Questar seeking $62.9 million natural-gas rate decrease

The utility on Thursday said that rather than implementing the second phase of a two-phase rate increase this fall, it will seek approval from the Utah Public Service Commission for a $62.9 million decrease.

If approved by the commission, the switch means that the typical consumer will not see bills rise $12.50 per month, as the company had expected to start Oct. 1. Instead, the typical bill will shrink by $3.58 monthly starting Nov. 1.

The reason is that the cost of winter natural gas that Questar buys from other companies to supply customers is now projected to be a little more than half of what the company had expected in June.

During a Thursday conference call with reporters, Ron Jibson, Questar's president and chief executive officer, said that the utility had noted in June that "things change quickly, and we've seen that happen over the years with different events and different situations with natural gas supplies. ... So instead of having the large increase that we were proposing in October, you can now see that that has resulted in a large rate decrease, effective Nov. 1."

In June, the utility filed for a $190 million, or 44 percent, increase that would have occurred in two phases. The first phase, at $12.50 monthly on the typical bill, kicked in on July 1. Another $12.50 per month decrease would have taken effect Oct. 1, but that has been replaced by the $3.58 decrease per month, which equates to about $43 annually on a typical bill, or 5.3 percent.

In a news release, Jibson said this would be the third consecutive year for natural-gas costs to drop entering the winter heating season. Record-high costs for buying natural gas on the wholesale market earlier this year prompted more investment in development in the Rockies, leading to higher regional production and lower costs for customers, he said.

"We feel very good about this," Jibson said during the call. "We feel like it is very good news for our customers."

As of July, Utahns paid the second-lowest average rate for natural gas, trailing only Alaska.

"This (rate decrease) will continue to keep us in that position, and certainly our objective as a company is to be efficient and do the things that we need to to continue to maintain that position," Jibson said.

Michele Beck, director of Utah Committee of Consumer Services, did not return a phone call seeking comment Thursday.

E-mail: bwallace@desnews.com

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