HomeMy WebLinkAbout20161216Reading Direct with Exhibit 501.pdfRE CEIVE D
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BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
INTERMOUNTAIN GAS COMPANY FOR THE ) CASE NO. INT-G-16-02
AUTHORITY TO CHANGE ITS RA TES AND )
CHARGES FOR NATURAL GAS SERVICE TO )
NATURAL GAS CUSTOMERS IN THE STATE )
_O_F_I_DAH_O ____________ )
DIRECT TESTIMONY AND EXHIBITS OF
DR. DON READING
ON BEHALF OF
THE AMALGAMATED SUGAR COMPANY, LLC
DECEMBER 16, 2016
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PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.
My name is Don Reading and my business address is Ben Johnson Associates, 6070 Hill
Road, Boise, Idaho. I am Vice President and Consulting Economist for Ben Johnson
Associates.
HA VE YOU PREPARED AN EXHIBIT OUTLINING YOUR QUALIFICATIONS
AND BACKGROUND?
Yes. Exhibit No. 501 serves that purpose.
ON WHOSE BEHALF ARE YOU TESTIFYING IN THIS DOCKET?
I am testifying on behalf of The Amalgamated Sugar Company LLC (Amalgamated).
Amalgamated produces sugar from sugarbeets grown by over 750 member/growers of its
parent cooperative the Snake River Sugar Company. Amalgamated is the second largest
manufacturer of sugar from sugarbeets in the United States and sells sugar throughout the
country. Amalgamated's over 750 grower/members raise sugarbeets on over 180,000
acres of irrigated land, primarily in Southern Idaho, producing approximately 7,000,000
tons of sugarbeets annually. These sugarbeets are processed in factories that are large
scale, heavy industrial facilities that operate 24/7. Amalgamated's three factories
(Nampa, Twin Falls and Paul) process sugarbeets during the fall and winter, produce
sugar 11 months of the year, and operate molasses separators year-round. Energy
consumption (particularly natural gas consumption) is highest during the sugarbeet
processing months in the fall and winter. Sugarbeets are processed into both refined
sugar and animal feed products. The sugarbeet industry contributes almost 2% to the
Idaho gross domestic product each year and represents almost 10% of Idaho's total cash
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receipts from crops.
WHAT IS THE PURPOSE AND GENERAL CONCLUSION OF YOUR
TESTIMONY IN THIS CASE?
I have been asked by Amalgamated to testify as to the reasonableness of the requested
rate design changes proposed by the Intermountain Gas Company ("Gas Company" or
"I GC") and also to address the need for the Gas Company to implement an industry
standard vested interest refund program for customer funded line extensions and
improvements. I conclude that due to the Gas Company's failure to keep up with changes
in both customer usage patterns and its failure to keep its rate design current and relevant,
that any rate design changes should be phased in over a period of years in order to
ameliorate rate shock and to allow customers time in which to adjust their usage/budgets
and consumption patterns in order to respond to the Gas Company's radically
reconfigured rate design. I also conclude that the Gas Company should implement a
vested interest refund program that conforms to modem utility practices.
WHEN WAS THE GAS COMPANY'S LAST GENERAL RATE CASE?
The last general rate case for the Gas Company was in 1985, 31 years ago.
IN YOUR EXPERIENCE IS IT UNUSUAL FOR A LARGE INVESTOR-OWNED
UTILITY LIKE THE GAS COMPANY TO ALLOW OVER THREE DECADES
TO LAPSE BETWEEN GENERAL RA TE CASES?
Yes, it is both unusual and it has consequences for the company and its ratepayers.
BY "CONSEQUENCES" DOES THAT MEAN IT IS DETRIMENTAL TO WAIT
SO LONG BETWEEN RA TE CASES?
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Not entirely. Certainly the Gas Company should be commended for keeping its costs
down, in part by reducing employee counts on a per customer basis and running an
efficient shop. On the other hand, customers have built usage patterns, and even
investment in plant, based on thirty years of experience/expectations with the existing
rate design. If over those thirty years rate design changes were called for, the customers
of the Gas Company were not made aware of those pending changes and as a result have
not been able to plan for or budget capital expenditures to accommodate those pending
rate design changes.
HAS THE GAS COMPANY BEEN ABSORBING INCREASED COSTS OVER
THE LAST THIRTY YEARS?
