20070918Northwest Industrial Gas Users.pdf

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September 17 , 2007
VIA FEDERAL EXPRESS (OVERNIGHT)
AND ELECTRONIC MAIL
Ms. Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, ill 83720-0074
Re:Idaho Public Utilities Commission Case No. INT-07-
Dear Ms. Jewell:
Enclosed for filing with this Commission is a signed original plus seven copies of the
Northwest Industrial Gas Users' (NWIGU) Comments in the above-referenced case. Copies
NWIGU's Comments have been sent to parties listed on the service list.
If you have any questions or require additional information regarding these comments
please contact me at [phone].
Thank you for your professional courtesies.
Very truly yourstr~
Edward A. Finklea
EAF:wc
Enclosure( s)cc: Paul R. Powell (via regular mail)
Stephen R. Thomas (via regular mail)
R. Scott Pasley (via regular mail)
Steven Gray (via regular mail)
Conley E. Ward, Jr. (via regular mail)
Paula E. Pyron (via regular mail)
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Suite 2000, 1001 SW Fifth Avenue, Portland, Oregon 97204-1136 . Phone: [phone] . Fax: [phone] . wwwcablehuston.com
Edward A. Finklea, OSB No. 842163
CABLE HUSTON BENEDICT
HAAGENSEN & LLOYD, LLP
1001 SW Fifth Avenue, Suite 2000
Portland, Oregon 97204-1136
Telephone: [phone]
Facsimile: [phone]
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""'-1:'li"IV! ,)tr An J'
iD/\1'!C) PUBLIC
UTILrnES COi'dMiSSIOl
Attorney for the Northwest Industrial Gas Users
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of
INTERMOUNTAIN GAS COMPANY
for the Authority to Change Its Prices
Case No. INT-07-
COMMENTS OF THE
NORTHWEST INDUSTRIAL
GAS USERS
In response to the Notice of Application, Modified Procedure and Comment Deadline
issued by the Idaho Public Utilities Commission ("Commission ) as Order No. 30413 on
August 22, 2007 for the August 16, 2007 Purchased Gas Adjustment ("PGA") filing of
Intermountain Gas Company ("Intermountain ), the Northwest Industrial Gas Users ("NWIGU"
respectfully submit the following comments for the Commission s consideration.
NWIGU is a non-profit trade association comprised of thirty-five end-users of
natural gas with major facilities in the States of Oregon, Washington, and Idaho. NWIGU
members include diverse industrial interests, including food processing, pulp and paper, wood
products, aluminum, steel , chemicals , electronics, and aerospace. The association provides an
informational service to its members and participates in purchase transportation services from
Northwest Pipeline Corporation, and from Gas Transmission Northwest Corporation either
directly or through capacity release from marketers, and purchase sales and transportation
Page 1 - COMMENTS OF THE NORTHWEST INDUSTRIAL GAS USERS
services from local distribution companies ("LD Cs ), including Intermountain, that acquire
service from these interstate pipelines.
NWIGU appreciates this opportunity to provide comments in this proceeding
and requests that communications in reference to these comments be addressed to:
Edward A. Finklea
Chad M. Stokes
Cable Huston Benedict Haagensen & Lloyd, LLP
1001 SW Fifth Avenue , Suite 2000
Portland, Oregon 97204-1136
Telephone: [phone]
Facsimile: [phone]
Mail: efinklea~cablehuston.com
cstokes~cab lehuston. com
And to
Paula E. Pyron
Executive Director
Northwest Industrial Gas Users
4113 Wolf Berry Court
Lake Oswego, OR 97035-1827
Telephone: [phone]
Facsimile: [phone]
Mail: ppyron~nwigu.org
In its 2007 PGA filing, Intermountain seeks to pass through changes in gas related
costs as appropriate to each of its customers classes, including changes in costs with upstream
pipelines, a decrease in Intermountain s weighted average cost of gas ("W ACOG"), an updated
customer allocation of gas related costs and the utility s deferred gas cost accounts, including the
establishment of a temporary tracking adjustment for the collection of lost and unaccounted
L&U") gas on its distribution system. As part of the filing, Intermountain proposes to decrease
its W ACOG by 4.917 cents per thermo
After thorough review of Intermountain s filing and work papers, NWIGU is
satisfied that the proposed adjustments represent fair and reasonable allocations of gas costs for
Page 2 - COMMENTS OF THE NORTHWEST INDUSTRIAL GAS USERS
recovery from Intermountain s customers as presented in the August 16 2007 filing. NWIGU
requests, however, that the Commission condition its approval of the new temporary tracking
adjustment for the collection of L&U gas upon a maximum level of 2% L&U gas eligible for
potential recovery as this mechanism is trued up in future PGA filings by Intermountain.
