Corp TFC 1,326.77 44.79 59,426 0.22%4.64%0.01%5.50%0.01%
Southwest Airlines Co LUV 593.75 36.35 21,583
W R Berkley Corp WRB 265.80 74.38 19,770 0.07%0.54%0.00%15.50%0.01%
Stanley Black & Decker Inc SWK 147.94 78.49 11,612 0.04%4.08%0.00%6.00%0.00%
Public Storage PSA 175.54 309.75 54,374 0.20%2.58%0.01%8.00%0.02%
Arista Networks Inc ANET 304.28 120.86 36,775 0.14%10.00%0.01%
Sysco Corp SYY 506.76 86.56 43,865 0.16%2.26%0.00%16.50%0.03%
Corteva Inc CTVA 718.60 65.34 46,953 0.17%0.92%0.00%16.50%0.03%
Texas Instruments Inc TXN 907.57 160.63 145,783 0.54%3.09%0.02%9.00%0.05%
Textron Inc TXT 208.77 68.44 14,288 0.05%0.12%0.00%10.50%0.01%
Thermo Fisher Scientific Inc TMO 391.79 513.97 201,368 0.74%0.23%0.00%10.00%0.07%
TJX Cos Inc/The TJX 1,161.05 72.10 83,712 0.31%1.64%0.01%17.00%0.05%
Globe Life Inc GL 97.44 115.52 11,256 0.04%0.72%0.00%8.00%0.00%
Johnson Controls International plc JCI 688.81 57.84 39,841 0.15%2.42%0.00%13.00%0.02%
Ulta Beauty Inc ULTA 51.22 419.37 21,481 0.08%15.50%0.01%
Union Pacific Corp UNP 614.80 197.14 121,202 0.45%2.64%0.01%9.50%0.04%
Keysight Technologies Inc KEYS 178.80 174.15 31,137 0.11%13.00%0.01%
UnitedHealth Group Inc UNH 935.38 555.15 519,278 1.91%1.19%0.02%12.00%0.23%
Marathon Oil Corp MRO 677.58 30.45 20,632 1.18%
Bio-Rad Laboratories Inc BIO 24.75 351.71 8,704 0.03%11.50%0.00%
Ventas Inc VTR 399.71 39.13 15,641 0.06%4.60%0.00%10.50%0.01%
VF Corp VFC 388.50 28.25 10,975 0.04%7.22%0.00%9.00%0.00%
Vornado Realty Trust VNO 191.78 23.59 4,524 8.99%-20.50%
Vulcan Materials Co VMC 132.90 163.70 21,756 0.08%0.98%0.00%8.50%0.01%
Weyerhaeuser Co WY 735.92 30.93 22,762 0.08%2.33%0.00%7.00%0.01%
Whirlpool Corp WHR 54.48 138.24 7,531 0.03%5.06%0.00%6.00%0.00%
Williams Cos Inc/The WMB 1,218.34 32.73 39,876 0.15%5.19%0.01%8.50%0.01%
Constellation Energy Corp CEG 326.66 94.54 30,883 0.60%
WEC Energy Group Inc WEC 315.44 91.33 28,809 0.11%3.19%0.00%6.00%0.01%
Adobe Inc ADBE 464.90 318.50 148,071 0.54%14.50%0.08%
AES Corp/The AES 667.93 26.16 17,473 0.06%2.42%0.00%14.00%0.01%
Amgen Inc AMGN 534.93 270.35 144,619 0.53%2.87%0.02%5.50%0.03%
Apple Inc AAPL 15,908.12 153.34 2,439,351 8.98%0.60%0.05%14.00%1.26%
Autodesk Inc ADSK 215.86 214.30 46,259 0.17%14.00%0.02%
Cintas Corp CTAS 101.55 427.55 43,416 0.16%1.08%0.00%13.50%0.02%
Comcast Corp CMCSA 4,313.96 31.74 136,925 0.50%3.40%0.02%9.50%0.05%
Molson Coors Beverage Co TAP 200.37 50.43 10,104 3.01%49.50%
KLA Corp KLAC 141.72 316.45 44,847 1.64%23.00%
Marriott International Inc/MD MAR 324.55 160.11 51,964 0.19%0.75%0.00%17.50%0.03%
McCormick & Co Inc/MD MKC 250.60 78.64 19,707 0.07%1.88%0.00%5.00%0.00%
PACCAR Inc PCAR 347.77 96.83 33,674 0.12%1.53%0.00%5.00%0.01%
Costco Wholesale Corp COST 442.60 501.50 221,966 0.82%0.72%0.01%10.50%0.09%
First Republic Bank/CA FRC 182.72 120.10 21,944 0.08%0.90%0.00%11.50%0.01%
Stryker Corp SYK 378.32 229.24 86,726 0.32%1.21%0.00%8.50%0.03%
Tyson Foods Inc TSN 289.62 68.35 19,795 0.07%2.69%0.00%6.00%0.00%
Lamb Weston Holdings Inc LW 143.83 86.22 12,401 0.05%1.14%0.00%11.50%0.01%
Applied Materials Inc AMAT 860.31 88.29 75,957 0.28%1.18%0.00%17.00%0.05%
American Airlines Group Inc AAL 649.90 14.18 9,216
Cardinal Health Inc CAH 262.01 75.90 19,887 0.07%2.61%0.00%5.00%0.00%
Cincinnati Financial Corp CINF 157.18 103.32 16,240 0.06%2.67%0.00%8.50%0.01%
Paramount Global PARA 608.42 18.32 11,146 0.04%5.24%0.00%4.50%0.00%
DR Horton Inc DHI 347.48 76.88 26,714 0.10%1.17%0.00%13.00%0.01%
Electronic Arts Inc EA 278.05 125.96 35,023 0.13%0.60%0.00%11.50%0.01%
Expeditors International of Washington Inc EXPD 163.60 97.85 16,008 0.06%1.37%0.00%10.00%0.01%
Fastenal Co FAST 572.76 48.33 27,681 0.10%2.57%0.00%8.50%0.01%
M&T Bank Corp MTB 172.90 168.37 29,111 0.11%2.85%0.00%9.00%0.01%
Xcel Energy Inc XEL 547.25 65.11 35,631 0.13%2.99%0.00%6.00%0.01%
Fiserv Inc FISV 635.03 102.74 65,243 0.24%11.00%0.03%
Fifth Third Bancorp FITB 686.34 35.69 24,496 0.09%3.70%0.00%9.00%0.01%
Gilead Sciences Inc GILD 1,254.00 78.46 98,389 0.36%3.72%0.01%12.00%0.04%
Hasbro Inc HAS 138.11 65.25 9,012 0.03%4.29%0.00%9.00%0.00%
Huntington Bancshares Inc/OH HBAN 1,442.73 15.18 21,901 0.08%4.08%0.00%12.50%0.01%
Welltower Inc WELL 463.37 61.04 28,284 0.10%4.00%0.00%3.50%0.00%
Biogen Inc BIIB 144.00 283.44 40,816 -10.50%
Northern Trust Corp NTRS 208.42 84.35 17,580 0.06%3.56%0.00%8.00%0.01%
Packaging Corp of America PKG 93.74 120.21 11,268 0.04%4.16%0.00%11.00%0.00%
Paychex Inc PAYX 360.40 118.31 42,639 0.16%2.67%0.00%10.00%0.02%
QUALCOMM Inc QCOM 1,123.00 117.66 132,132 0.49%2.55%0.01%19.00%0.09%
Roper Technologies Inc ROP 106.01 414.54 43,945 0.16%0.60%0.00%3.50%0.01%
Ross Stores Inc ROST 347.06 95.69 33,210 0.12%1.30%0.00%14.00%0.02%
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 6
Page 4 of 6
[4][5][6][7][8][9][10][11]
Value Line Cap-Weighted
Shares Market Weight in Estimated Cap-Weighted Long-Term Long-Term
Name Ticker Outst'g Price Capitalization Index Dividend Yield Dividend Yield Growth Est.Growth Est.
