Website:
www.puc.idaho.gov
Intermountain
application reflects stability in natural gas prices
Intermountain
Gas Co. bills won’t be going up in the near future, reflecting the stability in
wholesale market prices for natural gas.
The
Idaho Public Utilities Commission is taking comments through Sept. 20 on the
company’s proposal to adjust its Weighted Average Cost of Gas, or WACOG, from
73.2 cents per therm to 72.4 cents, which will result in a $1.6 million
decrease – 0.5 percent – in Intermountain’s total net revenue. The stability in
wholesale market prices for natural gas is a departure from the volatility of
the last two years. Last year, the company received a 27.6 percent increase in
its WACOG, due to increased wholesale gas prices. In 2004, the increase was 10
percent.
Changes
in the WACOG, while impacting total net revenue, do not increase or decrease
company earnings. Money collected from the WACOG goes directly to pay
Intermountain’s wholesale gas suppliers. The WACOG, which represents over half
the total customer bill, is intended to reflect the costs Intermountain Gas
incurs acquiring natural gas to serve its approximate 275,000 southern Idaho
customers. A customer who uses natural gas for both space and water heating
pays about $1.11 a therm from April through November and $1.07 a therm from
December to March. Of that, 73.2 cents is for gas supply. The remainder is for
Intermountain Gas’ fixed costs. When fixed costs are adjusted, company earnings
either decrease or increase. There has not been an adjustment in Intermountain
Gas’ fixed costs for more than 20 years.
Intermountain
Gas attributes the stability in rates to a number of factors, including the
company’s practice of procuring gas during the traditionally lower-priced
summer season and storing it for use in the winter when prices are higher.
Intermountain Gas also reports that wholesale natural gas prices have been
moderated by increased levels of storage in the national gas supply, the
restoration of natural gas production in the Gulf states after being
temporarily lost due to Hurricane Katrina, a moderate outlook for the upcoming
hurricane season and increases in domestic exploration and production.
Intermountain
says it will come before the commission before the winter heating season if
wholesale prices materially deviate from the proposed 72.4-cent WACOG.
Those wishing to submit comments must do so by no later than Sept. 20. Comments are accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on "Comments & Questions." Fill in the case number (INT-G-06-04) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.
A full text of the company’s application, along with other documents related to this case, are available on the commission’s Web site. Click on “File Room” and then on “Gas Cases” and scroll down to the above case number.