20170320Petition for Funding.pdf

Brad M. Purdy
Attorney at Law
Bar No. 3472
2019 N. 17tr St.
Boise,lD. 83702
[phone] (Latd)
(208) 384-851 1 (Fax)
[e-mail]
Attorney for Petitioner
Community Action Partnership
Association of ldaho
IN THE MATTER OF THE APPLICATION
OF INTERMOUNTAIN GAS COMPANY'S
APPLICATION TO CHANGE ITS RATES
AND CHARGES FOR NATURAL GAS
IN THE STATE OF IDAHO
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.i"'li i ',.1 j0 Pl,l h: S?
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NOS. INT-G-I6-02
COMMUNITY ACTION
PARTNERSHIP ASSOCIATION
OF IDAHO'S PETITION FOR
INTERVENOR FUNDING
IEXPAND UPON ALL WORK CAPAI DID. COpy STOKES. EXPAND UPON
CHRISTINA'S ROLE AS EXPERT. STATE THAT CAPAI, TOO, IS LEAVING MONEY
ON THE TABLE. EXPLAIN WHY CAPAI'S FEDERAL FUNDING IS LIMITED FOR
PUC TNTERVENTTONS.I
I. INTRODUCTION
COMES NOW, the Community Action Partnership Association of Idaho (CAPAI) and,
pursuant to Idaho Code $ 6l-617A and Rules 16l-165 of the Commission's Rules of Procedure,
CAPAI APPLICATION FOR INTERVENOR FUNDING 1
IDAPA 31.01.01.161-165, petitions this Commission for an award of intervenor funding in the
above-captioned proceeding.
I BACKGROT]IID
Unlike several recent general rate cases before this Commission, the current proceeding
fully went to hearing on March l-3,2017. Although CAPAI and Intermountain Gas Company
(hereinafter; "IGC" or "Company") have met on two occasions to discuss the possibility of the
implementation of what would be the Company's first Low-Income Weatherization Program, no
formal agreement has yet been reached and the parties agreed to consider future discussions
depending upon the outcome of this case.
At hearing, CAPAI presented the testimony of Ms. Christina Zartorawhich outlined
CAPAI's objectives, rationale, and recommendations to the Commission and fully participated in
cross-examination of other witnesses, where necessary, and the hearing on the whole. In
addition, CAPAI both submitted and responded to discovery responses and otherwise fully
participated as a formal party to this case.
III. PROCEDURAL REQUIREMENTS
Rule 16l Requirements:
Intermountain Gas Company is a regulated, electric and gas public utility with gross
Idatro intrastate annual revenues exceeding three million, five hundred thousand dollars
($3,5oo,ooo.oo).
Rule 162 Requirements:
(01) Itemized list of Expenses
Consistent with Rule 162(01) of the Commission's Rules of Procedure, an itemized list of
all expenses incurred by CAPAI in this proceeding is attached hereto as Exhibit "A."
2CAPAI APPLICATION FOR INTERVENOR FUNDING
(02) Statement of Proposed Findings
During the course of the hearing, and the case on whole, CAPAI raised the following
lssues:
1. Consolidation of the Residential Class:
Ms. Zamoru r.r, is no rationale for separating the
residential class into the two categories currently in existence: space heating only and space
combined with water heating. Consequently, CAPAI has no objection to this proposal and
recommends its approval by this Commission.
2. Proposed Increase to Customer Charse:
Regarding CAPAI's position on IGC's proposed increase to the Customer Charge
from $2.50 to $10.00, Ms. Zamora noted that CAPAI submiued numerous discovery requests to
Intermountain seeking data regarding the Company's low-income customers. CAPAI requested
data ranging from how many of the Company's customers are low income based on various
criteri4 the average consumption habits of low income customers compared to nonJow income
and other data that would provide CAPAI with the ability to determine whether a higher
customer charge resulting in bills that are lower due to reduced commodity charges. She noted,
however, that the Company has not historically tracked the data necessary to make
determinations such as those presented by this question.
Regarding whether the lack of data necessarily alters CAPAI's position on the
proposed increase to the customer charge, Ms. Zamora testified that the proposed increase was
not significant enough to cause CAPAI undue concern. Were the proposed increase to customer
charge higher, Ms. Zamora testified that CAPAI might object to the increase, depending on the
amount.