IDEXX Laboratories Inc IDXX 83.25 359.68 29,945 0.11%12.00%0.01%
Starbucks Corp SBUX 1,147.40 86.59 99,353 0.37%2.45%0.01%16.50%0.06%
KeyCorp KEY 932.94 17.87 16,672 0.06%4.36%0.00%7.50%0.00%
Fox Corp FOXA 305.37 28.87 8,816 0.03%1.73%0.00%11.00%0.00%
Fox Corp FOX 241.57 27.20 6,571 1.84%
State Street Corp STT 366.94 74.00 27,154 0.10%3.41%0.00%8.50%0.01%
Norwegian Cruise Line Holdings Ltd NCLH 421.39 16.89 7,117
US Bancorp USB 1,486.00 42.45 63,081 0.23%4.52%0.01%6.00%0.01%
A O Smith Corp AOS 126.87 54.78 6,950 0.03%2.19%0.00%11.50%0.00%
NortonLifeLock Inc NLOK 666.03 22.53 15,006 0.06%2.22%0.00%11.50%0.01%
T Rowe Price Group Inc TROW 223.47 106.16 23,723 0.09%4.52%0.00%8.00%0.01%
Waste Management Inc WM 410.48 158.37 65,007 0.24%1.64%0.00%6.50%0.02%
Constellation Brands Inc STZ 161.22 247.08 39,835 0.15%1.30%0.00%5.00%0.01%
DENTSPLY SIRONA Inc XRAY 215.45 30.82 6,640 0.02%1.62%0.00%12.00%0.00%
Zions Bancorp NA ZION 149.61 51.94 7,771 0.03%3.16%0.00%6.50%0.00%
Alaska Air Group Inc ALK 126.83 44.46 5,639
Invesco Ltd IVZ 454.80 15.32 6,968 0.03%4.90%0.00%10.00%0.00%
Linde PLC LIN 494.38 297.35 147,004 0.54%1.57%0.01%12.00%0.06%
Intuit Inc INTU 281.87 427.50 120,499 0.44%0.73%0.00%17.50%0.08%
Morgan Stanley MS 1,716.83 82.17 141,072 0.52%3.77%0.02%10.50%0.05%
Microchip Technology Inc MCHP 552.48 61.74 34,110 0.13%1.95%0.00%10.00%0.01%
Chubb Ltd CB 415.05 214.89 89,190 0.33%1.54%0.01%14.50%0.05%
Hologic Inc HOLX 249.65 67.80 16,926 25.00%
Citizens Financial Group Inc CFG 495.64 40.90 20,272 0.07%4.11%0.00%8.00%0.01%
O'Reilly Automotive Inc ORLY 62.80 837.17 52,573 0.19%13.00%0.03%
Allstate Corp/The ALL 270.30 126.25 34,125 0.13%2.69%0.00%2.50%0.00%
Equity Residential EQR 377.92 63.02 23,816 3.97%-6.00%
BorgWarner Inc BWA 234.15 37.53 8,788 0.03%1.81%0.00%9.50%0.00%
Keurig Dr Pepper Inc KDP 1,416.25 38.84 55,007 0.20%2.06%0.00%11.50%0.02%
Organon & Co OGN 254.33 26.18 6,658 4.28%
Host Hotels & Resorts Inc HST 714.89 18.88 13,497 2.54%59.50%
Incyte Corp INCY 222.43 74.34 16,536 25.50%
Simon Property Group Inc SPG 327.35 108.98 35,675 0.13%6.42%0.01%3.00%0.00%
Eastman Chemical Co EMN 119.99 76.81 9,216 0.03%3.96%0.00%9.50%0.00%
AvalonBay Communities Inc AVB 139.83 175.12 24,487 0.09%3.63%0.00%8.00%0.01%
Prudential Financial Inc PRU 372.60 105.19 39,194 0.14%4.56%0.01%5.50%0.01%
United Parcel Service Inc UPS 731.85 167.77 122,783 0.45%3.62%0.02%11.50%0.05%
Walgreens Boots Alliance Inc WBA 864.81 36.50 31,566 0.12%5.26%0.01%5.00%0.01%
STERIS PLC STE 100.02 172.58 17,261 0.06%1.09%0.00%11.50%0.01%
McKesson Corp MCK 143.73 389.37 55,964 0.21%0.55%0.00%10.00%0.02%
Lockheed Martin Corp LMT 262.07 486.68 127,546 0.47%2.47%0.01%7.00%0.03%
AmerisourceBergen Corp ABC 207.26 157.22 32,585 0.12%1.17%0.00%8.50%0.01%
Capital One Financial Corp COF 382.00 106.02 40,500 2.26%
Waters Corp WAT 59.88 299.17 17,913 0.07%6.00%0.00%
Nordson Corp NDSN 57.21 225.00 12,872 0.05%1.16%0.00%12.00%0.01%
Dollar Tree Inc DLTR 223.94 158.50 35,494 0.13%12.00%0.02%
Darden Restaurants Inc DRI 122.39 143.14 17,518 3.38%21.00%
Match Group Inc MTCH 282.99 43.20 12,225 21.00%
Domino's Pizza Inc DPZ 35.40 332.24 11,761 0.04%1.32%0.00%14.50%0.01%
NVR Inc NVR 3.21 4,237.75 13,612 0.05%5.50%0.00%
NetApp Inc NTAP 217.37 69.27 15,057 0.06%2.89%0.00%8.00%0.00%
DXC Technology Co DXC 229.88 28.75 6,609 0.02%12.00%0.00%
Old Dominion Freight Line Inc ODFL 111.77 274.60 30,693 0.11%0.44%0.00%11.50%0.01%
DaVita Inc DVA 90.10 73.01 6,578 0.02%11.00%0.00%
Hartford Financial Services Group Inc/The HIG 318.10 72.41 23,034 0.08%2.35%0.00%6.50%0.01%
Iron Mountain Inc IRM 290.69 50.07 14,555 0.05%4.94%0.00%11.00%0.01%
Estee Lauder Cos Inc/The EL 231.55 200.49 46,423 0.17%1.20%0.00%14.00%0.02%
Cadence Design Systems Inc CDNS 274.32 151.39 41,529 0.15%12.00%0.02%
Tyler Technologies Inc TYL 41.64 323.33 13,463 0.05%12.00%0.01%
Universal Health Services Inc UHS 65.72 115.87 7,615 0.03%0.69%0.00%7.00%0.00%
Skyworks Solutions Inc SWKS 160.45 86.01 13,800 0.05%2.88%0.00%13.00%0.01%
Quest Diagnostics Inc DGX 113.89 143.65 16,360 0.06%1.84%0.00%3.50%0.00%
Activision Blizzard Inc ATVI 782.31 72.80 56,952 0.21%0.65%0.00%12.50%0.03%
Rockwell Automation Inc ROK 115.44 255.30 29,471 0.11%1.85%0.00%9.50%0.01%
Kraft Heinz Co/The KHC 1,224.93 38.47 47,123 0.17%4.16%0.01%6.50%0.01%
