As Utah legislators wrestle with possible deregulation of the electrical industry, they can rest assured that natural gas will not provide similar struggles.
Questar Corp. officials told members of the Legislature's Public Utilities and Technology Interim Committee Wednesday that the gas industry started its transition toward deregulation 20 years ago.That transition has not given the average Utah residential customer the right to choose a gas supplier other than Questar. But even if that last step is taken, it may not bring lower gas bills, said Alan Allred, Questar Gas Co. manager of regulatory affairs.
Allred said all elements of the gas business were regulated by federal and state governments until 1978, when lifting of wellhead price controls began.
Deregulation continued until gas prices were determined by market forces, Allred said. And by the early 1990s, pipelines were required to provide open access to all companies, further deregulating the industry.
Large industrial users have taken advantage of the situation by contracting with gas suppliers for lower prices, much as they hope to do with electricity in the near future. But Allred said Questar has not provided that same choice to Utah's small commercial and residential customers.
"We have yet to see as a company . . . a lot of individual residential customers who want that choice," he said.
Pressure from marketing agents and regulators in Wyoming led Questar to fully deregulate the market for its small number of customers there earlier this year. But to this point, no customers have switched to a different gas company, and no gas marketer has stepped forward, Allred said.
He said part of the reason for the hesitation may be Questar's already low rates. In order for another company to offer lower gas bills, he said, it probably would have to cut back on customer service.
Questar Gas, the arm of Questar Corp. that distributes gas in Utah and parts of Wyoming and Idaho, is able to offer low prices in part because about 45 percent of the gas it sells comes from Questar-owned wells. The company can charge below the market rate for its gas.
Allred said that means the average Questar Gas bill for a residential customer was $47 a month, or 64 percent of the national average of $74 per month, according to a September 1997 American Gas Association survey. That ranks Questar's rates as the fifth lowest among 101 gas companies in the survey.
"There's no one really like us," said R.D. Cash, Questar Corp. chairman and chief executive. "We have . . . among the lowest rates in the nation."
Cash said Questar is not pushing hard for the final deregulation step in Utah right now, preferring to wait until consumers, regulators and the Legislature are ready.
D.N. "Nick" Rose, Questar Gas president and chief executive, agreed that his primary concerns with the last step in deregulation - or unbundling - are whether it is what the customer wants and what it might mean for the gas business in general.
"We're not concerned about our ability to operate under unbundling," Rose said.