CAPAI APPLICATION FOR INTERVENOR FUNDING J
Specifically, she testified that a higher fixed customer charge obviously sends a
price signal that is contrary to the objective of conservation. This is particularly problematic for
low income customers who could otherwise reduce their bills by reducing discretionary
consumption. On the other hand, as noted by the Company and as proven in a number of past
cases both in Idatro and other states, some low income customers with gas heating consume more
gas than would be expected due to non-discretionary conditions such as poorly insulated housing
and/or inefficient heating equipment. Placing more of an overall rate increase on the commodity
charge, as opposed to the fixed customer charge, will obviously have a negative effect on such
customers. CAPAI proposes that the Company begin tracking low income data ranging from the
percentage of its customers who are low income to their consumption habits as discussed in
Section3, below.
3. Low Income Data Tracking
An issue of significant concern and importance to CAPAI is the ability to
determine, among other things, the impact of rate design proposals, policies and formulation of
those policies, to determine the disparate impact that such proposals might have on certain
subsets of low income customers. This is based on an abundance of evidence, anecdotal and
direct, from prior cases, including from other states, that a surprising percentage of low income
customers are relatively high users. This can be explained by a number of reasons including, but
not limited to, the fact that low income customers who reside in energy-inefficient housing stock
often have little to no discretionary consumption, particularly in winter and with respect to their
primary heating source.
An example of such a customer might be a household with many individuals
residing there and in a dwelling that is a poorly insulated home, perhaps even a thin-walled
trailer home with signifrcant losses of heat due to poor or complete lack of weather stripping,
CAPAI APPLICATION FOR INTERVENOR FTINDING 4
holes in windows covered by cardboard, little to no insulation, and so on. Under such factual
situations, it is possible for such a household to consume more gas in comparison to wealthy
people living in very large homes with amenities ranging from outdoor hot tubs to heated
driveways but whom have state of the art weatherizationmeasures already built into their homes
and actually consume less natwal gas. Regarding low-income tracking, Ms. Zamora
testified that the matter would be an appropriate topic to be addressed collaboratively by an
advisory working group. She further posited that it would be helpful to obtain a beffer sense of
the impacts of rate design proposals, based on empirical data, as to the percentage of IGC's
customers who are low income and their respective consumption habits, among other data. It is
CAPAI's position, presented to the Commission during hearing, that the type of data CAPAI
hopes to obtain and analyze through the collaborative advisory working group would be of
benefit to the Commission in terms of understanding the true impact on various residential rate
design proposals by better understanding the true impact of those proposals on low income
customers.
CAPAI acknowledges that the absence of the low income data sought in this case
isn't surprising il for no other reason, than: l) IGC hasn't had a general rate case before this
Commission in more than 30 years, and that low-income customers don't typically or predictably
fall into a high or low consumption customer population subset of the residential class. Some
low income consumers consume relatively high levels of natural gas due to a number of factors
already listed. Other low income customers, however, might include senior citizens who have
lived in relatively energy-efficient housing for many years, who live alone, and who are frugal in
their use of gas consuming appliances. Consequently, this latter subset of low income
customers' natural gas consumption might be lower than average low income consumption.
5CAPAI APPLICATION FOR INTERVENOR FUNDING
Ms. Zamora opined that the aforementioned factors might impede CAPAI and
IGC's ability to implement a successful low-income weatherization program for the Company.
Consequently, CAPAI asserts that it is critical to begin tracking low-income data for IGC so that
there exists a better understanding of the specific needs of the Company's customers in order to
create a well-tailored weatherization program that provides access to energy conservation to the
majority of Intermountain's customers.
Regarding the specifics of how CAPAI can enhance the tracking of low-income
data, Ms. Zarroratestified that the creation of an advisory group outside the scope of this
proceeding involving the Company, CAPAI, the Commission Staff, and all other interested
persons for the purpose of identifring areas and issues where better data would be productive
would be an efficient method of identifuing the data and how best to collect and track it. The
outcome of this effort could, conceivably, be used with respect to other utilities in the future
though CAPAI proposes limiting the advisory group, for the time being, to IGC in the meantime.
Armed with low income tracking data and the conclusions drawn therefrom,
CAPAI asserts that the Commission will be better equipped to assess the impact of issues,
particularly those pertaining to rate design, on those customers least able to pay. Through such
enhanced awareness, there is an elevated ability to maintain low income customers on the system
and reduce costs such as bad debt expense, collection fees and other negative consequences
attributed to the loss of a customer for failure to pay, all of which are passed along to other
ratepayers.