No. The Gas Company has not been absorbing all its increased costs at the expense of its
Investors over of the last thirty years. Changes in its single largest expense, gas
commodity, are passed through to its ratepayers annually on a dollar-for-dollar basis. In
essence, this case is about the cost to deliver the commodity (natural gas) and not about
the cost of the commodity itself. Because the Gas Company does not incur costs to
produce the commodity it delivers, it is more akin to a regulated distribution only electric
utility than a fully integrated electric utility or even a fully integrated water utility, both
of which incur commodity production costs to varying degrees.
WHAT ARE YOUR OVERALL IMPRESSIONS OF THE GAS COMPANY'S
FILING?
The General Rate Case filed on August 12, 2016, asks for an increase in revenues of
$10.2 million or 4.06% for IGC's 334,650 customers. It contains some significant and far
reaching changes to the rate structure for the various rate classes. The percentage change
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in the rates proposed by the Company has a widely disparate impact on not just various
customer classes but also customers within a given rate class.
WHAT IS THE IMPACT ON YOUR CLIENT, THE AMALGAMATED SUGAR
COMPANY?
Amalgamated is a Large Volume and Transportation customer. For this class of
customers, the Company is proposing, for the first time, a demand charge, based on a
Maximum Daily Firm Quantity (MDFQ) that is nominated by the customer. The MDFQ
quantity is nominated in a contract between IGC and the customer and is in effect
throughout the term of the contract. The customer in turn pays the Gas Company each
month for the full amount of its MDFQ regardless of whether that full amount is
consumed.
IN WHAT WAY IS THIS A CHANGE IN THEW AY IGC HAS BEEN DOING
BUSINESS OVER THE LAST THIRTY YEARS?
All of the Gas Company's charges, up to now, have been based on the actual volume of
natural gas consumed by its customers. The imposition of a demand charge will produce
a significant amount of revenue for IGC and will have repercussions on the rates for other
services. This dramatic change in rate design can have a significant impact on customer
rates depending on the usage pattern of each individual customer
PLEASE EXPLAIN?
With the introduction of the new demand charge the volumetric charges per therm are
proposed to be reduced significantly by from 65% to 75% depending on the usage block
for the T-4 rate class. In advocating for the movement from the current-volume-usage
only rate design, the Gas Company is basing its proposed rate design on its preferred
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cost-of-service (COS) study. The end result is the movement to a MDFQ demand charge
design in a single step, based solely on an implementation to the full COS, as filed by the
Company.
IN YOUR OPINION IS THE COMPANY'S PROPOSAL A REASONABLE OR
TYPICAL RA TE DESIGN CHANGE?
As a Phd Economist, I am very comfortable and often supportive of rates reflecting costs
such as the imposition of some level of demand charges to recover fixed/demand related
costs. However, as an expert in utility rate design and with several decades of experience
in the field, I must conclude that this one step dramatic rate design change that is
proposed after 31 years with no change in the rate structure is decidedly unreasonable.
IF YOU ARE GENERALLY SUPPORTIVE OF DEMAND CHARGES TO
RECOVER DEMAND RELATED COSTS, THEN WHY DO YOU CONCLUDE
THAT IGC's PROPOSED MDFQ DEMAND CHARGE IS UNREASONABLE?
One of the fundamental theories behind utility rate design is to properly price each
distinct commodity such that the customer can make rational economic decisions in
response to accurate price signals. Rational responses to increased price signals such as
proposed by IGC include such measures as, (1) increasing the price at which the
ratepayer's own products (sugar) are sold into the market, (2) altering usage patterns to
ameliorate the increased costs such as changing production times or methods, (3)
switching to a different product such as coal or electricity, (4) moving production to a
lower cost facility or location, and/or (5) even choosing to cease operations.
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WHAT IS THE COMMON THEME AMONG THESE RATIONAL ECONOMIC
RESPONSES TO INCREASED PRICE SIGNALS?
Many such choices are interdependent and often a rational economic response involves a
combination of several of the above. However, what all of these possible responses have
in common is that they typically cannot happen instantly, and they never take place in a
vacuum. Unfortunately, the Gas Company's proposal, assuming the cost of service study
is 'accurate,' is asking its customers to respond to these dramatic changes instantly, in a
vacuum, and with no advance notice.
