The Idaho Public Utilities Commission (PUC) has authorized Boise, ID-based Intermountain Gas to raise its surcharge covering its gas costs for the first time in two years. Effective Wednesday, Intermountain’s overall revenues increased $54.3 million.

The action is part of the PUC’s annual adjustment in rates to reflect gas commodity costs. When wholesale gas prices are lower than anticipated, customers get a credit; when they are higher than expected, an increase is put in place for the coming 12-month period. Last year Intermountain put in place an 8% purchased gas adjustment decrease; this year costs have exceeded expectations and the utility convinced regulators it needed an increase of 18%.

In filing with the PUC Aug. 15, Intermountain President Bill Glynn cited worldwide energy demand being at an “all-time high.” That, coupled with “constraints on drilling and production for new supplies, is driving the price of all energy to record highs,” Glynn said.

The PUC emphasized that none of the surcharge revenues collected go to the utility’s profits. “Revenues from the surcharge are kept in a deferred account, audited by the commission, and are used only to meet gas supply and related expenses, including transportation and storage,” the PUC said.

The surcharge increase took Intermountain’s rate from 63.6 cents/therm to 78.5 cents/therm, and to the extent that wholesale gas costs “materially deviate” from the 78.5 cents/therm level the utility is expected to file an application to adjust the rates up or down each year. For residential customers using gas space heating only the adjustment results in about a $7.90/month increase, or 15%; for other residential customers it is about $12.30/month, or 18%. Business customers face the same 18% increase, or about $55.30/month, the PUC said.

Last year, Intermountain customers received about an 8% decrease, following a 4% drop in 2006. “However, during the last year wholesale gas market prices have soared to levels not seen since hurricanes Rita and Katrina in 2005,” the PUC said.

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.