Idaho Public Utilities Commission

Case No. INT-G-10-01, Order No. 32004

July 7, 2010

Contact: Gene Fadness (208) 334-0339, 890-2712

 

Commission won’t regulate resale of compressed natural gas

 

Responding to a request by Intermountain Gas Company, the Idaho Public Utilities Commission issued a declaratory order stating it does not have jurisdiction over the resale of natural gas by non-utility third parties.

 

Third-party entities have asked Intermountain Gas to sell them natural gas so that the third parties can resale it for use as compressed natural gas (CNG) in vehicle fleets.

 

Intermountain Gas sought assurance from the commission that it would not consider the utility in violation of state law or tariff provisions if it were to sell to third parties for resale to vehicle fleets. Intermountain anticipates other potential resale transactions may be proposed by other entities due to the price, availability and environmental benefits of using natural gas as a transportation fuel. Some Western states, including Washington, Utah and Wyoming, permit public CNG fueling stations.

 

In response, the commission determined that the Energy Policy Act of 1992 preempts the commission’s authority over the resale of natural gas for transportation purposes. Consequently, the commission said it “will not exert rate-setting jurisdiction over the resale of natural gas for use as a fuel in motor vehicles.”

 

The Treasure Valley Clean Cities Coalition submitted comments supporting Intermountain Gas in its view that the commission not regulate the resale of compressed natural gas for transportation purposes. TVCCC supports greater use of CNG as a motor fuel that will reduce dependency on foreign oil, improve air quality and promote local economic development.

 

Intermountain Gas also raised liability concerns regarding resellers.  The company asked that the declaratory order include a statement that the commission will continue to regulate the safety of natural gas facilities operated by Intermountain, but only to the point where Intermountain’s facility or pipeline connects to a buying customer’s metering device. In this way, Intermountain Gas may not be held liable for what happens when its product is resold by third-party entities.

 

The commission said it will continue to enforce its safety rules and regulations up to the point that Intermountain’s facilities connect to a customer’s metering device. Beyond that point, the International Fire Code establishes the safety requirements for facilities dispensing CNG as a motor fuel. The State Fire Marshal, local fire departments and fire districts are primarily responsible for enforcing the International Fire Code.

 

Intermountain proposes to sell natural gas to resellers using its existing tariff rates.

 

A full text of the commission’s order, along with other documents related to this case, is available on the commission’s Web site at www.puc.idaho.gov. Click on “File Room” and then on “Gas Cases” and scroll down to Case Number INT-G-10-01.