Idaho Commission Approves $67 Million Revenue Hike for Intermountain Gas Company

The Idaho Public Utilities Commission approved new Intermountain Gas Company rate schedules by an interim Purchased Gas Cost Adjustment, or PGA, according to an Aug. 3 press release. Residential natural gas service rates increased by about 24.1 percent and commercial rates increased by about 27 percent. The rate change will increase Intermountain’s revenues by $67 million annually, but not earnings, since the rising natural gas prices are passed directly onto customers, therefore the price increase has no financial benefit for the company.

Intermountain generally files PGAs annually to balance out an over or under collection of natural gas costs. However, a significant increase in commodity prices has prompted the company to file an interim increase on May 31 to mitigate the under-collection balance. The utility said that the low storage levels and an increase in demand, as well as global events such as Russia’s invasion of Ukraine, have contributed to this increase. Commodity prices are also rising due to a slow ramp-up in drilling activity and the economic rebound, according to the press release.

The rate increases began on Aug. 1 and the average monthly bill increase for residential and commercial customers will be $10.55 and $51.87 respectively, depending upon the natural gas consumption. Most of the surge is attributed to an increase in the weighted average cost of gas, which increased the price from $0.26000 per therm to $0.42405 per therm. In addition, the commission authorized an increase in Intermountain Gas’s line-break charge for parties responsible for causing gas leaks from $0.42443 per therm to $0.58848 per therm. However, the commission encouraged Intermountain to explore all options to reduce future increases even though it approved its PGA rate requests.

The PGA mechanism allows the utilities to adjust rates based on changes in transportation, storage, and other costs associated with buying natural gas from suppliers. Utilities pass those costs along to customers through a rate increase or decrease.

Intermountain Gas is a subsidiary of MDU Resources Group Inc.