WHAT IS THE TERM OF ART IN REGULATED UTILITY JARGON FOR
WHAT YOU ARE DESCRIBING?
Rate shock, which frankly is very descriptive of the Gas Company's proposal. IGC has
simply not proposed any mitigation for those customers facing 'rate shock' from the
proposed new rate structure.
HOW DOES THE GAS COMP ANY ADDRESS THIS PROBLEM?
IGC witnesses in their testimony use quotes from ratemaking experts (Bonbright for
example) as guiding ratemaking principles. They assert that they are using sound rate
making principles in their proposed rate design. [Terzic p. 7, Blattner p 19-20] However
nowhere in the filed testimony is there a mention of 'rate shock' as one of the
cornerstone's of sound rate design.
WHAT IS 'RATE SHOCK' AND HOW DO REGULATORY COMMISSIONS
TYPICALLY ADDRESS IT?
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There is no bright line test to identify rate shock; the Edison Electric Institute has
described it as "the pain associated with large rate increases." The Federal Energy
Regulatory Commission has identified increases as low as 29% to be "rate shock." 1
Fortunately for this Commission, mitigation of rate shock in this case does not call for a
balancing of the interests of the utility in being made whole in terms of recovery of costs
and the interests of the ratepayer in terms of avoiding the "pain associated with large rate
increases."
HOW IS IT THAT THE COMMISSION CAN A VOID RA TE SHOCK IN THIS
CASE AND STILL MAKE INTERMOUNTAIN GAS WHOLE?
Even if the Commission were to grant the Gas Company's entire requested rate increase
request, the overall rate increase would only be around four percent. Certainly not a
shocking number. The rate shock to be avoided in this case is caused by a radical
departure from decades of recovery of fixed costs through volumetric charges to the
proposed collection of all fixed costs through a demand charge that has heretofore never
been assessed. The most common method of addressing rate shock, assuming the
underlying increase is justified in the first place, is to find a way of "deferring or phasing
in rate increases."2
WHILE NOT CALLING IT RA TE SHOCK, DIDN'T A COMPANY WITNESS
19 DISCUSS RATE CONTINUITY AS AN IMPORTANT PRINCIPLE OF RATE DESIGN?
1 Rate Shock Mitigation, Edison Electric Institute, June 2007 at p. 3. FERC Docket No.
RM81-38; Order No. 298, 48 FR 24,323 at Fn 47.
2 Rate Shock Mitigation, Edison Electric Institute supra at 3.
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Yes. IGC witness Blattner states that her understanding of good rate design principles
should include rate continuity which she defines as, "Rate continuity requires that
changes to the rate structure should be gradual allowing customers to modify their usage
patterns over time." (Emphasis added) [Blattner, p, 31 lines 14-16]
DID IGC's WITNESSES FULLY EXPLAIN THE IMPACT OF ITS RA TE
DESIGN PROPOSAL ON ITS LARGE INDUSTRIAL CUSTOMERS?
No. For example, Gas Company witness Swenson at page 9 in his testimony asserts, that
given his review, that some T-4 customers with high load factors will 'experience large
decreases' and those customers with the lowest load factors "may experience small
increases."
Based on my review of projected T-4 customer billing based on 2015 billed
consumption, current MDFQs and the proposed demand and volumetric rates, T-
4 customers with relatively high load factors will experience larger decreases,
customers with lower load factors will experience smaller decreases and, in some
cases, T-4 customers with the lowest load factors may experience small increases,
in annual bills.
Mr. Swenson obviously did not review carefully all T-4 customers or he could not have
concluded some low factor customers would only 'experience small increases'.
PLEASE EXPLAIN?
The rate increase for the Amalgamated Sugar Company, a T-4 customer, is anything but
"small." Based on the past 12 months billings (December 2015 through November
2016], using Amalgamated's originally nominated MDFQ, it would have its rates
increase by $893 ,529 or a 72.2% increase if the Company's proposed rate design and
increase were to be approved by the Commission.
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Amalgamated Bills Increase Over the Past 12
Months Under lntermountain Gas Proposal:
Original MDFQ
Original Dollar Percentage
Facilit~ MDFQ Increase Increase
Nampa 155,000 $240,990 55.8%
Twin Falls 191,000 $373,093 89.9%
Paul 29,000 $225,446 71.4%
TOTAL 375,000 $839,529 72.2%
Source: Amalgamated Second Production Request #4.
