Utah Ratepayers Association

Education and Lobbying for Ratepayers of Utility-type Services with Limited or No Alternatives

Rural Gas

Press reports of the 9 January meeting of the

Committee of Consumer Services

and the Committee's press release

Higher rural gas rates are assailed

Dave Anderton - Deseret Morning News 10 January 2007

The state's utility watchdog group believes consumers in five rural counties may be paying unjust rates for their natural gas service, but the Committee of Consumer Services stopped short Tuesday of endorsing a plan that would lower the rates.

For several years, rural area customers have paid an additional $16 to $30 a month to cover the costs of extending natural gas lines to their counties. Some of those counties have paid the higher fees for nearly 15 years. They now want to share those costs with all Questar Gas customers in an effort to promote economic development.

A recommendation to spread $1.7 million of those costs to 830,000 Utah Questar Gas customers is now before the Public Service Commission. Questar supports the plan, which would lead to an increase of 19 cents a month per customer.

Rob Adams, director of the Beaver County Economic Development Corp., said he is disappointed but not surprised by the committee's decision.

"I don't really have anything against the committee, but they act like that unless you live along the Wasatch Front, they could care less what your problems are," Adams said. "The statement that they made today was nothing more than to placate me."

In a resolution, the committee said rural rates "do not now appear to be just and reasonable."

Committee Chairman Dee Jay Hammon said the rural rates need to be scrutinized in a general rate case.

"We have not seen any justification for them," Hammon said. "We want someone to evaluate it. Our feeling is when we go through it, it will show that the (rates) are not just and reasonable."

In a prepared statement, the committee said it had two major concerns with the proposal.

"One concern is the accuracy of the $1.7 million that Questar has requested," the statement said. "Another concern is that Questar proposes to permanently include the $1.7 million annual charge in standard customer rates."

However, Adams feels let down by the committee.

"They have affirmatively and without reservation said, 'We don't represent you. We represent the masses along the Wasatch Front, and we could care less if you have higher poverty rates, if you have difficulty attracting industry to your counties. It doesn't matter to us. We don't care,"' Adams said.

Chad Jones, a spokesman for Salt Lake-based Questar Gas, said a portion of costs to extend natural gas service to any customer is always borne by every customer.

"The payback on those costs to us is years and years," Jones said. "We're supporting the task force recommendations, but if the commission doesn't deem it in the public interest, we're happy to go on collecting these revenues as we have for years and will for years into the future."

A PSC hearing on the matter is set for 9 a.m. Feb. 8, with public comment scheduled at 4:30 p.m.

E-mail: danderton@desnews.com

Questar seeks to recoup costs

Questar wants all its customers to help pay for pipelines to remote areas of the state

By Steven Oberbeck - The Salt Lake Tribune 10 January 2007

Questar Gas wants all its customers to start paying $1.7 million more a year - or $2.28 per household - to help about two dozen rural Utah communities pay off their debt to the company for natural gas service.

But the Committee of Consumer Services said Tuesday that before it can weigh into what promises to be a heated debate, Questar is going to have to give it some hard numbers.

The rates those communities are now paying don't appear to be just and reasonable, said CCS chairman Dee Jay Hammon. "But we don't know. Questar hasn't provided us with all the data we need to make any kind of determination."

For the past 12 years or so, many residents of Beaver, Millard and parts of Iron, Washington and Emery counties have paid an extra $16 to $30 a month on their gas bills. The charge - originally expected to appear on customer bills for about 20 years - was designed to reimburse Questar Gas for extending its pipelines and service into those areas.

Now Beaver County officials say the extra charge is just too much and that it is costing them jobs and economic growth. They want the Public Service Commission to make all of Questar's customers pick up the rest of the tab.

Questar is supporting Beaver's request. So is the Utah Division of Public Utilities.

The CCS is charged with representing the interests of all Utah residential utility customers, and committee director Michele Beck said any decision on how the remaining costs of extending service to the rural communities is to be paid depends on an accurate accounting of the revenues paid to Questar. Moreover, she said, the committee believes a detailed and thorough review "can only appropriately occur in a general rate case."

Questar spokesman Chad Jones said the utility has provided information for some of the communities that were paying "EAS," or extended area service, rates. But other communities were paying under a different rate structure known as "GSS" and Questar has never been asked to provide that data.

"We'll go back and get that information if someone makes a formal request," he said.

Utah consumer advocates Claire Geddes and Roger Ball both spoke out against the proposal.

"There is no benefit to most of Questar's customers, so it shouldn't be allowed," Geddes said.

Ball said the communities willingly entered into a contract stipulating they would pay the extra monthly charges in exchange for Questar service. "They were delighted at the time. Now they are not, and I'd say to them: 'Sorry, tough luck, but it's a contract.' "

The Public Service Commission has scheduled a hearing on the matter for Feb. 8. The public is invited to offer comments to the commission beginning at 4:30 p.m. in person at the Heber Wells Building, 160 E. 300 South in Salt Lake City, or by telephone by calling the PSC's offices, 530-6716. Comments also can be submitted by e-mail to mlivingston@utah.gov.


Committee of Consumer Services' press release

Ratepayer Advocate Questions Reasonableness of Rural Community Natural Gas Rates

To read the press release, click on http://www.ccs.utah.gov/docs/CCSpressreleaseGSS-EAC.pdf

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Last Modified: 3 June 2007