Natural-gas prices for cars to soar in Utah

The Utah Public Service Commission issued an order Tuesday that will increase the price of a gallon equivalent of compressed natural gas for vehicles by 188 percent by next summer

According to commission spokeswoman Julie Orchard, the order calls for the hike to take place in two phases during the next six months. The first phase would increase the price of compressed natural gas to $1.14 per gallon beginning immediately, after the price earlier this week had been 80 cents. A second increase coming on July 1 would push the price up to $1.43 per gallon.

The move surprised officials at Questar Gas Co., the state's top provider of natural gas fuel, said spokesman Darren Shepherd. The company has not yet decided if the increased revenue would be spent on improving and expanding the infrastructure to more effectively deliver fuel for an increasing number of natural gas vehicles on Utah roads, he said. "The (PSC's) order didn't state how the revenue would or should be spent."

He said the utility was very interested in making improvements to the system as long as it made sense financially.

Orchard said that the commission issued the ruling at a time it thought appropriate, following lengthy talks regarding proposed changes in pricing between natural gas for residential use and natural gas fuel designed for transportation.

The fuel order arose from a rate case that Questar had submitted in December of last year, said Michele Beck, executive director of the Committee of Consumer Services. In that case, the utility had asked the commission to set separate rate structures for residential natural gas and compressed natural gas used for transportation fuel, she said.

The company contended that residential and industrial customers were paying higher rates and unfairly "subsidizing" the price that natural-gas vehicle drivers were paying at the pump, a claim that Beck's state watchdog agency supported.

"We want to make sure that natural-gas vehicle customers understand where this increase is coming from," Beck said. "It's not a conspiracy or sign of rapid price increases yet to come. Rather, it's just bringing the cost of purchasing that natural gas in line with the cost of providing it."

Another part of the order calls for a decrease of about $5.29 per year, or 44 cents per month, to the typical customer's household natural-gas bill, a change of 0.64 percent. The rate change would only affect a small portion of natural-gas service costs, for non-gas costs like pipes and meters to homes and businesses, not the actual cost of the gas itself, the commission order said.