Court Ruling Upsets Questar Rates

Court Ruling Upsets Questar Rates

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SALT LAKE CITY (AP) -- Questar Corp. can't charge customers for the removal of excess carbon dioxide from an inferior blend of natural gas, the Utah Supreme Court ruled Friday.

In a 5-0 decision, the court reversed the state Public Service Commission's approval of a rate hike that took effect in January 2000. Questar said it costs the typical customer between $4 and $5 a year, although the court in a footnote estimated it at $8 to $9 a year.

The hidden charge is embedded in gas rates and doesn't appear as an itemized figure on bills.

If the decision stands, it could partly offset a 25-percent increase in gas rates obtained by Questar effective July 1.

But Questar is "looking at various alternatives" that could keep the special charge in effect, said R. Curtis Burnett, vice president for public affairs.

"We felt this was a prudent thing to do to protect customer safety. The court decision comes as a surprise and disappointment. We needed to process that gas to assure it would burn efficiently and safely, and those costs were legitimate," Burnett said Friday.

The state's highest court said it was throwing out the special charge that covered 68 percent of the operating costs of a gas processing plant near Price, Utah.

The plant, operated by a Questar affiliate, lowers excessive amounts of carbon dioxide, which has no heat value, from coal-seam gas Questar gets from other producers through interstate pipelines.

Coal-seam gas has a lower BTU content than Questar's own supplies of natural gas produced in Utah and Wyoming and produces more dangerous carbon monoxide after combustion.

For that reason, Questar has been urging customers to get their furnaces and other gas appliances inspected -- at their own cost. Questar says the flame jets may need to be adjusted or replaced, especially on older appliances, to more thoroughly burn the new blend of gas.

The Utah Supreme Court took the Public Service Commission to task for granting "near-automatic" approval for the special charge without forcing Questar to justify its method of dealing with a safety hazard.

The PSC "abdicated its responsibility to find the necessary substantial evidence" supporting the rate hike, Chief Justice Christine M. Durham wrote for the majority.

Durham said the fact Questar Corp. was passing along a cost of one of its own affiliates, Questar Pipeline, raised questions of self-dealing and Questar's burden of proof for a rate hike. But the PSC spent no time evaluating the "prudence" of that arrangement, she said.

The suit was brought against the PSC by its consumer watchdog, Roger S. Ball, who argued Questar too easily got a rate hike. Ball said the court ruling should lower gas rates, but he couldn't predict when and by how much.

(Copyright 2003 by The Associated Press. All Rights Reserved.)

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