Idaho regulators are anticipating making further decreases in the retail charges for natural gas in the state as they currently circulate for public comments a filing by Intermountain Gas Co. to cut retail charges by 5.3%, effective Oct. 1.
Intermountain made its request in a filing to the Idaho Public Utilities Commission earlier in August, seeking changes downward in its annual purchased gas cost adjustment (PGA) to reflect the lower wholesale gas supply prices it has been paying since that part of the retail rates were adjusted last year.
The utility proposes to lower its revenue requirement by $14.4 million, or an average of 5.3%, on Oct. 1, dropping its weighted average cost of gas (WACOG) from 49.2 cents/th to 45.3 cents/th. Intermountain cited “continued weakness in the regional and national economies” as putting downward pressure on new customer growth and weather adjusted demand for gas.
“At the same time, natural gas supplies are ample and the U.S. dry gas production is at an all-time high,” said the utility, reiterating that robust supply combined with flat demand has kept gas prices “relatively lows.”
The latest request for a retail gas rate decrease in the region comes within days of the Northwest Power and Conservation Council (NPCC) reporting what its experts called “a fundamental shift” in the North American natural gas outlook, driven by the shale boom (see Daily GPI, Aug. 15). NPCC said the shift promises to keep wholesale prices low for a long time to come.
In less than a year since NPCC revised its long-term power plan significant changes have occurred that the council’s staff thinks can “fundamentally alter” an array of expectations in the gas and power sectors.
The Idaho PUC said that Intermountain has attributed its PGA shift to supplies of natural gas nationwide continuing to “remain strong with production at an all-time high.”
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