Questar Gas is asking the state’s top utility regulators for permission to increase its general rates by $19 million.
If approved by the Utah Public Service Commission, the company’s request would push up the monthly bill for a typical natural gas customer by $1.36, or $16.32 a year.
The requested 2.5 percent increase is designed to cover the rising costs of maintaining and expanding it’s natural gas distribution system, Questar said.
“This is necessary to ensure our system’s reliability and safety,” Craig Wagstaff, Questar Gas executive vice president and chief operating officer, said in a statement. “Even though we’re investing more into our infrastructure to meet customers’ energy needs, we work hard to aggressively control our operating costs and provide natural gas services at rates that are consistently among the lowest in the country.”
Over the past two years, Questar Gas has spent about $150 million annually on its distribution facilities to meet customer growth.
Those efforts included replacing aging feeder lines in communities that included Logan, Magna, Midvale, Pleasant Grove, Salt Lake City and Tooele, spokesman Darren Shepherd said.
The company estimates it will need to invest $200 million more annually over the next few years to ensure reliable service and to meet growing demand for natural gas. It anticipates that by the end of this year it will be serving 56,000 more Utah homes and businesses than it was five years ago, a 6 percent increase.
Questar last filed a general rate case in October 2009.
A general rate case is different from the “pass-through” rate cases that Questar frequently files — sometimes two or three times a year. In pass-through rate cases, the company, which provides natural gas to its customers without making a profit on the fuel, is seeking merely to adjust the amount it charges its customers so it can recapture the money it spent buying natural gas for delivery on its system.
Questar makes its money by charging its customers to deliver natural gas to their homes and businesses. When it needs additional revenue so it can earn a profit and better cover its operating costs — expenses that include the amount it pays for its people, pipelines and trucks — it files a general rate case.
Once a rate case is filed, commissioners have up to 240 days to issue a ruling, which would mean that Questar at the latest can expect a decision on its request by February 2014, PSC spokesman Gary Widerburg said.
Utah consumers, however, may not see the full 2.5 percent increase Questar is requesting.
It isn’t uncommon in general rate cases for the PSC to determine utilities deserve less than they ask for. In its latest general rate case in 2009, for example, Questar asked to increase it rates by $17.2 million. But after months of negotiations with groups the included the Office of Consumer Services, the Salt Lake Community Action Program and representatives for many of the state’s biggest natural gas users, a settlement was reached that saw the company agree to only a $2.6 million increase.
Still, for many Utahns, any utility rate increase can be a burden.
Tim Funk of the Crossroads Urban Center said Utah’s poor are under increasing pressure. They are affected by federal budget cuts tied to the “sequester,” a stagnant job market and reduced funding for low-income energy assistance programs.
“There couldn’t be a worse time for Questar to raise its rates,” he said.
Get help with your natural gas bill
Utah’s Home Energy Assistance Target program (HEAT) and Questar Gas’ Residential Energy Assistance Through Community Help program (REACH) are poised to help income-eligible customers pay their natural gas bills this coming winter. For information about those and other assistance programs, call 211.
Residential natural gas rates
States where natural gas rates are lowest in cost per 1,000 cubic feet include:
North Dakota • $8.10
Colorado • $8.25
Utah • $8.44
South Dakota • $8.59
Wyoming • $8.72
Source • U.S. Energy Information Administration, 2011 figures