IGC HAS ALLOWED ITS TRANSPORTATION CUSTOMERS TO ADJUST
THEIR ORGINAL ESTIMATES OF MDFQ, HA VE YOU USED THOSE
ADJUSTED V ALOES IN THE CALCULATION OF THE INCREASE IN
BILLINGS IN THE TABLE ABOVE?
Yes. IGC provided a calculation of the bill changes over the past 12 months in its
Response to Amalgamated Production Request #4. Those are the values used in the above
table with the exception of the Nampa facility. In their Response #4, IGC assumed the
Nampa plant had adjusted their MDGQ down to 80,000 therms from the original estimate
of 155,000 therm s. Amalgamated, however, has informed me that there will be no
change from the original estimate of MDGQ for the Nampa plant. Therefore, the bill
change amounts set forth in my testimony for that facility are based on 155,000 MDFQ
not the 80,000 provided in Production Request #4. Amalgamated's MDFQ estimates are
based, in part, on plans to replace coal consumption with natural gas for obvious
environmental reasons. The Gas Company's proposed rate design changes in this case
may cause a reevaluation of those plans.
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With the lower nominated MDFQ for Arnalgamated's Twin Falls and Paul facilities, and
under IGC's proposed rate changes, the overall rate increase would still be $563,494, for
an overall increase of 48.5%.
Amalgamated Bills Increase Over the Past 12
Months Under lntermountain Gas Proposal:
Adjusted MDFQ
Adjusted Dollar Percentage
Facilit:t MDFQ Increase Increase
Nampa 155,000 $240,990 55.8%
Twin Falls 160,000 $274,258 66.1%
Paul 75,000 $48,246 15.3%
TOTAL 390,000 $563,494 48.5%
Source: Amalgamated Second Production Request#4, with
Nampa at Original MDFQ.
WHAT ADDITIONAL INFORMATION DID INTERMOUT AIN GAS PROVIDE
TO AMALGAMATED IN PRODUCTION RESPONSE #4?
The Gas Company also provided a comparison of the bills based on the current rate
design and that proposed by IGC in this case. IGC in this additional calculation used the
"volumetric charge that would be necessary to arrive at the Gas Company's filed
customer class specific revenue requirement". This volumetric increase appears to be
about 3.8% over the volume blocks. The Gas Company appears to assert that because
transportation customers have adjusted their estimates of MDFQ downward there will be
less collected in the demand charge. Hence, according to the Gas Company, there needs
to be an increase in the charge per therm to make up the difference in the cost of service
estimate in the transportation class's revenue requirement.
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DO YOU HAVE A RESPONSE TO THE CONTENTION THAT BECAUSE
TRANSPORTATION CUSTOMERS HA VE REVISED THEIR MDFQ DOWN
THERE SHOULD BE AN INCREASE IN THE RA TE PER THERM?
Because a cost of service study allocates costs among customer classes based on both
demand and the volume of gas, any change in the assumed input of demand for any given
class will impact all other classes. Therefore, a valid cost of service study should be re
estimated in order to judge what impact the decrease in MDFQ's would have on the
classes
HAS THE GAS COMPANY BEEN COMPLETELY OBLIVIOUS TO THIS
PROBLEM?
Not entirely. As stated above, IGC has not offered any mitigation proposal to ease the
rate shock for those firms most severely impacted by the Gas Company's rate design
proposal. However, the Gas Company did offer a two-year phase in when it initially
offered the T-4 rate schedule:
When the Company first implemented the T-4 Rate Schedule, it was believed that
many customers would desire to switch to T-4 service and in fact, the majority of
the large volume industrials did switch to T-4. In order to not saddle remaining
customers with the cost of interstate capacity that Intermountain held on behalf of
those customers migrating to T-4, the Exit Fee provision required those T-4
customers to pay for some of that capacity cost over a two-year period. Since
most of the large volume industrials migrated to transport years ago and most of
the remaining LV-1 customer are relatively small, the amount of capacity that
would be freed up by one of the customers migrating to transport is largely
insignificant and so the Company proposes to eliminate this provision. [Swenson,
p. 9, 10]
As the Gas Company did when it introduced T-4 rates, Amalgamated is requesting a
phase in of IGC's rate design structure proposed in this Docket.