American Tower Corp AMT 465.61 207.19 96,469 0.36%2.84%0.01%9.00%0.03%
Regeneron Pharmaceuticals Inc REGN 107.19 748.75 80,259 0.30%3.00%0.01%
Amazon.com Inc AMZN 10,201.65 102.44 1,045,057 26.50%
Jack Henry & Associates Inc JKHY 72.88 199.06 14,508 0.05%0.98%0.00%9.00%0.00%
Ralph Lauren Corp RL 42.90 92.69 3,976 0.01%3.24%0.00%12.00%0.00%
Boston Properties Inc BXP 156.76 72.70 11,396 5.39%-1.00%
Amphenol Corp APH 595.10 75.83 45,126 0.17%1.11%0.00%13.00%0.02%
Howmet Aerospace Inc HWM 413.71 35.55 14,707 0.05%0.45%0.00%12.00%0.01%
Pioneer Natural Resources Co PXD 237.60 256.41 60,923 8.91%21.00%
Valero Energy Corp VLO 385.52 125.55 48,402 0.18%3.12%0.01%11.00%0.02%
Synopsys Inc SNPS 152.91 292.55 44,734 0.16%12.50%0.02%
Etsy Inc ETSY 126.61 93.91 11,890 24.50%
CH Robinson Worldwide Inc CHRW 123.88 97.72 12,106 0.04%2.25%0.00%8.50%0.00%
Accenture PLC ACN 630.08 283.90 178,880 0.66%1.58%0.01%12.50%0.08%
TransDigm Group Inc TDG 54.24 575.76 31,226 0.11%19.50%0.02%
Yum! Brands Inc YUM 284.54 118.25 33,647 0.12%1.93%0.00%10.50%0.01%
Prologis Inc PLD 923.22 110.75 102,246 0.38%2.85%0.01%6.00%0.02%
FirstEnergy Corp FE 571.75 37.71 21,561 0.08%4.14%0.00%3.00%0.00%
VeriSign Inc VRSN 106.02 200.46 21,252 0.08%11.00%0.01%
Quanta Services Inc PWR 143.02 142.04 20,315 0.07%0.20%0.00%12.50%0.01%
Henry Schein Inc HSIC 136.12 68.46 9,318 0.03%7.00%0.00%
Ameren Corp AEE 258.37 81.52 21,062 0.08%2.89%0.00%6.50%0.01%
ANSYS Inc ANSS 87.07 221.16 19,256 0.07%8.50%0.01%
FactSet Research Systems Inc FDS 38.08 425.49 16,202 0.06%0.84%0.00%10.50%0.01%
NVIDIA Corp NVDA 2,490.00 134.97 336,075 0.12%23.00%
Sealed Air Corp SEE 145.23 47.62 6,916 0.03%1.68%0.00%10.00%0.00%
Cognizant Technology Solutions Corp CTSH 517.79 62.25 32,232 0.12%1.73%0.00%8.00%0.01%
SVB Financial Group SIVB 59.10 230.96 13,651 0.05%8.50%0.00%
Intuitive Surgical Inc ISRG 353.39 246.47 87,099 0.32%12.50%0.04%
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 6
Page 5 of 6
[4][5][6][7][8][9][10][11]
Value Line Cap-Weighted
Shares Market Weight in Estimated Cap-Weighted Long-Term Long-Term
Name Ticker Outst'g Price Capitalization Index Dividend Yield Dividend Yield Growth Est.Growth Est.
Take-Two Interactive Software Inc TTWO 166.49 118.48 19,726 0.07%8.00%0.01%
Republic Services Inc RSG 316.00 132.62 41,908 0.15%1.49%0.00%12.50%0.02%
eBay Inc EBAY 549.37 39.84 21,887 0.08%2.21%0.00%15.50%0.01%
Goldman Sachs Group Inc/The GS 341.36 344.51 117,601 0.43%2.90%0.01%5.00%0.02%
SBA Communications Corp SBAC 107.88 269.90 29,116 1.05%35.50%
Sempra Energy SRE 314.31 150.94 47,442 0.17%3.03%0.01%7.00%0.01%
Moody's Corp MCO 183.20 264.87 48,524 0.18%1.06%0.00%8.00%0.01%
ON Semiconductor Corp ON 432.42 61.43 26,564 22.50%
Booking Holdings Inc BKNG 39.71 1,869.48 74,230 22.00%
F5 Inc FFIV 59.86 142.91 8,555 0.03%10.00%0.00%
Akamai Technologies Inc AKAM 158.96 88.33 14,041 0.05%5.50%0.00%
Charles River Laboratories International Inc CRL 50.86 212.25 10,796 0.04%12.00%0.00%
MarketAxess Holdings Inc MKTX 37.64 244.04 9,185 0.03%1.15%0.00%11.00%0.00%
Devon Energy Corp DVN 654.80 77.35 50,649 8.02%30.00%
Bio-Techne Corp TECH 39.22 296.26 11,620 0.04%0.43%0.00%17.50%0.01%
Alphabet Inc GOOGL 5,973.00 94.51 564,508
Teleflex Inc TFX 46.91 214.56 10,064 0.04%0.63%0.00%10.00%0.00%
Allegion plc ALLE 87.85 104.77 9,204 0.03%1.57%0.00%10.50%0.00%
Netflix Inc NFLX 445.02 291.88 129,892 0.48%14.50%0.07%
Warner Bros Discovery Inc WBD 2,427.59 13.00 31,559
Agilent Technologies Inc A 296.04 138.35 40,957 0.15%0.61%0.00%12.00%0.02%
Trimble Inc TRMB 247.66 60.16 14,899 0.05%10.00%0.01%
Elevance Health Inc ELV 238.83 546.77 130,584 0.48%0.94%0.00%12.50%0.06%
CME Group Inc CME 359.43 173.30 62,290 0.23%2.31%0.01%8.50%0.02%
Juniper Networks Inc JNPR 324.56 30.60 9,931 0.04%2.75%0.00%9.00%0.00%
BlackRock Inc BLK 150.77 645.91 97,383 0.36%3.02%0.01%10.00%0.04%
DTE Energy Co DTE 193.74 112.11 21,720 0.08%3.16%0.00%4.50%0.00%
Celanese Corp CE 108.35 96.12 10,415 0.04%2.91%0.00%7.50%0.00%
Nasdaq Inc NDAQ 491.23 62.24 30,574 0.11%1.29%0.00%6.00%0.01%
Philip Morris International Inc PM 1,550.20 91.85 142,386 0.52%5.53%0.03%5.00%0.03%
Ingersoll Rand Inc IR 403.18 50.50 20,361 0.16%
Salesforce Inc CRM 1,000.00 162.59 162,590 0.60%19.50%0.12%