Although there existed some differences between the testimonies of IGC
witnesses Ms. Allison Spector and Mr Mike McGrath during cross-examination by CAPAI and
regarding whether IGC is willing to participate in a working group to discuss low income data
CAPAI APPLICATION FOR INTERVENOR FTINDING 6
tracking, it seems that the Company is not entirely resistant to the idea of designing a low-
income tracking program. It is CAPAI's hope that any objections or concerns regarding this
issue can be satisfactorily resolved dwing the course of the advisory group.
In summary, it is CAPAI's proposed findings that the Commission order the
formation of an advisory group to, among other things, consider a low-income tracking policy
and mechanism for IGC.
4. Low Income Weatherization Program
As discussed earlier, CAPAI and IGC have had occasion to informally discuss the
implantation of a low income weatheization assistance progfirm. Though there have been no
formal agreements reached thus far, and depending on the final ruling by the Commission in this
proceeding, the parties have not yet reached an impasse and have effectively agreed to keep the
possibility open of convening again, perhaps with the involvement of other parties, to discuss the
design and implementation of what would be IGC's first LIWA program. CAPAI would
welcome any such discussion in the near future.
To the extent that the Commission might ultimately agree that an advisory
working group is justified for the purpose of low income data tracking, then it seems that it
would be economical and logical to include a discussion of LIWA in the same advisory group's
discussions. Again, CAPAI asserts that the inclusion of not just CAPAI and IGC would make
sense, but also to include the Commission Staffand all other interested stakeholders. The
objective would be to implement a low income weatherization program that is effective in terms
of helping low income customers reduce their bills through less consumption of gas in a way that
they cannot otherwise afford. A properly constructed progrirm should be cost-effective, conserve
7CAPAI APPLICATION FOR INTERVENOR FUNDING
energy resources and help those who could not otherwise afford to reduce their non-discretionary
consumption.
(03) Statement Showing Costs:
As outlined above, CAPAI fully participated in every aspect of this proceeding from start
to finish and provided input and asserted issues not raised by Staffand other parties. For the
reasons stated throughout this Petition, CAPAI respectfully submits that the costs it seeks to
recover and set forth hereto in Exhibit A, are reasonable in amount.
Finally, regarding the reasonableness of CAPAI'S costs, CAPAI notes that it has no
choice but to minimize its expenses and maximize the effect that its involvement has in
proceedings before the Commission in light of its limited financial resources for this type of
efifort. Suffice it to say that CAPAI seldom can afford to retain an outside expert witness and
does so only in particularly technical and critical proceedings. Otherwise, it must adopt a
resourceful approach using what limited resources that are at its disposal. In this regard, CAPAI
relies heavily on its Executive Director, Christina Zanor4 for all technical and policy aspects of
this and any other IPUC case that CAPAI intervenes in. In that and every other respect, Ms.
Zamora is a highly-qualified expert who contributes substantial amounts of time and resources so
that CAPAI is able to meaningfully participate in these cases and provide the Commission with
unique and valuable perspective and information. Were CAPAI to track and bill her hours at
anything remotely resembling a modest market rate, CAPAI's funding requests would increase
significantly. As it is, Ms. Zartoraperforms what she considers to be another aspect of her work
and CAPAI seeks nothing for her expert and invaluable services.
Finally, CAPAI notes that its legal counsel's stated rate is less than the average first year
associate practicing in Boise, Idaho. CAPAI's counsel has nearly 32 yearc of practice as an
CAPAI APPLICATION FOR INTERVENOR FUNDING 8
attorney, 26 years of which include public utilities work, one of the most highly specialized
fields in the practice of law. Hourly rates for an attomey with commensurate experience in such
a specialized area of practice in this market are at least 2-3 times what CAPAI seeks for recovery
in its intervenor funding requests. Furthermore, in the roughly thirteen years that CAPAI's legal
counsel has represented CAPAI in PUC proceedings, counsel has increased his rate only 2-3
times and, even then, the total increase over thirteen years has been $S0/hour.
Based on the foregoing, CAPAI respectfully submits that the costs incurred and requested
in this Petition are reasonable in amount.
