PSC says Questar Gas isn't making big profits

The Utah Public Service Commission said Thursday that it is fielding many complaints and questions from consumers asking why state regulators are raising natural gas rates when Salt Lake-based Questar Corp. is earning record profits.

"The simple answer is that Questar Gas Co., the company that delivers natural gas to Utah homes, is not making record profits," the commission said in a prepared statement. "It profits are limited and are regulated by the PSC."

Yet the unregulated Questar Corp., which owns several other unregulated subsidiaries, is reporting high earnings.

Questar Gas Co. makes up roughly 12 percent of Questar Corp., the commission said.

For example, last quarter, while Questar Corp. reported $65.8 million in profits, Questar Gas had a seasonal loss of $9.9 million, the commission said.

The PSC said recent rate increases for natural gas are driven by increases in the wholesale price of natural gas in the marketplace. When Questar Gas purchases gas on behalf of its customers on the wholesale market, it provides this gas at the purchase cost with no markup.

Effective in November, the PSC approved a 20.3 percent rate increase for Questar Gas. The increase represents $196.5 million more the utility will collect in rates.

The change increased the bill for a typical residential customer using 115 decatherms of gas per year by $18.11 per month. However, when combined with a 14.4 percent rate hike that went into effect June 1 and a 6.9 percent hike in October 2004, the typical Utah household's bill has risen nearly $32 per month.