NWIGU members, many of whom are transportation customers of Intermountain, are impacted
significantly by the imposition of this new adjustment at a 0.191 cent per therm recovery on all
industrial throughput. NWIGU's members view this adjustment as reasonable for recovery in the
filing, given the differential in gas costs between the factor embedded in rates from 1985 (when
gas was $0.33 per therm) and current and prospective gas commodity markets. NWIGU also
recognizes the efficiency with which Intermountain maintains its system in its current operations
with an L&U factor of 0.7% (projected total throughput divided by projected L&U volumes for
2007). NWIGU recognizes that the new L&U adjustment is allowing recovery only for
incremental L&U gas costs on the distribution system, which will be trued up going forward with
future annual PGA filings by Intermountain.
NWIGU members do not want the creation of this L&U recovery mechanism
however, to create any contrary incentive to the ongoing and conscientious efforts that
Intermountain undertakes to manage and operate its distribution system to minimize lost and
unaccounted gas. Accordingly NWIGU respectfully requests that the Commission condition its
approval of this recovery mechanism in the PGA filing with a ceiling for future recovery and that
Intermountain not be allowed to recover L&U gas above a 2% L& U threshold in future true-ups
of this temporary adjustment. NWIGU would submit that a level ofL&U gas above that
threshold would be indicative of the potential of inadequate operations and maintenance
procedures. In no manner is NWIGU suggesting that Intermountain is not currently operating its
Page 3 - COMMENTS OF THE NORTHWEST INDUSTRIAL GAS USERS
system appropriately. NWIGU members appreciate that appropriate operations and maintenance
quality is pursued on Intermountain s system today and desires for that effort to continue with
the same diligence in the future. NWIGU is simply asking the Commission to limit future
recovery under this mechanism to a reasonable ceiling of 2%L&U gas.
NWIGU does not oppose the use of Modified Procedure in this proceeding under
IDAP A 31.01.01.203 and does not request a hearing scheduling for the Commission
consideration of its comments herein.
WHEREFORE, premises considered, NWIGU respectfully submits these comments and
requests that the Commission condition approval of the proposed L&U temporary tracking
adjustment in Intermountain s August 16 2007 PGA filing to a factor that is capped at a 2% lost
and unaccounted gas level in prospective annual true-ups that will be used to credit or surcharge
Intermountain s customers as may be appropriate.
DATED in Portland, Oregon this 17th day of September, 2007.
Respectfully submitted
Edward A. Finklea
By tJ~~~' Edward A. Finklea
Attorney for the Northwest Industrial Gas Users
Page 4 - COMMENTS OF THE NORTHWEST INDUSTRIAL GAS USERS
CERTIFICATE OF SERVICE
I CERTIFY that I have on this day served the foregoing document upon all parties of
record in this proceeding by mailing a copy properly addressed with first class postage prepaid.
Paul R. Powell Stephen R. Thomas
Intermountain Gas Company Moffatt, Thomas, Barrett
O. Box 7608 Rock & Fields, Chartered
Boise, ID 83707 O. Box 829
Boise, ID 83701
R. Scott Pasley Steven Gray
R. Simplot Company R. Simplot Company
O. Box 27 O. Box 27
Boise, ID 83707 Boise, ID 83707
Conley E. Ward, JR.Paula E. Pyron
Givens, Pursley, Webb & Huntley Northwest Industrial Gas Users
277 N. 6th Street, Suite 200 4113 Wolf Berry Court
O. Box 2720 Lake Oswego, OR 97035-1827
Boise, ID 83701
DATED in Portland, Oregon, this 1 ih day of September, 2007.
~i.fLl~AG
Edward A. FInklea OSB # 84216
Chad M. Stokes OSB #00400
Cable Huston Benedict Haagensen & Lloyd LLP
1001 SW Fifth Ave., Suite 2000
Portland, OR 97204-1136
Telephone: [phone]
Facsimile: [phone]
Mail: efinklea((i)chbh.com
cstokes((i)chbh.com
Of Attorneys for the
Northwest Industrial Gas Users
PAGE 1 - CERTIFICATE OF SERVICE