Thousands of Questar Gas natural gas users in Utah will be asked to pay more next winter to heat their homes, boosting the average residential bill by 36 percent to about $75 per month.
Utility executives acknowledged Tuesday that the company will submit a proposed "pass through" rate increase request to the Utah Public Service Commission later this week that would increase customers' bills to levels of three years ago.
Alan Allred, Questar Gas Co. president and chief executive officer, told the Deseret News editorial board that the proposed rate increase "will be about the same as our highest in the past."
"The total increase will take things back to where they were in 2005-2006," he said. He added that would mean bills in the $70 to $80 range for the typical household.
Currently, the typical Utah household pays about $55 monthly for their natural gas service, according to Questar.
Speaking of the utility's history of pass-through rate requests since 2005, Executive Vice President Ronald Jipson said "the last four pass-throughs have been decreases, and some of them fairly major."
Pass-through changes involve the company's gas-related costs.
The utility has decreased rates 7.9 percent in February 2006, 3.6 percent in April 2006, 10.3 percent in November 2006 and 8.9 percent in November 2007.
In a statement, Questar said "current rates were set last November based on gas costs of $5 per decatherm; current prices in this area are in the $9 range and are projected to remain high through the winter."
"We are filing to reflect higher costs in the rates in two phases. The first phase will be proposed to be effective in July and will cover the increased costs this summer. We are asking that the rest of the increase be implemented effective Oct. 1," the statement said.
In response to the proposed rate hike filing, the head of the state's utility watchdog agency said it would be looking into the matter with great interest.
"The unfortunate fact is that commodity prices are rising," said Michele Beck, director of the Committee for Consumer Services. "We are going to have to look at other measures to help consumers control their own energy costs because we can't ask the utility to charge less than they pay for the commodity."
When the official filing is made, the committee will review it carefully to ensure its accuracy and validity, she said.
The company currently has a general rate case pending before the PSC to pay for fixed, nongas operating costs. If approved for the requested $22 million, the typical residential customer would see an increase of about $3.20 on their monthly bill.
Questar said those fixed costs have remained essentially the same over the past 15 years. The company said the wholesale price of gas delivered to customers is passed on dollar for dollar with no markup, but market prices can be volatile.
Last month, Questar Gas said it may make a second general rate-increase request if its current request results in an increase that would not allow the utility to meet its planned capital improvement needs. Questar spokesman Chad Jones said that such a determination could not be made until the current case is decided by the PSC.
Making two requests for general rate increases in one year is not unprecedented. The last time Questar Gas requested two general rate cases in a 12-month period was September 1982 and July 1983.The Public Service Commission is expected to render a decision on Questar Gas Co.'s current rate request late this summer.