Huntington Ingalls Industries Inc HII 39.95 257.07 10,269 0.04%1.84%0.00%10.00%0.00%
MetLife Inc MET 797.61 73.21 58,393 0.21%2.73%0.01%7.50%0.02%
Tapestry Inc TPR 242.05 31.68 7,668 0.03%3.79%0.00%15.00%0.00%
CSX Corp CSX 2,102.41 29.06 61,096 0.22%1.38%0.00%10.50%0.02%
Edwards Lifesciences Corp EW 618.26 72.43 44,781 0.16%12.00%0.02%
Ameriprise Financial Inc AMP 108.17 309.12 33,436 0.12%1.62%0.00%15.00%0.02%
Zebra Technologies Corp ZBRA 51.79 283.22 14,668 0.05%11.50%0.01%
Zimmer Biomet Holdings Inc ZBH 209.82 113.35 23,783 0.09%0.85%0.00%7.00%0.01%
Camden Property Trust CPT 106.53 115.55 12,309 0.05%3.25%0.00%4.50%0.00%
CBRE Group Inc CBRE 315.95 70.94 22,413 0.08%8.50%0.01%
Mastercard Inc MA 953.80 328.18 313,019 1.15%0.60%0.01%18.50%0.21%
CarMax Inc KMX 158.02 63.01 9,957 0.04%4.00%0.00%
Intercontinental Exchange Inc ICE 558.46 95.57 53,372 0.20%1.59%0.00%6.50%0.01%
Fidelity National Information Services Inc FIS 607.98 82.99 50,456 2.27%52.00%
Chipotle Mexican Grill Inc CMG 27.72 1,498.33 41,535 22.50%
Wynn Resorts Ltd WYNN 113.73 63.90 7,267 27.00%
Live Nation Entertainment Inc LYV 229.97 79.61 18,308
Assurant Inc AIZ 53.21 135.86 7,229 0.03%2.00%0.00%15.50%0.00%
NRG Energy Inc NRG 235.15 44.40 10,441 3.15%-10.50%
Monster Beverage Corp MNST 526.89 93.72 49,380 0.18%10.50%0.02%
Regions Financial Corp RF 934.40 21.95 20,510 0.08%3.64%0.00%11.50%0.01%
Baker Hughes Co BKR 1,001.47 27.66 27,701 2.75%
Mosaic Co/The MOS 345.27 53.75 18,558 1.12%38.00%
Expedia Group Inc EXPE 152.04 93.47 14,211
Evergy Inc EVRG 229.48 61.13 14,028 0.05%3.75%0.00%7.50%0.00%
CF Industries Holdings Inc CF 199.26 106.26 21,173 1.51%32.00%
APA Corp APA 326.53 45.46 14,844 2.20%
Leidos Holdings Inc LDOS 136.54 101.59 13,871 0.05%1.42%0.00%8.50%0.00%
Alphabet Inc GOOG 6,086.00 94.66 576,101 2.12%18.50%0.39%
Cooper Cos Inc/The COO 49.35 273.39 13,491 0.05%0.02%0.00%14.00%0.01%
TE Connectivity Ltd TEL 319.84 122.23 39,094 0.14%1.83%0.00%10.50%0.02%
Discover Financial Services DFS 273.23 104.46 28,541 0.11%2.30%0.00%16.00%0.02%
Visa Inc V 1,635.02 207.16 338,710 1.25%0.87%0.01%13.50%0.17%
Mid-America Apartment Communities Inc MAA 115.48 157.45 18,182 0.07%3.18%0.00%4.50%0.00%
Xylem Inc/NY XYL 180.18 102.43 18,456 0.07%1.17%0.00%9.00%0.01%
Marathon Petroleum Corp MPC 498.62 113.62 56,654 2.04%
Advanced Micro Devices Inc AMD 1,614.32 60.06 96,956 25.50%
Tractor Supply Co TSCO 111.00 219.77 24,394 0.09%1.67%0.00%12.50%0.01%
ResMed Inc RMD 146.48 223.69 32,767 0.12%0.79%0.00%8.50%0.01%
Mettler-Toledo International Inc MTD 22.51 1,264.93 28,470 0.10%12.50%0.01%
Jacobs Solutions Inc J 127.61 115.22 14,703 0.05%0.80%0.00%12.00%0.01%
Copart Inc CPRT 238.06 115.02 27,382 0.10%7.00%0.01%
VICI Properties Inc VICI 963.10 32.02 30,838 0.11%4.87%0.01%8.50%0.01%
Fortinet Inc FTNT 788.52 57.16 45,072 21.50%
Albemarle Corp ALB 117.13 279.87 32,781 0.56%21.50%
Moderna Inc MRNA 391.20 150.33 58,809 -2.50%
Essex Property Trust Inc ESS 64.75 222.24 14,391 3.96%-4.00%
CoStar Group Inc CSGP 406.69 82.72 33,641 0.12%13.00%0.02%
Realty Income Corp O 617.58 62.27 38,457 0.14%4.78%0.01%6.00%0.01%
Westrock Co WRK 254.30 34.06 8,661 0.03%3.23%0.00%20.00%0.01%
Westinghouse Air Brake Technologies Corp WAB 181.88 93.28 16,965 0.06%0.64%0.00%9.50%0.01%
Pool Corp POOL 39.05 304.23 11,880 0.04%1.31%0.00%14.00%0.01%
Western Digital Corp WDC 317.56 34.37 10,914 0.04%20.00%0.01%
PepsiCo Inc PEP 1,377.71 181.58 250,164 0.92%2.53%0.02%6.00%0.06%
Diamondback Energy Inc FANG 177.79 157.11 27,932 7.77%
ServiceNow Inc NOW 202.00 420.74 84,989 45.50%
Church & Dwight Co Inc CHD 243.87 74.13 18,078 0.07%1.42%0.00%6.00%0.00%
Federal Realty Investment Trust FRT 80.91 98.98 8,008 0.03%4.36%0.00%2.50%0.00%
MGM Resorts International MGM 393.10 35.57 13,983 0.03%25.00%
American Electric Power Co Inc AEP 513.86 87.92 45,179 0.17%3.78%0.01%6.50%0.01%
SolarEdge Technologies Inc SEDG 55.64 230.03 12,798 22.00%
Invitation Homes Inc INVH 611.41 31.69 19,376 2.78%
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 6
Page 6 of 6
[4][5][6][7][8][9][10][11]
Value Line Cap-Weighted
Shares Market Weight in Estimated Cap-Weighted Long-Term Long-Term
Name Ticker Outst'g Price Capitalization Index Dividend Yield Dividend Yield Growth Est.Growth Est.
