Idaho Public Utilities Commission

Case No. INT-G-11-03, Order No. 32428

January 9, 2012

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

Intermountain Gas applies for fifth PGA reduction

The “prolific availability” of U.S. shale gas production, record storage of natural gas supply and the lack of hurricane activity and cold weather are all contributing factors cited by Intermountain Gas Company in its fifth consecutive request for a reduction in natural gas rates.

Intermountain Gas, which serves about 312,000 customers in 74 communities across southern Idaho, is asking the Idaho Public Utilities Commission to reduce rates by an average 4.5 percent effective Feb. 1 through Sept. 30. The commission is taking comments on the application through Jan. 19.

At least once each year, Idaho’s electric and gas utilities submit a cost adjustment that tracks the costs of power and gas supply that vary from year to year. While base rates represent primarily fixed costs of providing natural gas or electricity, the annual Purchased Gas Cost Adjustment (PGA) for gas companies and Power Cost Adjustment (PCA) for electric companies results in temporary surcharges or credits that reflect variable costs. Increases or decreases in the PGA or PCA do not impact company earnings positively or negatively.

If approved by the commission, the portion of rates that covers natural gas supply and transportation would decline from 45.35 cents per therm to 41.8 cents. That represents about half the total summer residential rate of 86 cents per therm and winter residential rate of 75 cents.

Intermountain Gas also cites completion of the Ruby gas pipeline (from southeast Wyoming to south-central Oregon) as another factor contributing to lower gas supply prices. The Ruby pipeline has displaced other traditional natural gas supplies and softened prices at the Alberta Energy Company hub (AECO) that makes up a significant portion of Intermountain’s gas supply portfolio.

The commission plans to handle this request in a modified procedure that uses written comments rather than conducting a hearing, unless customer comments can demonstrate a need for a public hearing. Comments are accepted through Jan. 19 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-11-03) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.