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WHAT IS YOUR EXPERT RECOMMENDATION FOR AMALGAMATED IN
RESPONSE TO THE GAS COMPANY'S PROPOSED RA TE DESIGN?
On Amalgamated Sugar's behalf, I propose a measured phase-in to mitigate the rate
design impact of the Gas Company's proposed rate increase. Another rate design
structure that should be considered is to offer transportation customers a seasonal rate
option. I realize the Gas Company, in this filing, is advocating the elimination of seasonal
rates for its residential and general service customers. However, given the fundamental
change in rate design being proposed by IGC, a variety of rate structures should be
explored going forward that would meet the needs of both the Gas Company and its
customers.
PLEASE EXPLAIN?
I should note that my recommendations are based on the assumption that the Commission
adopts the Gas Company's cost of service study as well as its rate design proposals.
WHY ARE YOUR RECOMMENDATIONS BASED ON AN "ASSUMPTION"?
I have not conducted an independent evaluation of the details of the Gas Company's
recommended cost of service study. Such an endeavor is extremely time consuming and
expensive and beyond the scope of Amalgamated's budget for prosecuting this rate case.
I should also note that all cost of service studies, require the use of many inputs that are
based on judgment calls. That is why cost of service studies are often referred to in my
profession as much art as they are science.
WITH THAT ASSUMPTION IN MIND, WHAT IS YOUR SPECIFIC
RECOMMENDATION IN THIS CASE?
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I recommend that, if the Commission adopts IGC's cost of service study, that its effects
should be implemented on an incremental basis.
BY INCREMENTAL, DO YOU MEAN OVER A SET PERIOD OF TIME, SUCH
AS SEVERAL YEARS?
No. The results of this cost of service study, if adopted, should be implemented over the
next five Intermountain Gas Company general rate cases.
IF THE GAS COMPANY ONLY FILES A GENERAL RATE CASE EVERY
THIRTY YEARS, WOULDN'T YOUR PROPOSED IMPLEMENTATION
PERIOD BE UNREASONABLY LONG?
The timing and frequency ofrate cases are uniquely in the control of the utility. Five
general rate cases over thirty years would result in a case every six years. That is not an
unreasonable time period in which to correct for the last thirty years of rate design
neglect on the Gas Company's part.
ARE THERE OTHER REASONS FOR A RELATIVELY LONG
IMPLEMENTATION PHASE IN PERIOD FOR THIS NEW RA TE DESIGN
PROPOSAL?
Yes. Due to the radically changed MDFQ rate design proposed by the Gas Company I am
confident that customers will adjust their usage patterns. Those changes will, in tum,
change the input data to the COS. Those changed input data will in tum alter the
conclusions in the cost of service study. This becomes an iterative process with new
changes causing new changes and on and on. It is not a static, moment in time process.
As customer usage patterns change, cost of service responsibilities will also change. It
therefore makes sense not to adopt a single cost of service study result and fully
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implement it as if it were, and will constantly remain, the last and final word on the
subject.
WHAT IS THE OTHER ISSUE AMALGAMATED IS ADDRESSING IN THIS
DOCKET?
Amalgamated is also proposing the implementation, for the first time for this utility, of a
vested interest tariff for customer funded line extensions and system improvements.
WHAT IS THE REASON FOR AMALGAMATED'S VESTED INTEREST
REFUND PROPOSAL?
Amalgamated has been funding line extensions and system improvements for many
years. It simply wants to protect its investment should other customers take advantage of
the lines or other system improvements that Amalgamated has paid for.
WHAT ARE THE PARAMETERS YOU RECOMMEND FOR THE VESTED
INTEREST REFUND PROPOSAL YOU ARE MAKING?
A properly designed line extension tariff should include the standard, accepted and
approved principles used by regulated utilities and approved by this Commission for
utilities like Idaho Power Company and United Water. It should include such provisions
as:
1. Definitions for Additional Applicants, Points of Delivery, and Service
Attachments,
11. Vested Interest Charges, Vested Interest Refunds, and Vested Interest Portions
allocations,
111. Formulas that define the apportionment of cost,
1v. Vested Interest Refunds.
