Advocates say Questar should cut rate request
The leader of the Committee of Consumer Services said Monday that after reviewing the utility's rate hike request documentation, the agency has concluded the increase should be only about $100,000.
"They asked for an 11.25 percent allowed rate of return," said the committee's director, Michelle Beck. "Our models showed that they should get 9 percent."
She said that in this case, the 11.25 percent rate of return on the utility's investment would amount to about $14 million of the proposed $22.16 million rate hike. The remaining $8.16 million included "accounting methodology problems, overstated labor costs and miscellaneous expenses."
Beck said the committee and Questar are discussing possible compromises that may reduce the utility's rate request to an amount her agency eventually could support. That amount could be announced in the next few weeks.
In response to the committee's assertion, Questar spokesman Chad Jones said the company's requested rate of return on investment is needed to pay for replacement of transmission lines over the next five years.
Late last year, Questar had requested a $27 million increase, but that amount was reduced to $22.16 million in March.
Questar originally had asked for a 7 percent rate increase that would go into effect by August. If approved, the increase would have meant a $27 million annual hike that would have cost the typical residential customer $3.92 more per month on their natural gas bill. The current request would cost the typical residential customer about $3.20 more per month.
In previous years, the Public Service Commission has approved far less than Questar has requested, Jones said.
"In our last three general rate cases, we started out with a $23 million rate increase request in 2002 and got approved for $11.2 million," he said. "In '99, we asked for $22.2 million and ended up getting $13.5 million, and in 1995, we asked for $9.6 million and received $3.7 million."
E-mail: jlee@desnews.com
Recent comments
It seems the real story here is why is there always such an incongruency...
Reed | May 6, 2008 at 4:10 p.m.
Another person advocating for the consumer instead of the monopoly...
Good Bye Michelle | May 6, 2008 at 9:11 a.m.
