modproc.app.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF INTERMOUNTAIN GAS COMPANY FOR AUTHORITY TO PLACE INTO EFFECT AN INCREASE IN ITS COMPOSITE DEPRECIATION RATE. )
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) CASE NO. INT-G-99-2

NOTICE OF APPLICATION

NOTICE OF MODIFIED PROCEDURE

NOTICE OF COMMENT/ PROTEST DEADLINE

YOU ARE HEREBY NOTIFIED that Intermountain Gas Company (IGC; Company) filed an Application with the Idaho Public Utilities Commission (Commission) on December 23, 1999, requesting authority to increase its composite depreciation rate from 3.98% to 4.18%. The Company also proposes to convert the recovery of a number of its general plant accounts to amortization as opposed to the current depreciation rate procedures utilizing a service life and net salvage factor.
The Company’s presently authorized composite depreciation rate of 3.98% was approved by the Commission in Case No. INT-G-96-7, Order No. 26813 dated February 24, 1997. In its Order the Commission stated:
As before, our level of comfort with the reasonableness of such depreciation rates is enhanced by periodic review, which the Company previously stated is required for its depreciation study methodology. Therefore, we find it reasonable that the Company continue to examine its depreciation rates and practices on three year intervals.…We also find it important to monitor and revisit this matter in three years.

Based on an updated depreciation study by AUS Consultants, the Company concludes that the current rate is under-depreciating its assets. The effect of the requested higher rate would be to increase IGC’s depreciation accrual and decrease IGC’s rate base by $334,522 annually. As proposed, the total annual depreciation accrual would increase to $10,286,070. Although the Company’s depreciation expense would increase under its proposal, the present Application does not request a related increase in rates. The Company has requested that the increase to the annual composite depreciation rate be made effective at the beginning of its fiscal year, October 1, 1999.
A four page summary of the depreciation study was included with the Company’s Application. The complete depreciation study with workpapers, which the Company states are voluminous, are available for inspection at IGC’s general business office, which is located at 555 South Cole Road, Boise, Idaho (208-377-6097).
With this depreciation study, Intermountain Gas is proposing to convert the recovery of a number of its general plant accounts to amortization as opposed to the current depreciation rate procedures utilizing a service life and net salvage factor. In 1997 the Company states the Commission approved Idaho Power Company’s request for such an amortization in Order No. 26937 in Case No. IPC-E-97-4. In this case, the Company proposes to establish similar amortization for the following Intermountain Gas accounts:
Account Numbers Account Name 391
393
394
395
397
398 Furniture and office equipment
Stores equipment
Tool, shop, and garage equipment
Laboratory equipment
Communications equipment
Miscellaneous equipment
These accounts, the Company states, consist of numerous assets of relative low dollar value which are time consuming to track. Many of these assets are used throughout Intermountain Gas’s operation making the record keeping even more difficult. The Company contends that amortization of these assets will reduce the accounting and record keeping burden for the Company.
Intermountain Gas Company requests that its Application be processed pursuant to the Commission’s Rules of Modified Procedure, i.e., by written submission rather than by hearing. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204. Staff has no objection to Modified Procedure but recommends that the comment period be extended to 30 days to permit sufficient time to obtain responses to production requests (formal and/or informal) and to provide adequate time for review and audit of the underlying depreciation study performed by AUS Consultants.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the Company’s Application. The Commission has preliminarily found that the public interest regarding the Company’s proposal to increase its composite depreciation rate and convert the recovery of a number of its general plant accounts to amortization may not require a hearing to consider the issues presented and that the Application may be processed under Modified Procedure, i.e., by written submission rather than by hearing. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that the Commission will not hold a hearing in this proceeding unless it receives written protests or comments opposing the use of Modified Procedure and stating why Modified Procedure should not be used. Reference IDAPA 31.01.01.203.
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or protests with respect to the Application and the Commission’s use of Modified Procedure in Case No. INT-G-99-2 is Tuesday, February 15, 2000. Persons desiring a hearing must specifically request a hearing in their written protests or comments.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received within the deadline, the Commission will consider the matter on its merits and enter its Order without a formal hearing. If comments or protests are filed within the deadline, the Commission will consider them and in its discretion may set the matter for hearing or may decide the matter and issue its Order on the basis of the written positions before it. Reference IDAPA 31.01.01.204.
YOU ARE FURTHER NOTIFIED that the Application and a four page summary of the depreciation study have been filed with the Commission and are available for inspection during regular business hours at the Commission offices. You are further notified that the complete depreciation study with workpapers, are available for inspection at IGC’s general business office, which is located at 555 South Cole Road, Boise, Idaho ([phone]). Written comments concerning this Application shall be mailed to the Commission and the Company at the addresses reflected below:

COMMISSION SECRETARY
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
Street Address for Express Mail:
472 W WASHINGTON ST
BOISE, ID 83702-5983 MICHAEL E. HUNTINGTON
VICE PRESIDENT, GOVERNMENTAL
AFFAIRS AND RESOURCE PLANNING
INTERMOUNTAIN GAS COMPANY
PO BOX 7608
BOISE, IDAHO 83707

MORGAN W. RICHARDS, JR.
MOFFATT, THOMAS, BARRETT, ROCK & FIELDS
PO BOX 829
BOISE, ID 83701
All comments should contain the case caption and case number shown on the first page of this document.
DATED at Boise, Idaho this _______ day of January 2000.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Myrna J. Walters
Commission Secretary

vld/N:INT-G-99-2_sw

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/ PROTEST DEADLINE 1

Office of the Secretary
Service Date
January 12, 2000