Utah Ratepayers Association

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Rural Gas


Press Reports of the 8 February

Public Service Commission Hearings

Gas hike plan gains support

Committee of Consumer Services is poised to back higher costs for Questar customers

By Steven Oberbeck - The Salt Lake Tribune - Friday, 9 February 2007


Questar Gas has a new and unexpected ally in its quest to raise Utahns' natural gas bills by $1.7 million a year - or $2.28 per household.

The Committee of Consumer Services, which under state law must look out for the interests of the majority of residential utility customers, appears ready to back Questar's bid to help nearly three dozen rural communities in the state pay off their debts to the utility.

That means 825,000 of Questar's Utah customers, with the backing of the committee, probably will soon see their bills go up so that 8,600 households in the rural areas of the state can pay a lot less each month.

"Am I the only one who believes that isn't fair?" asked Roger Ball, a former director of the Committee of Consumer Services who was fired by Utah Gov. Jon Huntsman Jr. in early 2005 after his transition team argued Ball fought too hard and aggressively to keep utility rates down.

Ball appeared on his own behalf at a Public Service Commission hearing on Thursday to question representatives of Questar, the state's Division of Public Utilities and the committee who want to raise Utahns natural gas bills.

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

Lately, though, those communities have started complaining the extra expenses are squelching their economic growth and costing them jobs. So with the backing of Questar they have asked the PSC to make all of Questar's customers pick up the rest of their tab.

Initially, the committee balked at throwing support behind Questar, arguing that while the rates those rural residents were paying didn't seem fair, it didn't have enough data to take a stand.

It now appears that is no longer the case.

Michele Beck, the Committee of Consumer Services' newly appointed director, acknowledged Thursday the committee's staff is in settlement negotiations with Questar. She said the terms of the proposed agreement are confidential.

Yet, a letter submitted on Tuesday to the PSC by Utah Assistant Attorney General Trisha Schmid, who represents the state's Division of Public Utilities, informed the PSC of the details of a "settlement in principle" being considered by the division, Questar, and the committee.

That settlement, according to the letter, will ask the PSC to eliminate the extra charges that rural residents now pay so that all of Questar Gas' customers can foot the bill.

During his questioning, Ball pointed to state law that requires the committee to represent the interests of the majority of Utah utility customers. He also asked, tongue in cheek, if that majority was represented by 825,000 Questar customers or the 8,600 customers living in the rural areas of the state.

Committee attorney Paul Proctor bristled at the question. He pointed out that under state law, the committee gets to decide what is in the best interest of the majority of Utah ratepayers.

The committee's staff is expected to ask the six committee members to formally sign off on a settlement at their next meeting on Tuesday. If an agreement can be reached on the terms of a settlement, the PSC intends to hold a hearing on Feb. 28 to consider approving the pact.



Costs of rural gas may shift

Utah consumer panel backs Questar subsidy

By Dave Anderton - Deseret Morning News - Friday, 9 February 2007


Utah's consumer watchdog group is backing a plan by Questar Gas Co. that will increase natural gas rates 19 cents a month per customer in an effort to subsidize service to 34 rural towns and cities.

The Committee of Consumer Services said Thursday that it was in negotiations with Salt Lake-based Questar and the Utah Division of Public Utilities on a deal that would lower natural gas rates in rural areas.

The settlement would shift $1.7 million of rural natural gas costs annually to 830,000 Utah Questar Gas customers.

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.

"It seems to me that the committee director, attorneys and staff are backpedaling away from any opposition to this application as fast as they can," said Roger Ball, the former director of the consumer committee who now heads his own consumer watchdog group, the Utah Ratepayers Association.

"Years ago these communities came forward pressing for natural gas infrastructure to be extended to them. It does not appear to be fair now for those people to come forward to Questar and the commission and say, 'Get us off this hook that we voluntarily impaled ourselves on and make everybody else pay."'

Rob Adams, director of the Beaver County Economic Development Corp., said he is grateful for the backing of the committee, which up to this week questioned whether subsidizing rural gas service was in the best interests of Utah ratepayers.

"It appears that we're all headed in the same direction," Adams said. "I just think it took a lot longer than it needed to."

In filed testimony, Craig Val Davidson, administrator for the Beaver Valley Hospital and the Milford Valley Memorial Hospital, said high natural gas rates have made it more difficult for rural hospitals to remain financially viable.

"In order to keep our hospital staffed, we must offer competitive rates to nurses," Davidson said. "The savings that could be gleaned from lower utility rates would provide a welcome and significant boost in our ability to meet our goal of providing high-quality health care to our patients."

But other citizens, like Roy Goodwin of Ogden, oppose paying the rural subsidy.

"Let me see if I've got this right. Approximately 12 years ago Beaver County agrees to pay Questar for the cost of extending the gas pipeline to Beaver County and now decides that it would be good for the rest of Utah to pay off the balance?" Goodwin said in filed testimony. "I wish I could work out something like that for my house payment."

Michele Beck, director of the consumer committee, denied that Gov. Jon Huntsman Jr. or the Legislature was pressuring the committee to back Questar's application. The six-member committee likely will vote on the settlement agreement at a meeting Tuesday.

"Legislators from some of the affected geographic regions have let us know their concerns," Beck said. "But there has been no direct pressure or indirect pressure or no threats or warnings."

Despite the news of a possible settlement, the Public Service Commission continued with a scheduled hearing Thursday that at times became contentious.

At one point, Ball asked Adams whether he was "now or ever had been a socialist."

Attorneys for Questar and the consumer committee objected to Ball's line of questioning, which led to a reprimand by Ball toward the state's and Questar's attorneys.

"How terribly sensitive you all are," Ball said. "This is supposed to be a public hearing, conducted by the Public Service Commission, reviewing an application by a public utility, in concert with the Division of Public Utilities. At what point does 'public' become not public?"

E-mail: danderton@desnews.com

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Last Modified: 3 June 2007