990528_sw.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
RON LAW
TONYA CLARK
STEPHANIE MILLER
BEV BARKER
MADONNA FAUNCE
DAVID SCOTT
WORKING FILE

FROM: SCOTT WOODBURY

DATE: MAY 28, 1999

RE: CASE NO. INT-G-99-1 (Intermountain Gas)
ANNUAL GAS TRACKER (PGA)

On May 14, 1999, Intermountain Gas Company (IGC; Company) filed an Application with the Idaho Public Utilities Commission (Commission) for authority to place into effect new rate schedules that would result in an overall increase of approximately $9.6 million in its annualized revenues. The increase reflects a change in the Companys cost of gas and the elimination and/or imposition of a number of temporary gas and transportation cost adjustments, surcharges and credits. The Company in its filing also proposes to balance out its Purchased Gas Cost Adjustment (PGA), Account 186. The PGA Account is a deferral mechanism for over- and under-collections and for realized savings on spot market gas purchases.
The proposed adjustments reflected in the Application include changes in costs billed IGC by Williams Gas Pipelines-West (WGP-W) and other transportation companies, the elimination of temporary surcharges and credits (INT-G-98-4), an increase in the Companys weighted average cost of gas (WACOG), the benefits generated from the Companys segmentation of its firm capacity rights on WGP-Ws system, the inclusion of temporary surcharges and credits relating to gas and transportation related costs from the Companys deferred gas cost account (PGA Account 186), and an updated customer allocation of gas-related costs.
The Application proposes implementation of the following permanent and temporary changes, adjustments, surcharges and credits to IGCs tariff rates for natural gas service, sales and transportation:

Permanent Adjustments:
 INT-G-98-4 Elimination of Temporary Surcharges/Credits ($ 644,603)
 Change in WGP-W rates/charges $1,963,300
 Change in storage costs $ 457,385
 Cost of Gas Supply $5,677,983
Temporary Surcharges or Credits
Deferred Gas Costs (IGC PGA Acct 186)
 NWP Refund Docket No. RP93-5 ($649,565)
 Variable Cost Collection Adjustment ($ 417,248)
 Uncollected Gas Costs $5,195,949
 Market Segmentation ($2,189,891)
 Storage credit ($ 465,603)
Fixed Gas Cost Misc ($ 709,039)
As computed by the Company, the total requested increase in revenue on an annual basis is $9,637,020 or 8.46%. The net increase in sales gas revenues is $9,405,663 or 8.61%. The increase in T-1 transportation service revenues is $182,684 or 4.56%. The net increase in T-2 transportation service revenues is $48,673 or 6.52%. The annualized change in rates by class of service per Company calculation is as follows:

Gas Sales
Revenue Avg Increase (Decrease)
/Therm Avg Increase (Decrease)
% Change Proposed Avg Price
$/Therm
RS-1 Residential
$1,212,193
3.416¢
5.66%
$0.63757
RS-2 Residential
$4,928,297
4.854¢
9.94%
$0.53698
GS-1 Genl Svc
$ 3,265,173
3.883
8.55%
$0.49323
LV-1 Large Vol. * * T-1 tariff price plus the Weighted Average Cost of Gas (WACOG), $0.18252
(Compare WACOG INT-G-98-4: $0.15684) WACOG = total commodity cost of gas  total purchase therms
Transportation
Revenue Avg Increase (Decrease)
/Therm Avg Increase (Decrease)
% Change Proposed Avg Price
$/Therm
T-1 Transp.
$182,684
0.393
4.56%
$0.09003
T-2 Transp.
$ 48,673
0.224
6.52%
$0.03661
With the exception of the Industrial Class, IGC proposes to allocate the change in rates to each of its customer classes in accordance with its Purchased Gas Cost Adjustment tariff and approved cost-of-service methodology. (Ref. Case Nos. INT-G-95-1, INT-G-88-2, U-1034-137). Because there are no fixed costs currently recovered in the tailblock of IGCs T-1 tariff and because the proposed decrease in the T-1 tariff is related to fixed costs (except for TF-1 commodity charge), a cents-per-therm decrease is made only to the first two blocks of the T-1 tariff. All three blocks of IGCs proposed T-1 tariff have been adjusted to include WGP-Ws firm transportation TF-1 commodity charge. The proposed decrease in the T-2 tariff (except for TF-1 commodity charge) is fixed cost related and, therefore, a cents per therm decrease was made only to the T-2 demand charge. The commodity charge component of the T-2 tariff was adjusted to include WGP-Ws firm transportation TF-1 commodity charge.
Intermountain Gas requests that its Application be processed under Modified Procedure, i.e., by written submission rather that by hearing. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204. The Company has requested an effective date of July 1, 1999.
COMMISSION DECISION
Does the Commission agree that the public interest in this filing may not require a hearing to consider the issues presented and that the Application may initially be processed under Modified Procedure, i.e., by written submission rather than by hearing?

Scott D. Woodbury
Deputy Attorney General

bls/M:intg991_sw

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