Questar Gas Requests Rate Increase

SALT LAKE CITY — Questar Gas today asked the Utah Public Service Commission (PSC) to approve a $63 million increase in its Utah natural gas rates which would result in a 12.7 percent increase for the typical residential Utah customer. This change is requested to go into effect Oct. 1, 2000.

The request is based on recent significant increases in natural gas prices at the wellhead and is part of Questar's gas-cost-adjustment or "pass-through" filing. Such filings enable the company to adjust rates at least twice each year to reflect changes in gas-supply costs. These costs are passed on to the customer on a dollar-for-dollar basis with no markup.

"Natural gas prices are increasing nationwide in response to higher demand," said Nick Rose, Questar Gas president and CEO. "Natural gas is in great demand not only for traditional uses such as home heating but also to fuel new electricity generation."

Added Rose, "Even with the higher prices, Questar Gas has sufficient gas supplies to meet peak demand, and we foresee no problems meeting our firm customers' requirements this winter. Current prices have prompted increased drilling and production, which should lead to more supply and eventual price moderation."

Much of the nation has seen retail gas-cost increases ranging from 30 to 50 percent. However, Questar Gas is recommending a much smaller increase than companies in other areas. This is possible because nearly half of the natural gas Questar Gas provides to customers comes from Questar Gas-owned wells and is delivered at "cost-of-service" pricing, which is considerably lower and more stable than for gas purchased from outside suppliers. It's this combination of market and company-owned supplies that has helped stabilize gas costs for Questar Gas's customers.

If the request is approved by the PSC, it will increase the typical residential bill on average by about $6.62 per month. The exact increase will depend on weather, home size, number of natural gas appliances and other factors that affect actual volume used.

In 1985, the annual natural gas bill for the typical Utah residential customer represented 1.7 percent of personal income per household. If the increase is approved, the typical annual bill will represent only 1 percent of current personal income per household.

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