Questar files for rate cut

Questar Gas on Friday filed for a rate decrease that could lower the average customer's monthly home heating bills by $8.67 beginning Feb. 1.

Friday's announcement of the filing with the Utah Public Service Commission replaces an earlier request this week by the Salt Lake-based utility to reduce natural gas rates $2.67 per month.

But a new forecast suggests natural gas prices will fall even further in the next 12 months, prompting the latest adjustment.

"Whenever forward price trends give us the opportunity, we are going to reduce rates," said Curt Burnett, a spokesman for Questar. "We don't make any money off gas-cost adjustments."

The $93.7 million reduction, which must get PSC approval, means a typical customer's bill will fall about 8 percent, or $104 a year.

In 2005, Questar raised rates 38 percent. Much of that increase was linked to hurricanes that knocked out 20 percent of the the U.S. natural gas supply.

Questar said in a statement Friday that the price of natural gas has fallen by 50 percent since the hurricanes damaged Gulf facilities.

"People just don't understand the impact that a hurricane wiping out 20 percent of your production can have," Burnett said. "They don't know how a price that is being posted in New Orleans can have an effect on Utah gas bills."

Roughly half of the natural gas reaching Utah homes comes from Questar Gas-owned reserves. The other half is purchased on the wholesale market, which in the past year has been the subject of wild price swings.

"This has been a tough winter for our customers," said Alan Allred, president and chief executive officer of Questar Gas. "But what many in our community don't understand is that high prices also hurt Questar Gas. Utilities don't make money on rising prices."

Dan Gimble, chief of technical staff for the Utah Committee of Consumer Services, said Questar Gas does not earn a profit off natural gas it purchases on the wholesale market for its customers. The utility's profits come from investment in pipes and its distribution system. But, Gimble added, Questar does earn a profit from company-owned natural gas.

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