PTC Inc PTC 117.47 117.83 13,841 29.00%
JB Hunt Transport Services Inc JBHT 103.81 171.07 17,759 0.07%0.94%0.00%11.50%0.01%
Lam Research Corp LRCX 136.38 404.78 55,203 0.20%1.70%0.00%20.00%0.04%
Mohawk Industries Inc MHK 63.53 94.75 6,020 0.02%10.00%0.00%
Pentair PLC PNR 164.50 42.95 7,065 0.03%1.96%0.00%13.00%0.00%
Vertex Pharmaceuticals Inc VRTX 256.69 312.00 80,088 0.29%12.50%0.04%
Amcor PLC AMCR 1,489.02 11.58 17,243 0.06%4.15%0.00%14.50%0.01%
Meta Platforms Inc META 2,248.67 93.16 209,486 0.77%13.00%0.10%
T-Mobile US Inc TMUS 1,244.15 151.56 188,564 0.69%10.00%0.07%
United Rentals Inc URI 69.31 315.71 21,881 0.08%18.00%0.01%
Alexandria Real Estate Equities Inc ARE 164.09 145.30 23,842 0.09%3.25%0.00%10.00%0.01%
Honeywell International Inc HON 672.32 204.02 137,167 0.50%2.02%0.01%11.00%0.06%
ABIOMED Inc ABMD 45.46 252.08 11,460 0.04%7.50%0.00%
Delta Air Lines Inc DAL 641.19 33.93 21,756
United Airlines Holdings Inc UAL 326.73 43.08 14,075
Seagate Technology Holdings PLC STX 206.45 49.66 10,253 0.04%5.64%0.00%15.00%0.01%
News Corp NWS 195.82 17.13 3,354 1.17%
Centene Corp CNC 566.26 85.13 48,206 0.18%10.00%0.02%
Martin Marietta Materials Inc MLM 62.37 335.98 20,956 0.08%0.79%0.00%5.50%0.00%
Teradyne Inc TER 156.78 81.35 12,754 0.05%0.54%0.00%8.50%0.00%
PayPal Holdings Inc PYPL 1,156.48 83.58 96,658 0.36%12.00%0.04%
Tesla Inc TSLA 3,157.75 227.54 718,515 52.00%
DISH Network Corp DISH 291.87 14.91 4,352 0.02%2.50%0.00%
Dow Inc DOW 703.76 46.74 32,894 0.12%5.99%0.01%15.00%0.02%
Everest Re Group Ltd RE 39.10 322.66 12,616 0.05%2.05%0.00%9.50%0.00%
Teledyne Technologies Inc TDY 46.87 397.98 18,651 0.07%11.50%0.01%
News Corp NWSA 385.60 16.87 6,505 1.19%
Exelon Corp EXC 991.76 38.59 38,272 3.50%
Global Payments Inc GPN 270.40 114.26 30,896 0.11%0.88%0.00%17.00%0.02%
Crown Castle Inc CCI 433.04 133.26 57,707 0.21%4.70%0.01%12.00%0.03%
Aptiv PLC APTV 270.93 91.07 24,674 26.00%
Advance Auto Parts Inc AAP 60.12 189.92 11,418 0.04%3.16%0.00%15.50%0.01%
Align Technology Inc ALGN 78.11 194.30 15,176 0.06%17.00%0.01%
Illumina Inc ILMN 157.30 228.82 35,993 0.13%6.50%0.01%
Targa Resources Corp TRGP 226.56 68.37 15,490 2.05%
LKQ Corp LKQ 270.10 55.64 15,028 0.06%1.98%0.00%13.00%0.01%
Zoetis Inc ZTS 468.14 150.78 70,586 0.26%0.86%0.00%11.00%0.03%
Digital Realty Trust Inc DLR 287.51 100.25 28,823 4.87%-3.50%
Equinix Inc EQIX 91.08 566.44 51,589 0.19%2.19%0.00%15.00%0.03%
Molina Healthcare Inc MOH 58.40 358.86 20,957 0.08%11.00%0.01%
Las Vegas Sands Corp LVS 764.17 38.01 29,046 0.11%13.50%0.01%
Notes:
[1] Equals sum of Col. [9]
[2] Equals sum of Col. [11]
[3] Equals ([1] x (1 + (0.5 x [2]))) + [2]
[4] Source: Bloomberg Professional as of October 31 2022
[5] Source: Bloomberg Professional as of October 31 2022
[6] Equals [4] x [5]
[7] Equals weight in S&P 500 based on market capitalization [6] if Growth Rate >0% and ≤20%
[8] Source: Bloomberg Professional, as of October 31 2022
[9] Equals [7] x [8]
[10] Source: Value Line, as of October 31 2022
[11] Equals [7] x [10]
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 7 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 7
Page 1 of 3[1][2][3]
Quarter
Average
Authorized Natual Gas U.S. Govt. 30-year Treasury Risk Premium
1992.1 12.42%7.81%4.61%
1992.2 11.98%7.90%4.09%
1992.3 11.87%7.45%4.42%
1992.4 11.94%7.52%4.42%
1993.1 11.75%7.07%4.68%
1993.2 11.71%6.86%4.85%
1993.3 11.39%6.32%5.07%
1993.4 11.16%6.14%5.02%
1994.1 11.12%6.58%4.54%
1994.2 10.84%7.36%3.47%
1994.3 10.87%7.59%3.28%
1994.4 11.53%7.96%3.56%
1995.2 11.00%6.94%4.06%
1995.3 11.07%6.72%4.35%
1995.4 11.61%6.24%5.37%
1996.1 11.45%6.29%5.16%
1996.2 10.88%6.92%3.95%
1996.3 11.25%6.97%4.28%
1996.4 11.19%6.62%4.57%
1997.1 11.31%6.82%4.49%
1997.2 11.70%6.94%4.76%
1997.3 12.00%6.53%5.47%
1997.4 10.92%6.15%4.77%
1998.2 11.37%5.85%5.52%
1998.3 11.41%5.48%5.93%
1998.4 11.69%5.11%6.58%
1999.1 10.82%5.37%5.44%
1999.2 11.25%5.80%5.45%
1999.4 10.38%6.26%4.12%
2000.1 10.66%6.30%4.36%
2000.2 11.03%5.98%5.05%
2000.3 11.33%5.79%5.54%
2000.4 12.10%5.69%6.41%
2001.1 11.38%5.45%5.93%
2001.2 10.75%5.70%5.05%
2001.4 10.65%5.30%5.35%
2002.1 10.67%5.52%5.15%
2002.2 11.64%5.62%6.03%
2002.3 11.50%5.09%6.41%
2002.4 11.01%4.93%6.08%
2003.1 11.38%4.85%6.53%
2003.2 11.36%4.60%6.76%
2003.3 10.61%5.11%5.50%
2003.4 10.84%5.11%5.73%
2004.1 11.06%4.88%6.18%
2004.2 10.57%5.34%5.24%
2004.3 10.37%5.11%5.26%
2004.4 10.66%4.93%5.73%
2005.1 10.65%4.71%5.94%
2005.2 10.54%4.47%6.07%
2005.3 10.47%4.42%6.05%
2005.4 10.32%4.65%5.66%
2006.1 10.68%4.63%6.05%
2006.2 10.60%5.14%5.46%
2006.3 10.34%5.00%5.34%
2006.4 10.14%4.74%5.40%
BOND YIELD PLUS RISK PREMIUM
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 7
Page 2 of 3[1][2][3]
Quarter
Average
Authorized Natual Gas U.S. Govt. 30-year Treasury Risk Premium
BOND YIELD PLUS RISK PREMIUM
2007.1 10.52%4.80%5.72%
2007.2 10.13%4.99%5.14%
2007.3 10.03%4.95%5.08%
2007.4 10.12%4.61%5.50%
2008.1 10.38%4.41%5.97%
2008.2 10.17%4.57%5.59%
2008.3 10.55%4.45%6.10%
2008.4 10.34%3.64%6.69%
2009.1 10.24%3.44%6.80%
2009.2 10.11%4.17%5.94%
2009.3 9.88%4.32%5.56%
2009.4 10.31%4.34%5.97%
2010.1 10.24%4.62%5.61%
2010.2 9.99%4.37%5.62%
2010.3 10.43%3.86%6.57%
2010.4 10.09%4.17%5.92%
2011.1 10.10%4.56%5.54%
2011.2 9.85%4.34%5.51%
2011.3 9.65%3.70%5.95%
2011.4 9.88%3.04%6.84%
2012.1 9.63%3.14%6.50%
2012.2 9.83%2.94%6.89%
2012.3 9.75%2.74%7.01%
2012.4 10.06%2.86%7.19%
2013.1 9.57%3.13%6.44%
2013.2 9.47%3.14%6.33%
2013.3 9.60%3.71%5.89%
2013.4 9.83%3.79%6.04%
2014.1 9.54%3.69%5.85%
2014.2 9.84%3.44%6.39%
2014.3 9.45%3.27%6.18%
2014.4 10.28%2.96%7.32%
2015.1 9.47%2.55%6.91%
2015.2 9.43%2.88%6.55%
2015.3 9.75%2.96%6.79%
2015.4 9.68%2.96%6.71%
2016.1 9.48%2.72%6.76%
2016.2 9.42%2.57%6.85%
2016.3 9.47%2.28%7.19%
2016.4 9.67%2.83%6.84%
2017.1 9.60%3.05%6.55%
2017.2 9.47%2.90%6.57%
2017.3 10.14%2.82%7.32%
2017.4 9.70%2.82%6.88%
2018.1 9.68%3.02%6.66%
2018.2 9.43%3.09%6.34%
2018.3 9.71%3.06%6.65%
2018.4 9.53%3.27%6.26%
2019.1 9.55%3.01%6.54%
2019.2 9.73%2.78%6.94%
2019.3 9.95%2.29%7.67%
2019.4 9.74%2.26%7.48%
2020.1 9.35%1.89%7.46%
2020.2 9.55%1.38%8.17%
2020.3 9.52%1.37%8.15%
2020.4 9.50%1.62%7.87%
2021.1 9.71%2.07%7.63%
2021.2 9.48%2.26%7.22%
2021.3 9.43%1.93%7.50%
2021.4 9.59%1.95%7.65%
2022.1 9.38%2.25%7.12%
2022.2 9.23%3.05%6.18%
2022.3 9.52%3.26%6.26%
2022.4 9.55%4.03%5.52%
AVERAGE 10.41%4.50%5.91%
MEDIAN 10.31%4.57%5.95%
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 7
Page 3 of 3
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.925454
R Square 0.856465
Adjusted R Square 0.855248
Standard Error 0.003915
Observations 120.000000
ANOVA
df SS MS F Significance F
Regression 1.000000 0.010793 0.010793 704.096812 0.000000
Residual 118.000000 0.001809 0.000015
Total 119.000000 0.012602
Coefficients Standard Error t Stat P-value Lower 95%Upper 95%Lower 95.0%Upper 95.0%
Intercept 0.0851 0.0010 81.6111 0.0000 0.0830 0.0872 0.0830 0.0872
U.S. Govt. 30-year Treasury (0.5778) 0.0218 (26.5348) 0.0000 (0.6209) (0.5347) (0.6209) (0.5347)
[7][8][9]
U.S. Govt.
