Questar Seeks $11 Per Month Household Rate Hike

Questar Seeks $11 Per Month Household Rate Hike

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SALT LAKE CITY (AP) -- Questar Gas is seeking a rate hike that would cost the typical household about $11 more per month.

The rate hike is to offset the higher cost of the natural gas it buys from producers.

The utility is seeking Utah Public Service Commission approval to increase its rates by $115 million.

The 14.4 percent increase, which could become effective June 1, would be Questar's third-largest percentage increase in two decades.

"Passthrough" rate adjustments for the changing prices paid by Questar buys typically are approved with little debate.

"It is usually pretty easy for the company to establish to everyone's satisfaction what it pays for the natural gas it supplies to its customers," said Dee Jay Hammon, chairman of the Utah Committee of Consumer Services, which represents the interests of residents, small businesses and farmers in rate cases.

Questar's latest passthrough rate case follows a 28.6 percent increase in early 2001 and a 24.6 percent hike in Oct. 2003.

Questar purchases about 58 percent of its natural gas on the volatile commodity markets, and the remaining 42 percent comes from utility-owned natural gas wells.

Dan Gimble, chief of technical staff for the Utah Committee of Consumer Services, said the agency will be looking at whether there is a way for Questar to get longer-term contracts.

"Typically, their market gas supplies have been pretty short term. The other option would be to see if they could acquire additional gas properties," he said.

As of December, Salt Lake City ranked third lowest among 22 U.S. metropolitan areas in monthly natural gas charges, according to the American Gas Association.

Questar said the lower prices are due to supplies from Wexpro natural gas wells. Wexpro, a subsidiary of Questar Corp., develops gas reserves owned by Questar Gas Co.

Without those supplies, customers would be facing a 35 percent instead of a 14.4 percent rate increase, the company said.

The cost of Wexpro gas is roughly half of what natural gas sells for on the commodity market.

Andrew Weissman, founder and chairman of Washington-based Energy Ventures Group LLC, said rising natural gas prices across the nation are due in part to changes in federal law that removed restrictions on the use of natural gas in power generation.

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

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