IGC Comments.pdf

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EXECUTIVE OFFICES
INTERMOUNTAIN GAS COMPANY
555 SOUTH COLE ROAD. P.O. BOX 7608 . BOISE, IDAHO 83707 . [phone] . FAX: [phone]
Jean Jewell
Idaho Public Utilities Commission
472 W. Washington St.
O. Box 83720
Boise , 1083720-0074
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(T\CD 0October 28 , 2002
Re:IN THE MATTER OF A TWO-YEAR PILOT WINTER PROTECTION PROGRAM THAT
ESTABLISHES MINIMUM MONTHLY PAYMENTS DURING THE WINTER
MORATORIUM
IPUC CASE NO. GNR-02-
Dear Ms. Jewell:
In response to Commission Staff's Decision Memorandum , dated October 25 , 2002 , pursuant to
the above referenced case , Intermountain Gas Company respectfully requests that the
Commission also include in its consideration of the Pilot Winter Protection Program the
additional points contained in this letter.
Support for the Pilot - As the Staff's Decision Memorandum states Since February 2002 the
regulated utilities, Commission Staff, Department of Health and Welfare, and Community Action
Agencies have sought to address payment arrangement issues that culminated in this joint
Application Throughout the meetings held by this working group, the parties have sought to
balance the following existing issues:
Genuine sympathy for the financial impact heating costs can have on some customers
Significantly increasing bad debt and collection expenses at the utilities that all other
customers must pay
Desire to focus assistance efforts on those customers who are truly in need
Efforts of the Community Action Agencies to help their clients take responsibility for their
debts and develop good payment habits
Given that the different members of this working group often take opposing positions on issues
before the Commission , their ability to agree on this Application demonstrates both a recognition
of the above issues and the fairness of the proposed pilot program. In its letter to the
Commissioners dated October 11 , 2002 , The Board of the Community Action Partnership
Association of Idaho states We encourage the Public Utility Commission to approve this two-
year pilot program and we encourage all of the utilities to participate in the program.
Payment Example - The payment example given in both the Application and the Decision
Memorandum is intended to illustrate the significant difference in debt owed on March 1 by a
customer who makes some payments as opposed to a customer who chooses to make no
payments during the winter months. However, it overstates the monthly payments an average
Intermountain Gas customer would pay under this pilot program. For example , the average
Intermountain Gas RS-2 customer who qualified for the Winter Protection Program and had a
$100 beginning balance would have monthly winter payments of approximately $34.
The Application states The customer may use any source of funds/grants to satisfy the
payment requirements of the Winter Protection Program and Customers are encouraged to
apply for energy assistance programs including the Low-Income Heating Assistance Program
(LIHEAP) and Project Share Applying for and getting these funds will go a long way in
meeting the minimum payments requirements of this pilot program. Further, Intermountain Gas
remains committed to helping customers who are struggling to pay their bills. We continue to:
Support LlHEAP and other assistance programs
Counsel customers on where to seek assistance
Provide information on energy assistance through bill stuffers and on our web site
Provide level pay plans
Make payment arrangements
Additional Information - Over the past 8 months Intermountain Gas has actively participated
in the meetings with Commission Staff, other regulated utilities , Department of Health and
Welfare , and Community Action Agencies. Customer data as well as the points of view shared
by members of the working group culminated in the Application that was supported in the letter
mentioned above from the Board of the Community Action Partnership Association of Idaho.
Following is a summary of information shared by Intermountain Gas during the collaborative
effort:
A fundamental premise of receiving utility service , which underlies all of the Utility Customer
Relations Rules , is that customers have a responsibility to pay for the service
Bad debt and collection expense at Intermountain Gas the last two years has exceeded the
prior 1 O-year average by 130-150%
Currently tens of thousands of customers use Utility Customer Relations Rule 306 to avoid
paying winter heating bills without fear of disconnection of service
As a primarily seasonal utility Intermountain Gas' arrears grows to millions of dollars during
the winter months
Of over 11 000 accounts written off by Intermountain Gas this fiscal year for non-payment
only 5% qualified for energy assistance
The effort required to try and collect the bad debts from those customers who chose to take
unfair advantage of the Customer Rules interferes with our efforts to help the truly needy
among our customers
Heating-only customers (RS-1) represent 25% of our customers but approximately 50% of
our write-offs
Intermountain Gas stands ready, willing and able to implement the Pilot Winter Protection
Program on December 1 , 2002. If the Pilot is approved , Intermountain Gas will commit to
providing regular reports to Commission Staff that will help quantify the effectiveness of the
proposed Pilot program. Should you have any questions, or if I can be of additional assistance
please don t hesitate to contact me at 377-6064.
Sincerely,
Paul R. Powell
Sr. Vice President, Finance & Administration and CFO