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Questar Considers Changing Rate Structure for Fixed Costs

Questar Considers Changing Rate Structure for Fixed Costs



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SALT LAKE CITY (AP) -- As a way of dealing with revenue reductions due to customers' conservation, Questar Gas is considering changing how it charges for fixed costs.

"We've been looking at a number of alternatives that will help put us in the position where we can both encourage our customers to conserve and still collect enough to meet our costs," said Barrie L. McKay, Questar's manager of regulatory affairs. "And we can say that regardless of what we propose, nobody's bill will go up one iota."

Customers are charged according to how much natural gas they use. That means those who burn less natural gas pay less toward all of the company's costs, including the fixed costs, such as worker wages, trucks, equipment and buildings.

Questar is considering asking the Public Service Commission to let it put a separate charge on monthly bills for the fixed costs, said Connie White, director of the state Division of Public Utilities. Other parts of the bill would go down to balance out the new cost category.

"You really want to encourage people to conserve and use less gas, but at the same time you don't want to put the company in the position where they are going broke," she said. "There are probably a half dozen approaches now being used in other states, and getting to the best one for us (Utah) is the challenge."

McKay said Questar started studying the fixed-cost issue nearly three years ago, and, "We've talked with the Committee (of Consumer Services) staff, the Division (of Public Utilities) and community groups."

The Committee of Consumer Services, which is supposed to represent the interest of residential, small business and farm customers in utility matters, said it did not know anything about Questar's plans.

"The Committee is aware of recent discussions between Questar Gas and the Division regarding alternatives to deal with Questar Gas' decline in revenue," said spokeswoman Christine Keyser. "To date, nothing has been filed" with the PSC."

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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