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SALT LAKE CITY (AP) -- New projections that the cost of supplying natural gas will be lower than expected the rest of the winter have prompted Quester Gas Co. to seek an 8 percent rate cut for its customers.
The utilities asked the Public Service Commission on Friday to allow the rate cut, which would save the typical Utah natural gas user about $8.70 a month.
Last week, the company asked to lower its rate 2.5 percent, or about $2.70 a month per user.
"The cost of buying natural gas has dropped about half since early December," Questar Gas spokesman R. Curtis Burnett said.
Questar buys about half its natural gas on the wholesale market, but it doesn't make any money on that gas, according to the company. Still, when the price of the fuel rises, the company needs to charge its customers more to cover the increased cost of buying the fuel.
Likewise, when the price goes down, the gas company asks to lower its rates. The Public Service Commission must approve any rate change.
The proposed 8 percent decrease, which Questar wants to take effect Feb. 8, will be the largest decline in rates since Jan. 1, 2002, when the company cut its customer charges by 11.2 percent.
"Natural gas prices have been up and down and all over the place lately," said Connie White, director of the Utah Division of Public Utilities. "The company, though, seems pretty confident the lower prices will stick around for a while."
Questar customer Jeff Gibby said the lower rates are good news. "They probably should lower them even more," he said, noting that he recently put new insulation in his home but his monthly bill didn't go down. "I'll take lower rates anytime."
The company cautioned its customers that natural gas prices probably will remain volatile.
Natural gas prices have been dropping lately, the result of mild winter weather across the country and a decrease in demand caused by households and businesses conserving due to high prices.
Natural gas prices tend to move with global oil prices. Globally, those prices are near all-time highs because of growing demand and fear of supply interruptions in Iran, Nigeria and other major oil-producing countries, Questar Gas president Alan Allred said in a statement announcing the proposed rate cut.
But Stephen Bloch, of the Southern Utah Wilderness Alliance, said Questar needs to come clean on the reason behind high natural gas prices.
Questar recently sent a letter to every customer in their bills blaming the high prices on "misguided environmental opposition" that it contended resulted in large amounts of natural gas being placed off-limits to development, Bloch said.
"The fact that they can turn around and ask for a $97.3 million decrease suggests that explanation for high prices is a red herring," Bloch said. He added that, according to the U.S. Department of Interior, the overwhelming majority of recoverable natural gas resources on public lands in the Intermountain West are open for leasing and development.
"They obviously disagree with us, but that's not surprising," Questar's Burnett said. "There is just no question that this country's environment policies are restricting energy development."
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Information from: The Salt Lake Tribune, http://www.sltrib.com
(Copyright 2006 by The Associated Press. All Rights Reserved.)
