Questar Gas Co. made a formal request Thursday to the Utah Public Service Commission for a $190 million two-phase, pass-through rate increase in its Utah natural-gas rates.
If approved, the utility said the monthly bill for the typical residential customer would increase by about $12.50 on July 1 and by another $12.50 on Oct. 1.
Pass-through changes involve the company's gas-related costs. Questar Gas Co. said the increases are needed to pay for the higher cost of gas it buys from other companies.
During a meeting with the Deseret News Editorial Board on Tuesday, company executives said they would submit a request to raise rates that was "the same as our highest in the past." The typical Utah household currently pays about $55 per month for natural gas, but the increase would raise the typical monthly bill to $75 to $80.
The company currently has a general rate case pending before the commission to pay for fixed, non-gas operating costs. If approved for the requested $22 million, the typical residential customer would see an increase of about $3.20 on their monthly bill.
The company said the utility typically asks for commission approval twice yearly to adjust rates to reflect changing supply costs, which are passed on to customers with no markup. The company said it based the requests on forecasts of what it will cost to buy natural gas supplies for customers.
Since the last rate adjustment in November 2007, the market price for natural gas has nearly doubled, with current forecasts showing that rates need to be increased by a total of 45 percent to cover future supply costs, the company said in a news release.
"We regret we must raise rates now, when family budgets are strained by higher gasoline and food prices," said Alan Allred, Questar Gas president and chief executive officer. "But we've held the line on rates as long as possible in the face of increased supply costs, and failure to reflect these costs now will result in larger and more painful increases later."Allred said the intent of the two-step approach is to collect only what the utility needsd to cover costs to buy gas and meet customer demand this summer. He added that if natural-gas prices remain at or near current levels, the second phase would be implemented in the fall.