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QUESTAR GAS: Committee of Consumer Services cuts a deal
This is an archived article that was published on sltrib.com in 2005, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

When one side wins a war on the battlefield, it does not usually bargain away its victory in the peace talks. But that's what the Committee of Consumer Services has done in its war with Questar over who should pay to remove excess carbon dioxide from natural gas.

In 2003, the committee won a victory for consumers in the Utah Supreme Court, which ruled unanimously that the Public Service Commission had erred in allowing Questar to pass to ratepayers about 68 percent of the cost of removing excess carbon dioxide. The gas company was forced to refund $25 million, plus interest, to ratepayers.

However, last month, the committee cut a deal that would allow Questar to pass 90 percent of carbon-dioxide removal cost to ratepayers in the future, about $4 million a year between 2005 and at least 2008. In exchange, the gas company would agree not to try to recover from consumers about $15 million in gas treatment costs it incurred in 2003 and 2004.

Maybe that was the best deal the committee could cut in behalf of consumers, but we doubt it.

Here's some background. In about 1989, Questar Pipeline, a sister company of Questar Gas, began accepting gas recovered from coal beds east of Price onto its system. The heat content of the coal-bed gas was lower than that of the gas traditionally supplied to Utah consumers. Excess carbon dioxide from this coal-bed gas posed a safety threat to Utah customers, whose appliances were adjusted to burn gas with higher heat content.

To remedy the problem, Questar Gas contracted with Questar Pipeline to build a processing plant to remove excess carbon dioxide, and, with PSC permission, passed much of the cost to Utah ratepayers.

The Supreme Court held in 2003 that the PSC had erred by not examining whether the two affiliated companies put their interests ahead of consumers' and questioning why Questar Gas never sought a ruling from the Federal Energy Regulatory Commission that might have imposed the entire cost on the gas producers.

To this day, no one has taken this issue to FERC. Questar claims a FERC ruling might actually cost Utah consumers more. To explain this and other options for dealing with carbon dioxide, Questar held a series of technical meetings with utilities regulators, but no independent experts were there to challenge the gas company's presentations.

From this flawed process came the new settlement.

Flawed process
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