30-year Risk
Treasury Premium ROE
Current 30-day average of 30-year U.S. Treasury bond yield [4]3.92%6.25%10.16%
Blue Chip Near-Term Projected Forecast (Q1 2023 - Q1 2024) [5]4.00%6.20%10.20%
Blue Chip Long-Term Projected Forecast (2024-2028) [6]3.80%6.32%10.12%
AVERAGE 10.16%
Notes:
[1] Source: Regulatory Research Associates, rate cases through October 31, 2022
[2] Source: S&P Capital IQ Pro, quarterly bond yields are the average of each trading day in the quarter
[3] Equals Column [1] − Column [2]
[4] Source: Bloomberg Professional, 30-day average as of October 31, 2022
[5] Source: Blue Chip Financial Forecasts, Vol. 41, No. 11, November 1, 2022, at 2
[6] Source: Blue Chip Financial Forecasts, Vol. 41, No. 6, June 1, 2022, at 14
[7] See notes [4], [5] & [6]
[8] Equals 0.085115 + (-0.577800 x Column [7])
[9] Equals Column [7] + Column [8]
y = -0.5778x + 0.0851R² = 0.8565
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
1.00%2.00%3.00%4.00%5.00%6.00%7.00%8.00%
Ri
s
k

P
r
e
m
i
u
m
U.S. Government 30-year Treasury Yield
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 8 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 8
Page 1 of 1SIZE PREMIUM CALCULATION
Proxy Group Market Capitalization and Market-to-Book Ratio
[1][2]
Market
Capitalization Market-to-
Company Ticker ($ billions)Book Ratio
Atmos Energy Corporation ATO 14.60 1.58
New Jersey Resources Corporation NJR 3.99 2.26
NiSource Inc.NI 10.48 1.92
Northwest Natural Gas Company NWN 1.59 1.39
ONE Gas Inc.OGS 4.01 1.63
Spire, Inc.SR 3.45 1.32
Average 6.35 1.68
Median 4.00 1.60
IMG
Common Equity ($ millions) [3]193.76$
Implied Market Capitalization [4]310.86
As a percent of Proxy Group Median Market Capitalization 7.77%
Kroll Cost of Capital Navigator -- Size Premium
[5][6]
Market
Capitalization
of Largest
Company Size
Breakdown of Deciles 1-10 ($ millions)Premium
1-Largest 2,324,390.22 -0.22%
2 36,099.22 0.43%
3 16,738.36 0.55%
4 8,212.64 0.54%
5 5,003.75 0.89%
6 3,276.55 1.18%
7 2,164.52 1.34%
8 1,306.04 1.21%
9 627.80 2.10%
10-Smallest 289.01 4.80%
IMG - Implied Market Capitalization 310.86 2.10%
Proxy Group Median Market Capitalization 4,000.68 0.89%
Size Premium [7]1.21%
Notes:
[1] Source: S&P Capital IQ Pro, equals 30-day average as of October 31, 2022
[2] Source: S&P Capital IQ Pro; equals 30-day average as of October 31, 2022
[3] Data provided by IMG
[4] Equals [3] x proxy group median market-to-book ratio
[5] Kroll Cost of Capital Navigator - Size Premium: Annual Data as of 12/31/2021
[6] Kroll Cost of Capital Navigator - Size Premium: Annual Data as of 12/31/2021
[7] Equals 2.10% − 0.89%
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 9 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 9
Page 1 of 2
[1][2][3][4][5][6][7]
2023-2027
Cap. Ex. /
2021
2021 2023 2024 2025 2026 2027 Net Plant
Atmos Energy Corporation ATO
Capital Spending per Share 17.10$ 17.55$ 18.00$ 18.00$ 18.00$
Common Shares Outstanding 146.00$ 150.50$ 155.00$ 155.00$ 155.00$
Capital Expenditures 2,496.60$ 2,641.28$ 2,790.00$ 2,790.00$ 2,790.00$ 89.67%
Net Plant 15,064$
New Jersey Resources Corporation NJR
Capital Spending per Share 5.15$ 6.83$ 8.50$ 8.50$ 8.50$
Common Shares Outstanding 99.00$ 99.50$ 100.00$ 100.00$ 100.00$
Capital Expenditures 509.85$ 679.09$ 850.00$ 850.00$ 850.00$ 88.74%
Net Plant 4,214$
NiSource Inc.NI
Capital Spending per Share 8.10$ 6.93$ 5.75$ 5.75$ 5.75$
Common Shares Outstanding 408.00$ 411.50$ 415.00$ 415.00$ 415.00$
Capital Expenditures 3,304.80$ 2,849.64$ 2,386.25$ 2,386.25$ 2,386.25$ 74.45%
Net Plant 17,882$
Northwest Natural Gas Company NWN
Capital Spending per Share 7.75$ 8.58$ 9.40$ 9.40$ 9.40$
Common Shares Outstanding 35.50$ 33.75$ 32.00$ 32.00$ 32.00$
Capital Expenditures 275.13$ 289.41$ 300.80$ 300.80$ 300.80$ 51.09%
Net Plant 2,871$
ONE Gas, Inc.OGS
Capital Spending per Share 9.55$ 9.70$ 9.85$ 9.85$ 9.85$
Common Shares Outstanding 54.50$ 55.75$ 57.00$ 57.00$ 57.00$
Capital Expenditures 520.48$ 540.78$ 561.45$ 561.45$ 561.45$ 52.89%
Net Plant 5,191$
Spire, Inc.SR
Capital Spending per Share 11.25$ 11.63$ 12.00$ 12.00$ 12.00$
Common Shares Outstanding 52.50$ 53.75$ 55.00$ 55.00$ 55.00$
Capital Expenditures 590.63$ 624.84$ 660.00$ 660.00$ 660.00$ 63.21%
Net Plant 5,056$
Intermountain Gas Company IMG
Capital Expenditures [8]54.42$ 70.14$ 68.41$ 65.31$ 64.34$ 70.43%
Net Plant [9]458.07$
Notes:
[1] - [6] Source: Value Line, dated August 26, 2022
[7] Equals (Column [2] + [3] + [4] + [5] + [6]) / Column [1]
[8] Source: Company-Provided Data
[9] Source: Company-Provided Data for December 31, 2021
2023-2027 CAPITAL EXPENDITURES AS A PERCENTAGE OF2021 NET PLANT
($ Millions)
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 9
Page 2 of 2
Company Ticker 2023-2027 / 2021
1 Northwest Natural Gas Company NWN 51.09%
2 ONE Gas, Inc.OGS 52.89%
3 Spire, Inc.SR 63.21%
4 Intermountain Gas Company IMG 70.43%
5 NiSource Inc.NI 74.45%
6 New Jersey Resources Corporation NJR 88.74%
7 Atmos Energy Corporation ATO 89.67%
Proxy Group Median 68.83%
Intermountain Gas Company 1.08
Notes:
Source: Exhibit No. 9, pg. 1 col. [7]Y
Projected CAPEX/2021 Net Plant
51.09%52.89%
63.21%70.43%74.45%
88.74%89.67%
1 2 3 4 5 6 7 8 9 10
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
NWN OGS SR IMG NI NJR ATO
Median= 68.83%
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 10 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 10
Page 1 of 1
Full/Partial Capital Cost Non-VolumetricForecastedRecoveryRate
Company Operating Subsidiary State Utility Type Test Year Mechanism Design Citations
Atmos Energy Corporation
Atmos Energy Corporation Colorado Gas Historical Yes No
Atmos Energy Corporation Kansas Gas Historical Yes Partial
Atmos Energy Corporation Kentucky Gas Fully Forecast Yes Partial CCRM: 2021 10-K, p. 9Atmos Energy Corporation Louisiana Gas Historical No FRP
Atmos Energy Corporation Mississippi Gas Historical Yes FRP
Atmos Energy Corporation Tennessee Gas Historical No FRPAtmos Energy Corporation Texas Gas Historical Yes FRP
Atmos Energy Corporation Virginia Gas Historical Yes Partial
NiSource Inc.
