Utah Ratepayers Association
Education and Lobbying for Ratepayers of Utility-type Services with Limited or No Alternatives
Press reports of the 13 February Committee of
Consumer Services vote to support Questar Gas
Questar closer to hiking rates
Group backs passing rural costs on to all customers
By Dave Anderton - Deseret Morning News - Wednesday, 14 February 2007
The state's utility watchdog group on Tuesday voted to back a proposal by Questar Gas Co. that will pass higher rural natural gas costs to all customers.
In a divided vote, the Committee of Consumer Services said it would support a settlement agreement by Salt Lake-based Questar and the Division of Public Utilities that would shift $1.7 million of rural natural gas costs annually to 830,000 Utah customers of Questar Gas.
The settlement, if approved by the Public Service Commission, would mean a 19-cents-per-month hike for all of Questar's Utah customers.
Rural area customers have paid an additional $16 to $30 a month to cover the costs of extending natural gas lines to their counties. Questar said about 8,600 of its customers are currently paying the higher rates.
Franz Amussen, one of two committee members who opposed the settlement, said it bothers him that Questar cannot provide details of what its actual costs are in extending natural gas service to areas like Beaver, Brian Head, Fayette and Panguitch.
"I don't feel that the majority of customers should pay for a very small minority," Amussen said. "If they want to argue it's an economic development issue, then they should take that up directly with the Legislature, not try to do it in rate bases."
But Michele Beck, consumer committee director, said the settlement agreement does not amount to a subsidy for rural Utah.
"A subsidy only occurs if a specific identifiable group is paying significantly more than average rates," Beck said. "When you have a system and you add new customers, sometimes that is going to lower your average rates and sometimes it is going to raise rates because you are going to be right on the cusp of meeting new development."
Roger Ball, the former consumer committee director and an opponent of the settlement, said Questar's request did not deserve the support of the committee and called the economic development advantages "very questionable."
"These folks, in these little communities, chose to take natural gas service over whatever fuel they were using," Ball said. "They knew what they were committing themselves to."
Yet Rob Adams, director of the Beaver County Economic Development Corp., said he would be derelict in his duties if he did not champion a plan to lower natural gas rates.
"Roger Ball is not in the economic development business," Adams said. "You don't know what project is coming down next. You don't know what their infrastructure requirements will be. The key to being successful is you try to minimize the costs of everything."
The Public Service Commission will hear public comment on the issue at 6:30 p.m. Thursday at the Beaver County Administration Building. A separate hearing on the settlement is scheduled for Feb. 28 at the Heber Wells Building in downtown Salt Lake City, with public comment scheduled at 11:30 a.m.
Questar gets boost in plan to raise rates
By Steven Oberbeck - The Salt Lake Tribune - Wednesday, 14 February 2007
The next time natural gas bills go up in Utah, consumers may have someone to blame other than Questar Gas - the committee that is supposed to represent them.
The Committee of Consumer Services on Tuesday decided it would stick up for Questar Gas instead, and support the utility's plan to raise natural gas bills by $1.7 million a year, or $2.28 per household.
The money would be collected from approximately 825,000 Questar customers and used to reduce the bills of 8,600 rural residents by $16 to $30 each month.
"What we are doing is trying to put all Utahns on a fair and equal footing," said Dee Jay Hammon, chairman of the Committee of Consumer Services. "We really think this is best for everyone."
For more than a decade, the residents of nearly three dozen rural towns and cities have been paying up to $30 a month extra on their natural gas bills to reimburse Questar Gas for extending service into their communities.
The communities initially agreed to pay the extra charges until Questar was fully reimbursed.
Lately, however, they have been complaining the high cost of natural gas service is costing them economic growth and jobs.
So with the backing of Questar, rural residents asked the Public Service Commission to make all customers pick up the tab.
Hammon maintained all Utah natural gas users will benefit by giving Questar more money. He said one advantage is that there will no longer be a hodge-podge of utility rates, with some consumers paying more and others paying less. "We'll be able to move forward with this problem behind us."
Initially, the committee balked at throwing support behind Questar, arguing that while the rates those rural residents were paying didn't seem reasonable, it didn't have enough data to take a stand.
And that problem was complicated because Questar didn't always keep track of how much rural residents paid toward retiring the debt they owed the company.
On Tuesday, prior to committee members entering a closed-door meeting to discuss formally supporting Questar's plan, former committee director Roger Ball reminded the group that it wasn't their job to decide whether the rates rural residents were paying are fair.
Pointing to the state law that outlines the committee's duties, Ball noted that members are charged with looking out for the interests of the majority of utility customers in the state.
"Those [rural] rates have been deemed just and reasonable by the PSC" in several previous rate cases, Ball said.
The committee voted 3-2 to support Questar, signing on to an agreement to settle the controversy. Its support for Questar's plan, along with the backing of the Utah Division of Public Utilities, increases the odds that the PSC will approve the request.
Committee member Betsy Wolf voted against the agreement. But she couldn't be specific because the deal remains secret.
Committee director Michele Beck declined to release a copy of the agreement until after Questar gives its permission. The gas company said it may release the details of the settlement agreement today.
The PSC intends to hold a hearing Feb. 28 to consider approving the pact.
Last Modified: 3 June 2007