Questar bill to dip by $2.67

Your high home heating bill next month will drop by less than the cost of a McDonald's Happy Meal.

On Tuesday, Salt Lake-based Questar Gas Co. asked state regulators to reduce natural gas rates by 2.5 percent, amounting to a $2.67 decrease in the typical residential customer's monthly bill.

The decrease follows three rate hikes in 2005 that raised customers' bills nearly 38 percent.

The rate reduction is expected to take effect Feb. 1 and will lower a customer's average annual natural gas bill to $1,255 from $1,287.

David Ward, an East Millcreek resident, said the decrease will do little to lower his natural gas bill, which in December totaled $342.25 for his six-bedroom home.

"I won't even notice it," Ward said. "We have done everything we can to conserve. Consumers should be outraged at the actions of the Public Service Commission allowing PacifiCorp to build gas-fired power plants. The PSC has allowed the demand and price to run away. We not only pay more for natural gas but will also pay more for our electricity."

Questar said the decrease is due to lower projected wholesale natural gas prices. About half of the natural gas reaching Utah homes comes from purchases Questar makes on the wholesale market. The rest comes from Questar Gas-owned reserves, delivered at "cost-of-service" pricing.

In a prepared statement, Alan Allred, Questar Gas president and chief executive officer, said market prices for natural gas in the Rockies have more than doubled over the past year, driven by rising global oil prices and supply constraints, including hurricane-related damage to gas-production facilities in the Gulf Coast.

"Normally, we would wait and make this request in the spring," Allred said, "but we want to lower rates now so bills reflect falling gas prices as soon as possible."

Last year, the state's Committee of Consumer Services vowed to look at the "reasonableness" of Questar's rate increases; however, the committee has yet to release any of its findings.

Earlier this month, Gov. Jon Huntsman Jr. called for a federal investigation into possible manipulation of wholesale natural gas prices.

According to a Bloomberg News story, utilities have felt reduced pressure to tap underground storage sites because of mild weather, which started in the middle of December.

The average withdrawal size for the past three storage reports is 22 billion cubic feet, according to Energy Department data. That's compared with an average withdrawal of 116 billion over the comparable three-week period a year ago.

Gas for February delivery dropped 12.4 cents, or 1.5 percent, to $8.45 per million British thermal units as of 9:29 a.m. in New York Mercantile Exchange electronic trading. The price has plunged 8.9 percent this week and is down 25 percent for the year.

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Contributing: Bloomberg News

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E-mail: danderton@desnews.com