Website: www.puc.idaho.gov
Intermountain Gas rates go down Monday
Rates for customers of Intermountain Gas Company will go
down about 8 percent effective Monday.
Downward pressure on natural gas prices and the company’s
effective hedging practices led to a second consecutive reduction in the
company’s annual Purchased Gas Cost Adjustment (PGA), which was approved by the
Idaho Public Utilities Commission this week.
Residential customers using natural gas for both space and
water heating should notice about a $6 reduction in monthly bills and customers
using natural gas for just space heating will have an average $4 monthly
reduction. Commercial customers will experience an average $29 per month
reduction. Industrial customers who use Intermountain’s delivery service, but
do not buy natural gas from the company, will see about a 9.4 percent increase
in delivery costs.
Each year, Intermountain Gas rates are adjusted through a
Purchased Gas Cost Adjustment (PGA) mechanism. The adjustment does not change
the base rates paid by customers, but does impact the size of a surcharge that
is adjusted annually to adapt to the always changing costs of buying gas from
suppliers and related transportation and storage expenses. The PGA adjustment
takes place yearly, while a rate case, to adjust base rates, occurs less
frequently. Intermountain Gas, which serves about 280,000 customers in its
southern Idaho territory, has not had a change to its base rate since 1985.
The commission praised the company for taking advantage of
its storage options and making favorable advance gas purchases to protect
customers against the volatility of wholesale gas markets. Commission staff
said the company’s ability to lock in prices with forward market purchases
saved customers nearly $1.5 million in the coming year. Further,
“Intermountain’s substantial storage capacity has allowed it to take advantage
of lower prices when they have occurred, and makes it less dependent on spot
market purchases during the volatile winter months,” commission staff said.
Customers also benefited from a settlement of a rate case
between the Federal Energy Regulatory Commission and the Northwest Pipeline
Corporation, which transports much of Intermountain’s gas supply to Idaho. The
benefit received by customers in that settlement is about $970,000. Another
case between FERC and the Gas Northwest Transmission Corporation is pending
before FERC. If FERC approves an increase that is less than that proposed by
the transmission corporation, the PUC reserves the right to reopen this case
and re-evaluate the PGA for possible further reductions.
But on another transmission front, costs increased for
Intermountain Gas. Capacity costs have increased on several Canadian pipelines
and there is a tightening of the exchange rates between U.S. and Canadian
currencies. In this PGA, Intermountain also included costs to secure additional
liquid storage from Northwest Pipeline’s Plymouth, Wash. liquid natural gas
facility.
Whether the yearly PGA is an increase or a decrease, it
does not impact company earnings. Similar to the electric utilities’ annual Power
Cost Adjustment (PCA) process, an increase or decrease in the yearly PGA goes
directly to wholesale suppliers in the event of an increase or to customers in
the event of a decrease. Money collected through the PGA cannot go to salaries,
equipment or other needs, but must go directly to paying for gas supply,
transportation and storage. When the cost of purchasing gas is higher than the
amount customers pay in the current surcharge, the surcharge is increased. When
gas supply purchases are less than that covered in the surcharge, the reduction
goes directly to customers.
The company has said it will come before the commission
again before the winter heating season if the company’s forecasted forward
prices are significantly less than projected.
A full
text of the commission’s order, along with the company’s application and other
documents, are 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 No. INT-G-07-03.
Interested
parties may petition the commission for reconsideration by no later than Oct.
17. Petitions for reconsideration must set forth specifically why the
petitioner contends that the order is unreasonable, unlawful or erroneous.
Petitions should include a statement of the nature and quantity of evidence the
petitioner will offer if reconsideration is granted.
Petitions
can be delivered to the commission at 472 W. Washington St. in Boise, mailed to
P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.