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1 Q. ARE YOU RECOMMENDING THE COMMISSION ADOPT A VESTED
2 INTEREST REFUND MECHANISM IN THIS DOCKET?
3 A. Normally this would be the opportune time to do so. However, in response to the
4 Commission Staff's Tenth Production Request No. 226, December 7, 2016 the Gas
5 Company stated:
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7 RESPONSE TO REQUEST NO 226:
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9 The methodology and models from which the Main and Service Line Extensions
10 financial evaluation were based are outdated and in need of revision.
11 Consequently, rather than expend the significant time and effort to answer this
12 question, and the following questions 227 through 229, the Company discussed
13 with Staff and proposes that, following this case (INT-G-16-02), it work with Staff
14 and prepare a compliance filing that updates Intermountain 's Main and Service
15 Extension provisions last approved by this Commission in June of 1986.
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17 Amalgamated expects that they be included in the "Company discuss [ions] with Staff' in
18 the future in order to be a part of the solution to this, admittedly somewhat complex issue.
19 Amalgamated hereby provides assurance to the Commission that it work diligently with
20 IGC and the Staff so that a workable vested interest refund rule for line extensions and
21 system improvements will be drafted for the Commission's due consideration.
22 Q. WHAT CONCLUDING REMARKS DO YOU HAVE?
23 A. That the radical, one step, rate design proposed by the Company be phased in over the
24 next five general rate cases for the reasons described above. Also, that IGC, working the
25 parties to this case, file a vested line extension tariff that would include accepted general
26 principles.
27
28 Q, DOES THIS END YOUR TESTIMONY AS OF DECEMBER 16, 2016?
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INT-G-16-02
1 A. Yes.
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5 CERTIFICATE OF SERVICE
6
7 I HEREBY CERTIFY that on the 16th day of December, 2016, a true and correct copy of
8 the within and foregoing DIRECT TESTIMONY AND EXHIBITS of Dr. Don Reading on
9 Behalf of AMALGAMATED SUGAR COMPANY, LLC was served electronically and by U.S.
10 Mail, to:
11
12 Karl Klein
13 Sean Costello
14 Idaho Public Utilities Commission
15 4 72 W Washington Street
16 Boise, Idaho 83 702
1 7 karl.klein@puc.idaho.gov
18 sean.costello@puc.idaho.gov
19
2 0 Michael P. McGrath
Ron Williams
Williams Bradbury, PC
1015 W. Hays Street
Boise, Idaho 83702
ron@williamsbradbury.com
Brad M. Purdy
Community Action Partnership
2019 N 17th Street
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INT-G-16-02
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1 Intermountain Gas Company
2 PO Box 7608
3 Boise, Idaho 83 707
4 Mike.mcgrath@intgas.com
5
6 Jean Jewell
7 Commission Secretary
8 Idaho Public Utilities Commission
9 4 72 West Washington
10 Boise, Idaho 83702
11 jean.jewell@Quc.idaho.gov
12
13 Electronic copies only:
14 Michael C. Creamer
15 Givens Pursley LLP
16 E-mail: mcc@givensQursley.com
17
18 F. Diego Rivas
19 NW Energy Coalition
20 1101 8th Avenue
21 Helena, MT 59601
22 diego@nwenergy.org
23
24 Ken Miller
25 Snake River Alliance
26 233 N 6th Street Suite 317
27 Boise ID 83 702
28 kmiller@snakeriveralliance.org
29
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31 Andrew J. Unsicker
32 Lanny L. Zieman
33 Natalie A. Cepak
34 Thomas A . Jernigan
35 Ebony M. Payton
36 AFLOA/JA-ULFSC
37 139 Barnes Drive, Suite 1
38 Tyndall AFB, FL 32403
39 Andrew.unsicker@us.af.mil
40 Lanny.zieman@us.af.mil
41 N atalie.ceQak@us.af.mil
42 Thomas.jemigan@us.af.mil
43 Ebony.Qay:!on@us.af.mil
44
45
Boise ID 83 702
bmpurdy@hotmail.com
Edward A. Finklea
Northwest Industrial Gas Users
545 Grandview Dr
Ashland OR 97520
efinklea@nwigu.org
Chad M. Stokes
Tommy A. Brooks
Cable Huston LLP
Portland OR 97204-1136
cstokes@cablehuston.com
tbrooks@cablehuston.com
Benjamin Otto
Idaho Conservation League
710 N 6th Street
Boise, Idaho 83 702
botto@idahoconservation.org
Reading, Di, Amalgamated Sugar
INT-G-16-02
17
Present position
Educatio
Honors and
awards
Professiona~'
and busines
histor I
Firm experience
Don C. Reading
Vice President and Consulting Economist
~.S., Economics C Utah State University
M.S., Economics C University of Oregon
Ph.D., Economics C Utah State University
Omicron Delta Epsilon, NSF Fellowship
Ben Johnson Associates, Inc.:
1989 Vice President
1986 ----Consulting Economist
Idaho Public Utilities Commission:
1981-86 Economist/Director of Policy and Administration
Teaching:
1980-81 Associate Professor, University of Hawaii-Hilo
1970-80 Associate and Assistant Professor, Idaho State University
1968-70 Assistant Professor, Middle Tennessee State University
Dr. Reading provides expert testimony concerning economic and regulatory
issues. He has testified on more than 35 occasions before utility regulatory
commissions in Alaska, California, Colorado, the District of Columbia, Hawaii,
Idaho, Nevada, North Dakota, North Carolina, Oregon, Texas, Utah,
Wyoming, and Washington.