(04) Explanation of Cost Statement
CAPAI is a non-profit corporation overseeing a number of agencies who fight the causes
and conditions of poverly throughout Idaho. The majority of CAPAI's firnding sources impose
conditions or limitations on the scope and nature of work eligible for funding. CAPAI, therefore,
has relatively little "discretionary" funds available for all projects, including participating in
IPUC proceedings.
CAPAI's sole source of firnding to cover the costs of intervention before this
Commission is the LIHEAP progrcm. CAPAI's LIHEAP budget is limited and if recent years
serve as any indication, uncertain as to its future levels.
Thus, were it not for the availability of intervenor funds and past awards by this
Commission, CAPAI would not be able to participate in cases before this Commission
representing an important and otherwise unrepresented and growing segment of regulated public
utility customers. Even with intervenor funding, participation in Commission cases constitutes a
significant financial hardship because CAPAI must pay its expenses as they are incurred, not if
and when intervenor funding becomes available.
CAPAI APPLICATION FOR INTERVENOR FUNDING 9
(05) Statement of Difference
CAPAI was the only party to propose a low income data tracking program through an
advisory working group. CAPAI was also the only party to raise the possibility of a Low Income
Weatherization Assistance Program, also through the advisory working group.
Consequently, CAPAI's position differed materially from that of Staff s for purposes of
intervenor funding requirements.
(06) Statement of Recommendation
IGC's low income customers constifute a significant and increasing segment of the
Company's residential ratepayers. In today's increasingly challenging economic times, issues
affecting low income public utility ratepayers also become increasingly important. To the extent
that low income customers are unable to reduce their energy consumption due to limited
{inancial and other means and to the extent that the poor are most wlnerable to disconnection
due to inability and failure to pay their bills, this clearly and positively affects the general body
of IGC's customers through, irmong other things, the reduction of bad debt expense, collection
costs, and the loss of a customer.
(07) Statement Showing Class of Customer
To the extent that CAPAI represents a specific customer class of IGC, it is the residential
class.
CAPAI APPLICATION FOR INTERVENOR FUNDING 10
due to inability and failure to pay their bills, this clearly and positively affects the general body
of IGC's customers through, among other things, the reduction of bad debt expense, collection
costs, and the loss of a customer.
(07) Statement Showing Class of Customer
To the extent that CAPAI represents a specific customer class of IGC, it is the residential
class.
RESPECTFULLY SUBMITTED, this 20th day of March, 2017.
Brad M. Purdy
CAPAI APPLICATION FOR INTERVENOR FUNDING ll
Expert \ilitness:30.00 hrs.
Total Legal Fees:
Expert Witness Fees:
(70.00 hrs x $150.00/hr)
(30.00 hrs x $30.50/hr)
$10i500.00
$915.00
Costs:(Waived)$0
$11,415.00
$9,500.00r
TOTAL FEES AI\D COSTS
TOTAL REQTIESTED FEES AltD COSTS
DATED, this 20tr day of March,2}l7
Brad M. Purdy
I In order to ensure that CAPAI's firnding request, combined with other intervenors, does not exceed the maximum
$40,000.00 allowed for all intervenoni pursuant to Idaho Code Section 6l-617A, CAPAI has chosen to limit the
amount it seeks to $9,500.00. This voluntary discounting of CAPAI's actual fees and costs does not mean that the
stated hours and hourly rates are not reasonable in amount. Rather, it is an attempt toward conciliation.
CAPAI APPLICATION FOR INTERVENOR FUNDING 14
AMALGAMATED SUGAR
c/o Peter Richardson
Gregory Adams
Richardson Adams, PLLC
515 N. 27th St.
P.O. Box 7218
Boise,lD 83702
peter@richardsonadams. com
Scott Dale Blickenstaff
Amalgamated Sugar Company
1951 S. Saturn Way, Suite 100
Boise,ID 83709
sbl ickenstaff@ amal su gar. com
NORTIIWEST INDUSTRIAL GAS USERS
Chad Stokes
Tommy Brooks
Cable Huston, LLP
l00l S.W. 5th, Ste 2000
Portland, OR 97 204-l 13 6
cstokes@cablehuston. com
tbrooks@cablehuston. com
Michael C. Creamer
Givens Pursley LLP
mcc@ givenspursley.com
DATED, THIS 20rH DAY OF MARCH,aDL7
\
--1s-----tc,/
Brad M. Purdy
CAPAI APPLICATION FOR INTERVENOR FUNDING t7