Friday, October 2, 2009

Gas-guzzlers to pay hook-up fees

Intermountain Gas adds charges to pay for $640,000 upgrade


By TREVON MILLIARD
Express Staff Writer

The 2009 Intermountain Gas Co. pipeline upgrade is projected to cost more for the return of energy provided than previous projects, largely because it is close to Ketchum and Sun Valley—where the costs of building can be high—and is a “complicated” project, the company said.

State regulators have passed a new hook-up fee for some Intermountain Gas Co. customers, to pay for a $640,000 upgrade to the Sun Valley Lateral, which runs from Twin Falls to Ketchum.

The fee went into effect yesterday.

The company said the upgrade is necessary because the pipeline is running at its capacity of 180,000 therms per day. The improvement will increase pressure on that segment of the pipeline, providing 16,000 more therms a day, and is to be finished this year.

A therm is the heat energy unit used by gas companies to measure natural gas consumption. One therm can be provided by about 100 cubic feet of gas and is equal to 29 kilowatt hours of electrical energy.

In an application filed with the Idaho Public Utilities Commission in June, Intermountain Gas stated that the overwhelming demand is due to increased gas use at the north end of the Wood River Valley. The application stated that large homes with seasonal customers have peak-day demands "extremely" higher than daily usage throughout the year and have put a strain on the Sun Valley Lateral. The company said 97 percent of the lateral's use along its 68-mile length occurs within the last 15 miles—Ketchum and Sun Valley.

The company proposed, and the PUC agreed, that those creating the increased demand should foot the bill.

The fee will only apply to new customers between Gimlet Road—excluding Gimlet subdivision—and Ketchum, where the lateral ends. And all new customers won't be charged. Only those whose use exceeds the average peak-day demand of 15.5 therms per day will pay the fee, based on gas use above that average. Customers will have to pay $40 for every therm used above 15.5 per day.

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For example, a home with a projected peak use of 36 therms per day would be 20.5 therms above the average. Multiply 20.5 by $40, and that person would be paying a $820 hook-up fee.

New customers using below-average amounts of natural gas for peak days won't be charged a dime in hook-up fees.

The commission and five public comments supported the fee system.

In its order allowing the fee, the commission stated that it found it "reasonable for Intermountain Gas to charge a hook-up fee to those customers who will directly benefit from the capital investment and, ultimately, whose demand makes the upgrade necessary."

Intermountain Gas stated in its application that earnings would not increase as a result of the hook-up fee.

The fee will stay in effect until either the investment is recovered or the line again reaches capacity and a new fee is set. The company said it's uncertain how long that will take based on the trouble of predicting future growth. But the company did say it would provide refunds to those who paid hook-up fees if the project's cost is lower than projected.

This will be the lateral's third fee increase since it was installed in 1965. The first was in 2003 on 15 miles of the lateral, and the next was in 2005 on 33.5 miles of the lateral.

The pipeline also saw an upgrade in 1974 when Intermountain gas replaced 19 miles of 8-inch piping with 10-inch piping.

Trevon Milliard: tmilliard@mtexpress.com




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