Intermountain
Gas PGA is a decrease for most customers
Rates
for most Intermountain Gas Company customers will decline for the fourth time
in five years if the Idaho Public Utilities Commission accepts an application
by Intermountain Gas Company to reduce the variable portion of its gas rate.
While
base rates that cover fixed costs rarely change, there is a yearly adjustment
called the Purchased Gas Cost Adjustment (PGA) that most closely aligns rates
with the variable portion of gas rates. The portion of rates that varies from
year to year includes primarily three components: 1) the cost of purchased gas
from suppliers, which is largely dependent on wholesale market prices; 2) the
cost to transport natural gas and 3) the cost to store it. For this year’s PGA,
Intermountain Gas is asking to decrease its annual revenue by $2.2 million.
If
the commission adopts the proposal, rates will decline about 1.6 percent for the
77 percent of Intermountain Gas customers under Schedule RS-2, who use natural
gas for both water and space hearing. For an average RS-2 customer, that is a
reduction of about 90 cents per month.
Customers
who use natural gas under Schedule RS-1 for space heating only would see about
a 0.2 percent increase or 9 cents a month for an average customer.
The
new rate is proposed to be effective Oct. 1.
RS-2
customers would get a reduction under the company’s application because the
growth in that customer class more than paid the cost of serving that class.
Since RS-2 customers overpaid the amount it requires to serve them, the company
proposes a slight decrease in rates. On the other hand, lack of growth in the
RS-1 class resulted in the cost of serving that class not being met. Natural
gas and electric utilities typically determine the rate each customer class
pays based on the cost required to serve that class. Basing rates as closely as
possible to cost of service eliminates one class of customers subsidizing
another class of customers. Commission staff or the commission may recommend a
different allocation of how the $2.2 million decrease in revenue should be
applied to customers.
The yearly PGA does
not impact company earnings, whether the PGA is an increase or decrease. The
amount collected in the PGA variable portion of rates can be used only to meet
gas supply, transportation, storage and other related expenses and cannot go to
increase company earnings.
The commission is
taking comments on the company’s proposal through Sept. 22. Comments
are accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on
"Comments & Questions About a Case." Fill in the case number
(INT-G-10-03) 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 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 the above case number.