When natural gas bills rise, Utah cities and the state get richer — about $20.1 million richer this year, according to documents provided to the Deseret Morning News by the state Committee of Consumer Services.

And Leslie Reberg, executive director of the committee, calls that a windfall.

The local taxes are charged as a percentage of a person's total utility bill, so the higher the bill, the more tax a customer pays.

The $20.1 million gain is a projection by Questar Gas Co. based on customer natural gas usage from Oct. 1, 2005, through Sept. 30, 2006. According to the Salt Lake-based utility, local cities will capture an estimated $11.2 million, a 33 percent increase compared to the same 12-month period a year earlier, with the state pulling in $8.9 million, a 32 percent increase.

"Consumers should be protected against the volatility of the natural gas markets," said Reberg, adding that the state should apply energy taxes like it does taxes on gasoline, meaning a flat fee based on usage.

Under a proposed bill released Monday by Rep. Greg Hughes, R-Draper, cities would be required to charge taxes based on usage, no longer receiving a windfall due to rising energy prices.

"Can you imagine how much more is being pulled out of ratepayers' pockets this winter?" Hughes said. "It's astronomical. Questar will tell you we have the cheapest gas in all of the country, but that really doesn't take away the sting of these kinds of increases. So anything we can do to help lessen that, even a little bit, is important."

Instead of imposing up to 6 percent in municipal energy taxes on a customer's total bill, the new legislation, HB309, would implement a historical tax average applied to each decatherm used. If passed, the bill would go into effect in May.

The average would be calculated on what a city has traditionally levied in a municipal energy sales and use tax on a monthly basis from Jan. 1, 1995, through Dec. 31, 2004.

In 2005, Questar customers saw their natural gas bills rise 38 percent, increases that will be excluded from the historical average.

"We understand that this is a revenue to cities," Hughes said. "But if you could level that out and make that revenue for them more dependable and also not harm ratepayers at times where gas costs are so high, it would be a better way to do it."

But while Hughes' legislation seeks to curb what cities may collect off high energy bills, the legislation remains silent on the state sales and use tax, which would continue to be charged as a percentage of a customer's total bill.

Lincoln Shurtz, legislative analyst for the Utah League of Cities and Towns, said the league prefers an alternative method; namely, a rate deduction that would kick in if a particular city's energy taxes exceeded 110 percent compared to the previous year's revenues.