HomeMy WebLinkAbout960416.docxDECISION MEMORANDUM
TO:COMMISSIONER NELSON
COMMISSIONER SMITH
COMMISSIONER HANSEN
MYRNA WALTERS
TONYA CLARK
DON HOWELL
STEPHANIE MILLER
DAVE SCHUNKE
MADONNA FAUNCE
KEITH HESSING
GARY RICHARDSON
WORKING FILE
FROM:SCOTT WOODBURY
DATE:APRIL 16, 1996
RE:CASE NO. INT-G-96-2
NEW TARIFF—SCHEDULE T-3 INTERRUPTIBLE DISTRIBUTION TRANSPORTATION SERVICE
MODIFICATION OF LV-1, T-1 AND T-2 TARIFFS
CHANGE TO GENERAL SERVICE PROVISIONS
On April 5, 1996, Intermountain Gas Company (IGC; Company; Intermountain Gas) filed an Application with the Idaho Public Utilities Commission (Commission) in Case No. INT-G-96-2 requesting authority to place into effect a new Schedule T-3 interruptible distribution transportation service tariff, to modify its existing LV-1 large volume firm sales, T-1 firm transportation and T-2 firm transportation with maximum daily demands service tariffs, and to change its General Service Provisions. The Company contends that its current tariffs and general service provisions do not adequately address the issues in today’s open access environment. The Company requests that its Application be processed under Modified Procedure (reference Commission Rules of Procedure, Rules 201-204) and be approved without suspension for effective date May 1, 1996.
Intermountain Gas states that its proposed T-3 offering is an attempt by the Company to better manage its firm capacity rights on the Northwest Pipeline system and to provide its industrial customers with an additional choice regarding management of their natural gas usage. When there is adequate capacity on the Company’s distribution system, the proposed T-3 tariff authorizes customers to enter contracts for 200,000 therms or more per year for interruptible transportation service. An annual minimum charge of $30,000 is required. The services does not include the cost of gas supply or interstate pipeline capacity, and it may not be used concurrently with another transportation on contiguous property. The Company maintains that the T-3 tariff will serve to minimize the need to purchase incremental capacity on the interstate pipeline system, will help to increase IGC’s load factor and will help keep costs down for all Intermountain Gas customers.
The Company reports that several of its contract customers are anticipating growth in their daily natural gas needs which, in turn, may require Intermountain to procure additional peak day interstate capacity. The same customers, if given proper economic incentive, IGC states, have the ability to limit their usage either by using their existing alternative fuel capability or by managing their production schedules and moving production away from the IGC’s system peak day. By allowing the customer to have more options for the management of its natural gas needs and the economic consequences associated therewith, the Company maintains that an optimization of distribution and interstate transportation capacity needs will be achieved. Minimizing the purchase of expensive peak day delivery capability IGC contends is the least cost alternative for all the Company’s customers.
The Company maintains that until approved it is unable to determine the marketability of the proposed T-3 tariff or the related effect of such tariff on earnings.
The proposed changes to the existing LV-1 firm sales tariff permit a customer to sign a service contract for terms greater than one year. Language changes clarify that contract minimum shortfalls are to be billed at the higher GS-1 rate. LV-1 customers by tariff change are required to nominate a maximum daily firm quantity (MDFQ). By added language the tariff notes that embedded in LV-1 service is the cost of purchased gas per the Company’s PGA, firm interstate pipeline reservation charges, and distribution system costs.
The proposed changes to the existing T-1 firm transportation tariff clarify the need for a customer to sign a minimum one-year contract for firm transportation service in excess of 200,000 therms per year. Language is added to clarify the penalty provision that will be utilized if less than 200,000 therms per year are transported. T-1 customers by tariff change are required to nominate a maximum daily firm quantity. The character of service section is moved from the tariff to the General Service Provisions, Section D. By added language the tariff notes that embedded in T-1 service is the cost of firm interstate pipeline reservation charges and distribution costs.
The proposed changes to the existing T-2 firm transportation service with maximum daily demands tariff clarify the need for a customer to sign a minimum one-year contract for firm transportation service in excess of 200,000 therms per year. Language is added to clarify the penalty provision that will be utilized if less than 200,000 therms per year are transported. Stricken language is moved from the tariff to the General Service Provisions Section D. By added language the tariff notes that embedded in T-2 service is the cost of firm interstate pipeline reservation charges and distribution system costs.
Intermountain Gas proposes a new General Service Provision Section D applicable to all contract customers. Included language is similar to that found in existing contracts. Some of the proposed language in Section D has been moved from the Company’s other tariffs. Section D includes, in part, definitions relating to service (Section 2), restriction on service requests and substitutions (Section 3), priority of service (Section 4), dispatch and nomination of customer-owned gas (Section 5.2), imbalance and penalty provisions (Section 5.3(a)), declared entitlement periods (Section 5.3(b)), unauthorized over run and under run penalties (Section 5.3(b)(i)(ii)), responsibility for costs (Section 5.4) and measuring equipment (Section 6).
Intermountain Gas also proposes changes to existing General Service Provisions, Section A. Rule 4.4 affirms the general rule relating to the binding effect of orders, laws, and rules of authorities having jurisdiction and adds the term “user fee” as the result of amendments to Idaho Code § 50-329(A) during the last legislative session. A portion of § 5.1 and also § 16.1 have been moved to Section D of the General Service Provisions which applies to contract customers. Section 6.5 provides language to clarify when service may or may not be combined under one bill on contiguous property. Section 17.2 (previously § 18.2) has been amended to change “industrial” customer to “contracted” customer. Section 17.3 (previously §18.3) is being amended to define company responsibility for damages. Finally, minor changes have been made to § 18 (previously § 19), including the addition of the term “lockout” as an example of force majeure.
The Company contends that if approved, its proposed tariffs and General Service Provisions will continue to be cost-justified and will be fair, just, reasonable, and nondiscriminatory.
Commission Decision
The Company has requested expedited treatment of its Application under Modified Procedure. The Application was filed on April 5. The Company requests a May 1, 1996, effective date. Under Idaho Code § 61-307, good cause must be shown to allow changes in rates and service on less than 30 days notice. The Company outside of its Application relates that many of its customer contracts expire on April 30.
Does the Commission find Modified Procedure to be appropriate in Case No. INT-G-96-2.
Only 14 days remain until the Company’s proposed May 1 effective date. The scheduled decision immediately prior to May 1 is next Thursday, April 25. Does the Commission find that IGC has demonstrated just cause to shorten the normal 21-day comment period under Modified Procedure?
If not, should the proposed effective date be suspended?
What is the Commission’s procedural preference?
Scott Woodbury
vld/M:INT-G-96-2.sw