Utah Ratepayers Association
Education and Lobbying for Ratepayers of Utility-type Services with Limited or No Alternatives
Questar Gas Company – Transponders – Under-billed Customers Complain about Back-bills – Ratepayers-at-Large Paid Higher Rates – PSC Decision
The Public Service Commission of Utah will require Questar Gas Company, rather than its ratepayers-at-large, to pay for natural gas consumption that went unbilled because the utility installed hundreds of remote-meter-reading transponders incorrectly.
Roger Ball, Moderator of the Utah Ratepayers Association, said:
“Ratepayers are pleased that the Commission expects Questar to pay for its errors, but concerned that the Commission underestimates how much we have already paid for those mistakes.”
Shortly after 6:00pm yesterday, 3 December, the Commission released an Order Approving Settlement Stipulation with Modification saying:
“Where (under-billing) results from a measurement error … we do not understand why any portion would be borne by other customers.” (Order, page 10, last sentence)
(The Order can be found on the Commission’s website at: www.psc.utah.gov/utilities/gas/gasindx/documents/0805711oasswm.pdf)
Questar estimates that it under-billed 562 customers a total of $1,081,446. The Order records that: “usually more than two years passed before (an) error was recognized.” (page 6)
The Company joined the Division of Public Utilities, Committee of Consumer Services, and Salt Lake Community Action Program to recommend that the under-billed customers should be back-billed for no more than 6 months. Questar estimated that would collect $224,089.
The 4 parties further recommended that the Company pay no more than $480,000 for under-billed gas, while its ratepayers-at-large would be on the hook for at least $377,357.
The Association believes the under-billed total could be much higher, perhaps exposing ratepayers-at-large to the risk of paying more than $10M for Questar’s failure to manage the installation of transponders competently. Whatever the total, most of it was quickly billed to ratepayers-at-large through the Company’s balancing account and (at least) semi-annual pass-through rate-setting proceedings.
The Order says:
“Since the Settlement Stipulation requires Questar to provide a final report of all pre-divide errors, any deviation from the calculations, and their magnitude, will come to light and may be addressed as needed.” (page 8)
The Association remains concerned, because the “final report” will record only cases where transponders are currently under-reporting consumption. Questar began installing transponders in 1996; it didn’t become aware of the problem until August 2005; it now admits 335 under-reporting units were in place by that time; the first of those was installed in May 2003. The Company has few records; they are recent; and the statistics are unconvincing.
Monopoly utilities can be a good deal for everyone BUT ...
One set of pipes or wires saves money Utilities want to maximize profits and
The utility gets all the business and Customers can't choose to go elsewhere so
Customers should get lower prices Ratepayers need regulators to protect us
That's why utility regulation is often referred to as "a surrogate for competition".
Competition is brutal; ask the former CEO of any company that has gone out of business. Utahns used to shop for home improvement supplies at Allied or Ernst; where are they since Eagle Hardware (now Lowe's) and Home Depot came to town?
The utilities want regulators to give them an easy ride, preferably in private to minimize controversy. But ratepayers don't need regulators to create a false facade of respectability for greedy utilities, we need vigorous regulation to protect us from companies that keep asking for more.
Utility customers in Utah pay $17 million a year for regulation; state agencies spend $6½ million, and the utilities spend $10½ million; the money is collected through our utility bills.
Utilities spend countless millions more lobbying legislators and the governor; they hardly ever hear from ratepayers. We'll add details soon.
Just in time for Christmas 2007, both PacifiCorp and Questar asked for rate increases; the total is $188 million. To see more, click here:
Legislators and governors keep changing Utah regulatory law to benefit the utilities. One such change may already have cost Utah ratepayers
$90 million, a number that is growing by $82 million a year, and could soon be growing by $198 million annually. For details, click here:
There is something you can do about it: Join the Utah Ratepayers Association and help educate our elected officials and appointed regulators.
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Last Modified: 4 December 2008