The rate reduction is part of a sweeping adjustment the gas company hopes to make in the way it collects and accounts for its fixed costs, which include all of the nongas expenses associated with running and maintaining its natural gas distribution system.

"There are no strings attached to this rate decrease, which we think can be ready by Jan. 1," Barrie L. McKay, Questar's manager of regulatory affairs, told the Committee of Consumer Services at its monthly meeting Thursday.

Questar's petition to the Public Service Commission already has the backing of the Utah Division of Public Utilities, which under state law is charged with balancing the interests of utilities and customers in utility rate cases.

The Committee of Consumer Services is withholding approval, however, believing Questar's proposal needs further study.

With its request to the PSC, Questar is hoping to address a long-standing dilemma.

It wants to encourage customers to conserve energy and use less natural gas. Yet, under its current rate structure, the money Questar collects from each customer for its fixed costs is tied to the amount of natural gas used in each home. So when customers cut back on gas use - many already are because of the rising costs of heating homes - the company's revenue suffers and it has a harder time collecting enough money to cover operating expenses.

By partially severing that link, Questar hopes to better stabilize its revenue stream. It also will allow the company to launch a new program to encourage conservation without suffering financial consequences.

"We've set aside over $1 million to help jump-start that [conservation] program," McKay said, indicating rebates for Utahns who purchase set-back thermostats or high-efficiency furnaces could be part of program offerings.

Consumer Services Committee Director Leslie Reberg, however, expressed concern that Questar may have more than just conservation at heart in offering to reduce its rates. "This could be a way for the company to lock in its profits during those times when natural gas usage is declining," she said.

McKay noted, though, that Questar's fixed costs of approximately $235 million a year have changed little over the past 17 years.

The $10 million rate reduction is available because the company adopted a new depreciation method for its fixed assets and was able to get lower interest rates by refinancing its debt. "We'll also take a reduction in our profits," he said.

Utah Clean Energy Executive Director Sarah Wright said that group supports Questar's petition because it emphasizes conservation.

And that, along with a slight rate reduction for consumers, also is what attracted the Utah Division of Public Utilities to support Questar.

"What Questar is proposing is a pilot program, so if it doesn't work we'll be able to easily get away from it," said Connie White, director of the DPU. "It does, though, allow for rates to be redesigned so they can try on any number of conservation programs."