[Dr. Reading has more than 30 years experience in the field of economics. He h~
participated in the development of indices reflecting economic trends, GNP
growth rates, foreign exchange markets, the money supply, stock market levels,1
and inflation. He has analyzed such public policy issues as the minimum wage,
federal spending and taxation, and import/ export balances. Dr. Reading is one
of four economists providing yearly forecasts of statewide personal income to
the State of Idaho for purposes of establishing state personal income tax rates.
In the field of telecommunications, Dr. Reading has provided expert testimony
~ _<:m the issues of marginal cost, price elasticity, and measured service. Dr. Reading
Exhibit 501
Case No. INT-G-16-02
Dr. Reading, Amalgamated
Sugar Company LLC
Page 1
prepared a state-specific study of the price elasticity of demand for local ----------,
elephone service in Idaho and recently conducted research for, and directed the f reparation of, a report to the Idaho legislature regarding the status of
~elecommunications competition in that state.
pr. Reading's areas of expertise in the field of electric power include demand
rorecasting, long-range planning, price elasticity, marginal and average cost
pricing, production-simulation modeling, and econometric modeling. Among
his recent cases was an electric rate design analysis for the Industrial Customers
l
of Idaho Power. Dr. Reading is currently a consultant to the Idaho
Legislature=s Committee on Electric Restructuring.
Since 1999 Dr. Reading has been affiliated with the Climate Impact Group
(CIG) at the University of Washington. His work with the CIG has involve~
an analysis of the impact of Global Warming on the hydo facilities on the Snake
!River. It also includes an investigation into water markets in the Northwest
and Florida. In addition he has analyzed the economics of snowmaking for ski!
area's impacted by Global Warming.
hmong D<. Reading's recent projects are a FERC hydropower relicensing study
(for the Skokomish Indian Tribe) and an analysis of Northern States Power's
North Dakota rate design proposals affecting large industrial customers (for J.R.
Simplot Company). Dr. Reading has also performed analysis for the Idaho 1
!Governor's Office of the impact on the Northwest Power Grid of various plan
to increase salmon runs in the Columbia River Basin.
Dr. Reading has prepared econometric forecasts for the Southeast Idaho Counci~
lof Governments and the Revenue Projection Committee of the Idaho State I
legislature. He has also been a member of several Northwest Power Planning
Council Statistical Advisory Committees and was vice chairman of the
Governor's Economic Research Council in Idaho
~hile at Idaho State University, Dr. Reading performed demographic studies
using a cohort/ survival model and several economic impact studies using
input/ output analysis. He has also provided expert testimony in cases
!
concerning loss of income resulting from wrongful death, injury, or I
employment discrimination. He is currently a adjunct professor of economics
at Boise State University (Idaho economic history, urban/ regional economics
and labor economic.)
~r. Reading has recently completed a public interest water rights transfer case. I
He has also just completed an economic impact analysis of the 2001 salmon
season in Idaho.
J_
Exhibit 501
Case No. INT-G-16-02
Dr. Reading, Amalgamated
Sugar Company LLC
Page 2
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