Idaho regulators have taken steps to make sure local MDU Resources Group utility Intermountain Gas Co.’s current projected surplus of liquefied natural gas (LNG) that is sold to nonutility customers includes benefits for the retail regulated gas utility customers.
The Idaho Public Utilities Commission (PUC) on Monday approved a plan from Intermountain that allows for sales to nonutility customers, but makes sure utility customers share at least 50-70% of the revenues from those sales.
Part of Bismarck, ND-based MDU, Intermountain proposed sharing half the revenues in its most recent annual purchased gas cost adjustment (PGA) filing to the PUC, but the regulators modified the PGA to permit the 50-50 split on sales up to $1.5 million annually, and increase utility customers’ share to 70% on sales revenues exceeding that ceiling.
Serving in excess of 300,000 gas utility customers in southern Idaho, Intermountain operates a LNG facility at Nampa, ID. The company “expects to have excess capacity for the next few years,” a PUC spokesperson said. “It proposes to sell that excess until system growth requires it to use all its LNG to meet peak-day needs for its customers.”
Under the plan approved by the PUC, Intermountain will use all stored LNG to first satisfy utility customer demand. It will assess nonutility customers a 2.5 cents/gallon fee to meet any operations/maintenance costs resulting from the nonutility sales.
The utility proposed having revenues from the 2.5-cent charge go to the company shareholders, but the PUC reversed that and directed Intermountain to flow it to utility customers. “Nonutility customers also will pay an added 2.5 cents/gal. charge to meet any capital expenditures or increased maintenance costs for the Nampa plant.
In addition, the plan calls for nonutility customers to be required to sign a contract protecting utility customers from financial risk as well as risks to the company after the LNG is transferred to a nonutility customer. “Intermountain Gas will accept all financial risk and will insulate utility customers from any costs associated with nonutility sales,” said the PUC spokesperson.
The utility will separately account for and track the costs independent of the utility costs, and make quarterly reports of the results to the PUC.
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