Northern Indiana Public Service Co.Indiana Electric Fully Forecast Yes Partial Test Year: S&P Global - Market Intelligence Rate Case History (Past Rate Cases)Northern Indiana Public Service Co.Indiana Gas Fully Forecast Yes No CCRM: S&P Global Market Intelligence, Regulatory Focus: Adjustment Clauses, dated July 18, 2022
Columbia Gas of Kentucky Inc.Kentucky Gas Fully Forecast Yes Partial NVRD: S&P Global Market Intelligence, Regulatory Focus: Adjustment Clauses, dated July 18, 2022
Columbia Gas of Maryland Inc.Maryland Gas Partially Forecast Yes Partial
Columbia Gas of Ohio Inc.Ohio Gas Partially Forecast Yes SFVColumbia Gas of Pennsylvania Inc.Pennsylvania Gas Fully Forecast Yes Partial
Columbia Gas of Virginia Inc.Virginia Gas Historical Yes Partial
New Jersey Resources Corporation Test Year: S&P Global - Market Intelligence Rate Case History (Past Rate Cases)
New Jersey Natural Gas Co.New Jersey Gas Partially Forecast Yes Full CCRM / NVRD: S&P Global Market Intelligence, Regulatory Focus: Adjustment Clauses, dated July 18, 2022Northwest Natural Gas Company Northwest Natural Gas Co.Oregon Gas Fully Forecast Yes Partial Test Year: S&P Global - Market Intelligence Rate Case History (Past Rate Cases)
Northwest Natural Gas Co.Washington Gas Historical No No CCRM / NVRD: S&P Global Market Intelligence, Regulatory Focus: Adjustment Clauses, dated July 18, 2022
ONE Gas, Inc.Kansas Gas Service Co.Kansas Gas Historical Yes Partial Test Year: S&P Global - Market Intelligence Rate Case History (Past Rate Cases)
Oklahoma Natural Gas Co.Oklahoma Gas Historical No FRP
Texas Gas Service Co. Inc.Texas Gas Historical Yes FRP
Spire, Inc.Spire Alabama Inc.Alabama Gas Fully Forecast No FRP
Spire Gulf Inc.Gulf Gas Fully Forecast No FRP
Spire Mississippi Inc.Mississippi Gas Historical No FRPSpire Missouri Inc.Missouri Gas Partially Forecast Yes Partial
Proxy Group Totals Fully Forecast 8 Yes 18 Full 1
Partially Forecast 4 No 7 Partial 11
Historical 13 FRP 9SFV1No3
Forecast 48.00%CCRM 72.00%NVRD 88.00%
MDU Resources Intermountain Gas Company Idaho Gas Partially Forecast No No Data provided by IMG
CCRM / NVRD: 2021 10-K pgs. 119 - 124; S&P Global Market Intelligence, Regulatory Focus: Adjustment Clauses,
dated July 18, 2022
Test Year: 2021 10-K pgs. 119 - 124; S&P Global - Market Intelligence Rate Case History (Past Rate Cases)
REGULATORY RISK ASSESSMENT
COMPARISON OF INTERMOUNTAIN GAS COMPANY AND PROXY GROUP COMPANIES
Test Year: S&P Global - Market Intelligence Rate Case History (Past Rate Cases); ATO LA Tariff; ATO MS Tariff; ATO VA Docket No. PUE-2018-00005.
NVRD: 2021 10-K, p. 9; Tariffs (Colorado, Virginia); S&P Global Market Intelligence, Regulatory Focus: Adjustment
Clauses, dated July 18, 2022
CCRM / NVRD: ONE Gas 2021 10-K, p. 6; S&P Global Market Intelligence, Regulatory Focus: Adjustment Clauses,
dated July 18, 2022
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 11 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 11
Page 1 of 1
[1][2][3][4][5][6][7][8][9]
Company Date [i]
Shares Issued
(000)
Offering
Price
Under-writing
Discount [ii]
Offering Expense
($000)
Net Proceeds
Per Share
Total Flotation Costs
($000)
Gross Equity Issue Before
Costs ($000)
Net Proceeds
($000)
Flotation Cost
Percentage
MDU Resources Group 2/4/2004 2,300 23.32$ 0.7930$ 350$ 22.37$ 2,174$ 53,636$ 51,462$ 4.05%MDU Resources Group 11/19/2002 2,400 24.00$ 0.7200$ 193$ 23.20$ 1,921$ 57,600$ 55,680$ 3.33%4,094$ 111,236$ 107,142$ 3.68%
[i] Offering Completion Date
[ii] Underwriting discount was calculated as the market price minus the offering price when not explicitly given in the prospectus.
