The Public Service Commission has approved a three-year test of Questar Gas Co.'s "conservation enabling tariff" - a new billing method the utility says will allow it to encourage natural gas conservation without it suffering any loss of revenue.
Under the CET method, set to take effect Nov. 1, consumers won't see the same immediate rewards they enjoyed in the past after reducing their use of natural gas. Today, customers who cut consumption by $1 would save approximately $1.30 on monthly bills.
The gas company argues that there will be more positive benefits in the long run under its program - benefits that will result from consumers and the company finally working toward the same energy conservation goals.
"We're excited finally to be on the same [conservation] page as our customers," Questar Gas spokesman Chad Jones said. "And hopefully we will have some conservation programs approved [by the PSC] so we can begin offering them by January."
Among the first conservation measures Questar Gas is considering would be a rebate program that would offer customers a break if they purchase energy-efficient natural gas appliances.
The utility also is considering offering similar programs for small business owners and homebuilders who install approved natural gas appliances.
Questar customers also eventually might see the utility offer home energy audits for a fee. Homeowners would receive advice on steps they could take to cut gas bills, such as weatherizing their homes, installing energy-efficient windows and using low-flow shower heads.
Questar then might offer a discount on the cost of the home energy audit if customers could prove they followed its advice.
The gas company argues that full implementation of its CET program ultimately would enable it to purchase less gas for its customers on the open market, which in turn would reduce monthly bills.
Questar Gas fought long and hard to convince regulators to give its program a try. In September the company, the Committee of Consumer Services and the state's Division of Public Utilities reached an agreement to test the program. The Public Service Commission now has signed off on that deal.
The company maintains that the new billing method will allow it to address a long-standing problem. Under rate structures, the amount Questar collects from each customer to cover its fixed costs - expenses that include employee wages, the outlays for its buildings and expenditures on its pipe, trucks and other equipment - is tied to the amount of natural gas used in each home.
If a customer is successful in cutting natural gas use, he or she would save a bit more than just the cost of the fuel. From the company's viewpoint, when a customer cuts back, Questar has a harder time collecting the money it needs to run its distribution system.
Questar's solution is to sever the tie between its fixed costs and natural gas usage. That way, the company always will be assured of collecting the money it needs to run its system and then will be free to set up conservation programs.
Committee of Consumer Services acting director Reed Warnick said his watchdog group will be monitoring Questar's new program closely and will be working to draft alternatives that might be fairer to ratepayers.
He has asserted that one problem with Questar's program is that the company will be protected from any decline in revenue, regardless of whether it is the result of conservation, higher natural gas prices, a recession or even fewer customers signing up for service.
"One of the reasons we agreed to the pilot program is that it will give us time to explore alternatives that may be fair," he said.
steve@sltrib.com
