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Paying for Questar's mistake
This is an archived article that was published on sltrib.com in 2007, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Questar wants us to pay $1.7 million a year for an indeterminate period to bail out communities that earlier made deals with the utility. Back then, they claimed having natural gas would help their economic development; now, the cost is deterring new industry.

The economic development argument doesn't add up. This is about subsidizing rural residents and business owners who want out of a deal they once welcomed.

Majority Whip Gordon Snow, R-Roosevelt, has been enlisted to run House Bill 269. It adds a rural economic development advocate to the Committee of Consumer Services to dilute the committee's statutory duty to represent the majority of ratepayers.

To get utility service at a new home or business you must typically pay a connection charge - kind of an impact fee. If you build close to existing facilities, it's a flat rate that, on average, allows the utility to recoup the costs of extending its infrastructure. But if you build far from other customers, even in Salt Lake County, expect to pay a much higher amount related to the actual cost of extending pipes to your location.

Twenty-plus years ago, communities in Sanpete, Sevier, Piute, Iron and Washington counties - far outside the Questar's service territory - wanted the advantages of natural gas in place of solid fuel or propane. They said it would help attract new jobs.

Questar initially declined to expand its infrastructure because it thought the Public Service Commission unlikely to approve a rate increase for existing customers so the company could depreciate such investment and get a return on it.

Municipalities thought about bonding for their own gas utilities. Questar didn't want that; it preferred to extend its monopoly. A deal was struck: Questar built the pipes to bring gas to those communities and customers who took service agreed to pay a little more for 10 years. In places like Manti, Richfield and Cedar City, higher rates ended almost 10 years ago.

Smaller communities, farther from Questar lines, agreed to pay extra for 20 years. Places like Beaver, Enterprise, Fillmore and Emery County have six or seven years left.

From 1995, Questar found another way of charging in places where the economics of extending service were even less attractive: surcharges (as much as $30 a month) with indeterminate (depending on how many customers took service) expiration dates.

Customers in the Ogden Valley have completed their commitment. Those in places like Panguitch, Cedar Fort and Clarkston have perhaps eight or nine years left.

Now, Questar wants the rest of us to make the remaining payments for communities with outstanding obligations. They say rates are unjust and unreasonable because people who chose - no one was compelled - to sign up are paying more than customers in Questar's original service territory and the expansion areas that have completed their payments.

A retired couple across the street bought their house almost 30 years ago and have paid off their mortgage. I bought mine 12 years ago when the price was much higher, and have several more years to pay. Should my neighbors have to help meet my obligations?

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* ROGER BALL, former director of the Committee of Consumer Services, is now moderator of the Utah Ratepayers Association.

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