The flotation cost adjustment is derived by dividing the dividend yield by 1 − F (where F = flotation costs expressed in percentage terms), or by 0.9632, and adding that result to the constant growth rateto determine the cost of equity. Using the formulas shown previously in my testimony, the Constant Growth DCF calculation is modified as follows to accommodate an adjustment for flotation costs:
[10][11][12][13][14][15][16][17][18][19][20]
Company Ticker
Annualized Dividend Stock Price Dividend Yield
Expected Dividend Yield
Expected Dividend Yield Adjusted for Flotation Costs
Value Line Earnings Growth Yahoo! Finance Earnings Growth Zacks Earnings Growth
Average Earnings Growth ROE ROE Adjusted for Flotation Costs
Atmos Energy Corporation ATO $2.72 $104.39 2.61%2.71%2.81%7.50%8.26%7.50%7.75%10.46%10.56%New Jersey Resources Corporation NJR $1.56 $41.47 3.76%3.84%3.99%5.00%6.00%1.70%4.23%8.07%8.22%
NiSource Inc.NI $0.94 $25.58 3.67%3.82%3.97%9.50%7.30%7.20%8.00%11.82%11.97%Northwest Natural Gas Company NWN $1.94 $45.24 4.29%4.40%4.56%6.50%4.30%4.30%5.03%9.43%9.60%
ONE Gas, Inc.OGS $2.48 $74.01 3.35%3.44%3.57%6.50%5.00%5.00%5.50%8.94%9.07%Spire, Inc.SR $2.74 $65.69 4.17%4.30%4.46%9.00%4.30%5.00%6.10%10.40%10.56%
Mean 9.85%10.00%
Flotation Cost Adjustment [21]0.14%
Notes:
[1]-[4] Sources: MDU Resources Group - Prospectus dated February 4, 2004 and Prospectus dated November 19, 2002.[5] Equals [8]/[1]
[6] Equals [4] + ([1] x [3])[7] Equals [1] x [2]
[8] Equals [7] - [6][9] Equals [6] / [7]
[10] Source: Bloomberg Professional[11] Source: Bloomberg Professional, equals 30-day average as of October 31, 2022
[12] Equals [10] / [11][13] Equals [12] x (1 + 0.5 x [18])[14] Equals [13] / (1 − Flotation Cost)[15] Source: Value Line[16] Source: Yahoo! Finance
[17] Source: Zacks[18] Equals Average ([15], [16], [17])
[19] Equals [13] + [18][20] Equals [14] + [18]
[21] Equals Average ([20]) − Average ([19])
FLOTATION COST ADJUSTMENT -- INTERMOUNTAIN GAS PROXY GROUP
gFP
gDk 
1
5.01
Preston N. Carter ISB No. 8462
Morgan D. Goodin ISB No. 11184
Blake W. Ringer ISB No. 11223
Givens Pursley LLP
601 W. Bannock St.
Boise, ID 83702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
Attorneys for Intermountain Gas Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY.
FOR AUTHORITY TO INCREASE ITS
RATES AND CHARGES FOR NATURAL
GAS SERVICE IN THE STATE OF IDAHO
CASE NO. INT-G-22-07
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
EXHIBIT 12 TO ACCOMPANY THE
DIRECT TESTIMONY OF ANN E. BULKLEY
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 12
Page 1 of 2
Proxy Group Company Ticker 2021 2020 2019 3-yr Avg.
Atmos Energy Corporation ATO 59.88%58.31%58.43%58.88%
NiSource Inc.NI 54.85%54.43%54.33%54.54%
New Jersey Resources Corporation NJR 55.19%55.45%58.87%56.51%
Northwest Natural Gas Company NWN 49.57%47.44%49.19%48.73%
One Gas Inc.OGS 61.09%60.04%63.28%61.47%
Spire Inc.SR 55.50%58.66%60.85%58.34%
Proxy Group
MEAN 56.02%55.72%57.49%56.41%
MEDIAN 55.35%56.88%58.65%57.42%
LOW 49.57%47.44%49.19%48.73%
HIGH 61.09%60.04%63.28%61.47%
Company Name Ticker 2021 2020 2019 3-yr Avg.
Atmos Energy Corporation ATO 59.88%58.31%58.43%58.88%
Northern Indiana Public Service Company LLC NI 58.59%58.01%56.43%57.68%
Columbia Gas of Kentucky, Inc.NI 53.87%54.68%54.23%54.26%
Columbia Gas of Maryland, Inc.NI 55.26%54.95%52.38%54.20%
Columbia Gas of Ohio, Inc.NI 50.79%50.45%53.00%51.41%
Columbia Gas of Pennsylvania, Inc.NI 56.05%55.68%55.59%55.77%
Columbia Gas of Virginia, Inc.NI 44.52%43.69%42.53%43.58%
New Jersey Natural Gas Company NJR 55.19%55.45%58.87%56.51%
Northwest Natural Gas Company NWN 49.57%47.44%49.19%48.73%
Kansas Gas Service Company, Inc.OGS 61.37%60.33%63.55%61.75%
Oklahoma Natural Gas Company OGS 60.99%59.85%63.10%61.31%
Texas Gas Service Company, Inc.OGS 60.98%59.99%63.23%61.40%
Spire Alabama Inc.SR 58.66%64.35%66.82%63.28%
Spire Gulf Inc.SR 49.48%40.55%37.18%42.40%
Spire Mississippi Inc.SR 100.00%100.00%100.00%100.00%
Spire Missouri Inc.SR 53.96%56.68%59.05%56.56%
Notes:
CAPITAL STRUCTURE ANALYSIS
COMMON EQUITY RATIO [1]
[2] Natural Gas operating subsidiaries where data was unable to be obtained for 2021, 2020 and 2019 were removed
from the analysis.
COMMON EQUITY RATIO - UTILITY OPERATING COMPANIES
[1] Ratios are weighted by actual common capital, preferred equity, and long-term debt of Operating Subsidiaries.
Case No. INT-G-22-07
A. Bulkley, IGC
Exhibit No. 12
Page 2 of 2
Proxy Group Company Ticker 2021 2020 2019 3-yr Avg.
Atmos Energy Corporation ATO 40.12%41.69%41.57%41.12%
NiSource Inc.NI 45.15%45.57%45.67%45.46%
New Jersey Resources Corporation NJR 44.81%44.55%41.13%43.49%
Northwest Natural Gas Company NWN 50.43%52.56%50.81%51.27%
One Gas Inc.OGS 38.91%39.96%36.72%38.53%
Spire Inc.SR 44.50%41.34%39.15%41.66%
Proxy Group
MEAN 43.98%44.28%42.51%43.59%
MEDIAN 44.65%43.12%41.35%42.58%
LOW 38.91%39.96%36.72%38.53%
HIGH 50.43%52.56%50.81%51.27%
Company Name Ticker 2021 2020 2019 3-yr Avg.
Atmos Energy Corporation ATO 40.12%41.69%41.57%41.12%
Northern Indiana Public Service Company LLC NI 41.41%41.99%43.57%42.32%
Columbia Gas of Kentucky, Inc.NI 46.13%45.32%45.77%45.74%
Columbia Gas of Maryland, Inc.NI 44.74%45.05%47.62%45.80%
Columbia Gas of Ohio, Inc.NI 49.21%49.55%47.00%48.59%
Columbia Gas of Pennsylvania, Inc.NI 43.95%44.32%44.41%44.23%
Columbia Gas of Virginia, Inc.NI 55.48%56.31%57.47%56.42%
New Jersey Natural Gas Company NJR 44.81%44.55%41.13%43.49%
Northwest Natural Gas Company NWN 50.43%52.56%50.81%51.27%
Kansas Gas Service Company, Inc.OGS 38.63%39.67%36.45%38.25%
Oklahoma Natural Gas Company OGS 39.01%40.15%36.90%38.69%
Texas Gas Service Company, Inc.OGS 39.02%40.01%36.77%38.60%
Spire Alabama Inc.SR 41.34%35.65%33.18%36.72%
Spire Gulf Inc.SR 50.52%59.45%62.82%57.60%
Spire Mississippi Inc.SR 0.00%0.00%0.00%0.00%
Spire Missouri Inc.SR 46.04%43.32%40.95%43.44%
Notes:
CAPITAL STRUCTURE ANALYSIS
LONG-TERM DEBT RATIO [1]
[2] Natural Gas operating subsidiaries where data was unable to be obtained for 2021, 2020 and 2019 were removed from
the analysis.
LONG-TERM DEBT RATIO - UTILITY OPERATING COMPANIES
[1] Ratios are weighted by actual common capital, preferred equity, and long-term debt of Operating Subsidiaries.