The Committee of Consumer Services, which represents the interests of individuals and small-business owners in utility matters, is wary of the proposal. It argues that instead of benefiting consumers, the new cost-collection mechanism offers a way for Questar to lock in its profits during times when natural gas usage is declining.
"Questar is proposing some pretty sweeping policy changes," said Dan Gimble, chief of the technical staff at the Committee of Consumer Services. "And we really think there should be a thorough and complete analysis of exactly what they are proposing."
The gas company made its offer to lower its rates about $1 a month for the typical residential natural gas user in mid-December. It explained at the time it was facing a dilemma.
It wanted to encourage its customers to conserve energy and use less natural gas. Yet the amount of money the company collects to cover its fixed costs each month now is linked to the amount of natural gas each customer uses. And that can make it difficult for the company to collect enough to cover its operating expenses during those times when consumers are cutting back on their use of natural gas.
Questar's solution is to sever that link.
It wants to separate the amount each customer pays to cover the company's fixed cost from the natural gas usage. So if the amount the company collects falls below what it needs to cover its costs, customers will get charged a little more. If it collects too much, customers would see a rate decrease.
The company also wants to change the way it calculates the depreciation of its system, which it contends will save customers several million dollars a year.
Questar was hoping that the PSC would allow it to adopt the new cost-collection mechanism and depreciation method on an interim basis so it could lower rates by Jan. 1. Yet now, with the Committee of Consumer Services and other ratepayer advocates expressing reservations about the company's proposal, the PSC may call for full-blown hearings on the matter and a decision isn't expected before at least June.
Consumer advocate Roger Ball, the former executive director of the Utah Committee of Consumer Services, told the PSC that Questar is asking to overhaul the current rate-making structure and shift risk away from the company's stockholders to consumers.
"This needs to be considered as part of a general rate case," said Ball, who has asked as a private citizen to intervene in the case before the PSC.
Ball suggested that the company be required to lower its rates $10.2 million on an interim basis, while the Committee of Consumer Services is suggesting to the PSC that Questar be required to lower its rates $4.8 million as an interim decrease, a figure that the utility indicates can be saved by adopting a new depreciation method.
Questar, though, intends to oppose those suggestions, as well as Ball's involvement in the case beyond his offering testimony during public witness day.
"Our proposal stands at it is," Questar spokesman Chad Jones said. "We don't think the rate decrease part of our proposal should be considered or can be considered separately."
He said the Committee of Consumer Services adequately represents the interests of Utah consumers, and Ball's involvement in the case isn't necessary.
Also on Monday, Ball, consumer activist Claire Geddes and 44 other Utahns asked the PSC to reconsider its Jan. 6 decision that approved a $4.9 million-a-year rate increase for Questar Gas to cover its cost of removing troublesome carbon dioxide from the natural gas it supplies to Utah homes.
Ball and Geddes' request to intervene in the case was opposed by Questar and the Committee of Consumer Services and eventually denied by the PSC. Since that denial, the PSC has received more than 1,500 statements from Utahns in support of Geddes and Ball's involvement.
steve@sltrib.com
