Questar seeks rate cut

Lower natural gas prices across the nation prompted Salt Lake-based Questar Gas on Thursday to seek a $43.4 million cut in its Utah rates.

The new rates, expected to take effect Oct. 1, would lower the typical residential customer's monthly natural gas bill from $72 to $68, a decrease of about 6 percent.

Just three months ago, Questar said a nationwide natural gas crisis had forced it to request a 25 percent rate increase for its 730,000 Utah customers. That rate increase went into effect July 1, but for many of Questar's customers those high rates have not yet been noticed.

While the latest reduction will help homeowners, the new rates will still be 17 percent higher than they were last winter.

"People will not see any kind of price signal until they get their first bill of the cold season," Questar spokesman Chad Jones said. "We hope they didn't forget about gas costs earlier this summer that were going crazy and expect to see lower bills, because they definitely will be higher."

Questar typically files for gas-cost rate adjustments, known as "pass-through filings," in January and July of each year. Questar said the latest decrease was requested early to reflect its lower costs for purchasing natural gas.

For the week ended Aug. 29, natural gas in underground storage for the lower 48 states was at 2,389 billion cubic feet, about 14 percent below year-ago levels. Yet stocks appear to be climbing, up about 70 Bcf, or 3 percent, from the previous week, according to the Energy Information Administration.

Questar contends its rates are among the lowest in the nation due to its company-owned wells, which account for more than half of the natural gas the utility sells in Utah.

Jeff Fox, a consultant for the Crossroads Urban Center, which works to improve the conditions of low-income residents, said the volatility in the natural gas markets has sprung from power companies using natural gas to generate electricity.

And, Fox said, Questar has not adopted a conservation program that would save customers money.

"Questar has refused to adopt demand-side management programs that would reduce consumption of natural gas," he said. "This, combined with greater usage of natural gas across the country, has pushed up prices and made it more volatile."

That volatility worries customers more than high prices alone, Jones said.