SALT LAKE CITY — Questar Gas will get only a fraction of the rate increase it asked for in December 2009, leaving customers with a long-term increase of about 40 cents a month in their natural gas bills.
Under a deal announced Thursday by the Utah Public Service Commission, Questar is allowed up to 10.35 percent, or $2.6 million per year, in profits. The change is effective Aug. 1.
The rate increase of about 1 percent will fund operating costs and is unlikely to fluctuate for many years, unlike pass-through costs of natural gas, which change about twice a year. The increase will boost total revenue for the company but is less than the rate of inflation.
In December, the regulated natural gas monopoly asked for an increase of $17.2 million per year for non-gas costs. Groups such as Rocky Mountain Power, the Utah Association of Energy Users and the Salt Lake Community Action Program intervened before the commission.
Instead of granting Questar its entire request, the settlement announced Thursday allows Questar to charge incrementally for infrastructure improvements, negating the need for a large, lump-sum increase, according to Questar spokesman Chad Jones.
Customers will be charged on their monthly bills as soon as new pipes are in the ground. Next year, the company plans to spend $30 million for new pipes and feeder lines. That will go up to $39 million, $45 million and $44.5 million over the following three years, respectively.
For general customers, that will further increase bills by about 30 cents a year, Jones said.
Under Thursday's settlement, Questar will continue its popular Thermwise and conservation-enabling programs, which have been on a trial basis for three years.
"They've been wildly popular," Jones said of the programs that provide customer rebates for things like energy-efficient furnaces, added insulation and window weatherization.
The decision to make such programs permanent is important in meeting green goals for 2015, said Kevin Emerson, senior policy and regulatory associate for Utah Clean Energy.
"Investments like that from Questar or any utility company represent what we think is the most important investments — they're going for less demand," he said. "This is a win-win for businesses and customers, and the environment."
Emerson added that Utah Clean Energy sees conservation as a resource in its own right, just like oil or gas. But compared to traditional resources, increased efficiency reduces demand for energy and adds jobs for things like retrofits and green building.
The settlement also requires Questar to participate in a $1.5 million program for low-income customers. It will spend $14.7 million on natural gas infrastructure for vehicles, according to the settlement, but similar investments considered in the future will have to go through the commission.
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