Utahns are facing a hike in gas rates

The good news is that Questar Gas customers are getting a refund.

The bad news is that the price of natural gas for Questar's customers is probably still going to go up this winter.

On Friday, the Salt Lake-based utility announced it has asked the Utah Public Service Commission for a 10.4 percent rate increase. The hike amounts to $7.37 more a month for the typical household using 115 decatherms a year.

However, because of a recent commission ruling, rising prices will be softened by a $29 million refund to Questar's Utah customers. Taking the credit into account, customers will see their gas bills increase about 6.5 percent, or $4.64 a month for the typical household.

The increase is scheduled to take effect Oct. 1, subject to approval by the commission.

"We're going to have to look at it," said Julie Orchard, a commission spokeswoman. "We have a process for reviewing these types of requests. We'll have to get recommendations from both the Division (of Public Utilities) as well as the Committee (of Consumer Services) and then we'll be reacting quickly."

Jeremy Johnston, a resident of Salt Lake's Canyon Rim area, said increases are expected once in a while.

"It's just disappointing when it comes at a time when our economy is really struggling to recover," Johnston said. "It's taking dollars out of the pockets of consumers and investors."

A line-item credit will appear on customers' bills in the next 12 months titled "PSC ordered gas-processing refund." The $29 million refund amounts to roughly $39 for each of Questar's 750,000 Utah customers, but it could be higher or lower depending on a customer's historical natural gas usage.

The refund stems from a commission order in August, which said Questar was not entitled to recover costs associated with a natural gas processing plant near Price. The processing plant was built as a temporary solution to account for lower-heat composition gas supplies introduced into Questar's pipeline system.

About two-thirds of a customer's bill reflects the cost of natural gas itself. Twice a year, the utility adjusts rates to reflect the cost of changing supplies through so-called "pass-through" filings.

"The price we're paying for supplies on the open market is higher than current rates cover," Alan Allred, Questar Gas president and chief executive, said in a prepared statement. "This request is being made

now so we can keep up with higher prices this winter."