After years of effort, Panguitch residents are just a few steps away from getting natural gas service.
But a legislative victory for them could mean slightly higher gas bills for other customers of Questar Gas Co., formerly Mountain Fuel.If adopted, HB180 would let Questar seek a rate increase of up to one-fifth of 1 percent from the Public Service Commission to cover costs of extending service to rural parts of the state.
The Senate Business, Labor and Economic Development Standing Committee voted 4-2 Friday to send the bill to the Senate floor. The measure was approved in the House of Representatives late last month.
Alan Allred, Questar manager of regulatory affairs, said HB180 could lead to an increase of $1.10 or $1.20 per year in everybody's gas bill, depending on how many cities want the service, how much gas they use and how quickly they grow.
For now, Panguitch is backing the bill, hoping it will find success after more than five years of trying to extend the nearest natural gas line about 20 miles into town.
Allred said about 600 Panguitch residents already have agreed to pay an extra $30 a month for 15 years to pay part of the $3.2 million cost of the project. Such fees have been used in the past to bring service to new areas, but Allred said that alone would not pay for the Panguitch project. To pay the entire cost, he said, the town's residents would have to pay an extra $70 a month or extend the payments over 30 years or more.
Since that would be too much for the town's residents, he said, Questar may eventually ask to increase the rates of other customers to help subsidize the expansion. But that would not happen for at least a year, Allred said.
"If we go to Panguitch, the rates will not (immediately) change for other customers," he said. "And (any change) could be even less if Panguitch grows faster or uses more gas than we predict."
Bill sponsor Rep. Thomas Hatch, R-Panguitch, has said the town wants natural gas so it does not have to depend on propane, which sometimes has large price fluctuations. He also has said natural gas would help the area's economy.
But Claire Geddes, spokeswoman for United We Stand Utah, said she does not think people's utility bills should be used to pay for economic development.
"This gives (Questar) a way to make captive rate-payers pay for (Questar's) hold on a monopoly in the state," she said Friday. "I am amazed that everyone is so willing to do this."
Other fuels can be used for heating, she said, and the bill could devastate propane providers' businesses.
"When we're talking about heating fuels, there's a free market," Geddes said. "What you're doing is subsidizing one fuel against another."
Sen. David Buhler, R-Salt Lake City, said he had concerns about the bill, but he thinks expansion of gas service will be good for the entire state in the long run.
However, that does not mean the bill faces smooth sailing on the Senate floor.
For example, Sen. Ed Mayne, D-West Valley City, said he thought the bill should be debated by the full senate, but he will probably vote against it there.
Geddes said she is not sure which way the vote will go.
"It could have a good chance just because I get out-lobbied," she said. "At this point, it's me against Questar."