This Boise company already raised utility rates for gas this year. Prices could go up again
Intermountain Gas customers probably noticed a substantial increase on their gas bills last month. And another increase is likely to come.
The company, headquartered in Boise, filed a request for an interim purchased-gas cost adjustment with the Idaho Public Utilities Commission in December to raise its rates for natural gas services by 16.6% for residential customers and 17.9% for commercial customers.
The price increase was approved by the PUC and took effect Feb. 1. Residential customers saw an average increase of $8.58 on their monthly bills and commercial customers an increase of $43.10.
Intermountain Gas cited a major hike in the commodity price of natural gas in the last several months as the main reason for the request. The company also noted in a news release that its earnings would not increase as a result of the filing.
“The rebounding economy, a slow ramp-up of drilling activity and limited natural gas pipeline capacity are factors in increased commodity prices,” said Scott Madison, executive vice president of business development and gas supply for Intermountain Gas, in a news release.
The company typically files a purchased-gas adjustment application annually to keep with fluctuating prices. Usually, that filing happens in the fall.
If the application to raise prices had been left until later this year, the monthly increase for customers would have been even steeper, according to the company. Intermountain Gas said it filed the request for an interim purchased-gas cost adjustment in December because commodity prices had risen so dramatically.
The company said the price it pays for natural gas is passed directly to customers and it doesn’t benefit financially from the change.
Intermountain Gas asks for general rate increase
Another rate hike is on the horizon. In addition to the purchased-gas cost adjustment that took effect in February, Intermountain Gas filed a separate application also in December for a general rate increase, something it hasn’t asked for since 2016.
The PUC can approve, reject or modify the request. If it’s approved as-is, residential customers would see an average increase of $2.19, or 4.4%, on their monthly bills and commercial customers an increase of $3.43, or 1.5%.
The rate change would increase the company’s annual revenues by $11.3 million, or about 3.2%.
The city of Boise, Idaho Conservation League and Alliance of Western Energy Consumers have all filed petitions to intervene, indicating they have a stake in the outcome of the case.
“(The Idaho Conservation League) and its members have a direct and substantial interest in ensuring that Intermountain provides fair rates that do not unduly burden customers and those interested in energy efficiency, conservation and the environmental impacts of the energy system,” the Idaho Conservation League, a nonprofit organization, said in its petition.
Last month, the PUC held public informational workshops regarding the request in Boise, Pocatello and Twin Falls.
Company cites infrastructure investments
According to Intermountain Gas, the request for a base rate increase is not impacted by fluctuations in the cost of natural gas. The company, which has over 400,000 residential, commercial and industrial customers in southern Idaho, said the main reason it seeks to raise rates this time around is to recoup money it spent on infrastructure investments over the last several years.
The company said in its application that most of the investments were made prior to inflation rising in 2021.
“We believe the infrastructure investments are prudent to ensure safe and reliable natural gas service to our customers,” said Nicole Kivisto, president and CEO of Intermountain Gas, in the application. “Current prices do not reflect the cost of providing service to our customers, which is why we are requesting this increase.”
Intermountain Gas said this is the second time its requested a general rate hike in 37 years. The last one was a 2.5% increase that the PUC approved in 2017.
Lueder previously told the Statesman that the purchased cost of natural gas is only a portion of the monthly bill homeowners and businesses receive. The rest pays for distribution and the cost of maintaining the network.
The cost of natural gas makes up about 64% of a customer’s monthly bill, the company has said.
A public hearing for the general rate case has not yet been scheduled by the PUC. Written comments on the application from Intermountain Gas will be accepted until April 26. Comments must be filed through the commission’s website or by e-mail.
Natural gas rates have fluctuated over the last year
The PUC already approved a mid-year purchased-gas adjustment application from the company last July, which took effect Aug. 1. It raised the price of natural gas services by 24.1%, or $10.55 per month, for residential customers and 27%, or $51.87 per month, for commercial customers.
The purchased-gas adjustments stem from the weighted average cost of gas, the price of which is calculated per therm. A therm is a measurement of heat energy in gas.
Laura Lueder, spokesperson for Intermountain Gas, previously told the Idaho Statesman by phone that a typical residential customer uses an average of 60 to 65 therms per month. Natural gas usage is higher in the winter months and lower in the summer months.
In addition to the rate increase in August, the company also filed a request to decrease rates that took effect Oct. 1. The reduction was about 2.5%, or $1.36 per month, for residential customers.
“All of that is due to higher natural gas commodity prices,” Lueder said. “It is a straight pass-through of the price of natural gas on the market.”
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