Mountain Fuel Supply has received permission to boost rates, but the increase will be about $10.3 million less than the company wanted.
In an order released Wednesday, the Utah Public Service Commission approved a rate increase of about $76,000 for the natural gas utility. The bulk of that increase is expected to affect residential customers when the company files its new rate schedule.Mountain Fuel spokeswoman Louise Jacobsen said that while the rate increase is substantially less than the company wanted, the fact that rates will increase validates the company's rates over the past five years as being reasonable.
But the company believes the increase will not adequately meet future revenue needs, Jacobsen said.
This was the first general rate case for Mountain Fuel since 1985 and was filed at the request of the commission. The commission is also currently hearing general rate cases for Utah Power & Light and US WEST Communications.
Mountain Fuel asked for a $10.4 million rate increase, but the Utah Division of Public Utilities recommended a $60,000 decrease and the Utah Committee of Consumer Services sought a $4.9 million reduction.
Earlier this month, Mountain Fuel received a 2 percent pass-through increase to cover increased costs affecting gas purchases.
As part of the order, the commission directed Mountain Fuel to return its gas-planning function, which has been performed in the past by sister company Questar Pipeline, back to the company's control.
The commission also ordered formation of a task force to study a number of other issues for future recommendation, including development of a least-cost plan for the company.
Jacobsen said reassigning the gas-plan function to the company was not expected but said working with the task force will be a new experience for the company.
In an unusual move, commission Chairman Ted Stewart issued a partial dissent to the order. In that dissent, he criticized fellow commission members for rejecting outright the committee's call for a 10 percent disallowance for transactions by the company involving its affiliate companies.
Stewart said a recent case involving US WEST included a similar request, and, he noted, the commission's decision in that case required the company to bear the burden of proof in order to have both allowances rejected.
Stewart said Mountain Fuel not only failed to meet that test but there was clear evidence Mountain Fuel made almost no effort to substantiate that its affiliate transactions were reasonable.
Stewart also criticized the company for its lack of cooperation with the committee and division in exchanging information needed to prepare testimony.