Questar Wants to Cut Rates
By Sam Cooper, Standard-Examiner, Ogden, Utah
Oct. 5–SALT LAKE CITY — The price Utahns pay for natural gas this winter will be lowered again, thanks to a bubble in the regional gas supply, Chad Jones, a spokesman for Questar Gas, said Thursday.
The company filed Thursday for a rate reduction which will reduce the average homeowner’s bill by 9 percent, starting on Nov. 1.
Questar asked the Public Service Utilities Commission of Utah to approve the rate reduction after a 12-month analysis of national supplies. The approval is perfunctory, Jones said.
The rate cut is the sixth in a row and will bring Utah prices back to 2004 levels, a year before hurricanes destroyed 20 percent of U.S. gas production, said Alan Allred, president and CEO of Questar Gas.
“Questar Gas, like other utilities across the country, had to increase its rates to cover the higher cost of buying gas on the wholesale market,” Allred said in a news release. The combined rate cuts have resulted in $262 in annual savings for the typical Utah household, or a reduction of about 29 percent, according to Questar.
Utah currently has the second-lowest gas prices in the nation, according to the U.S. Energy Information Association.
The low prices are due to gas getting stuck in the region, Jones said. “Storage is full across the West, we have lots of gas with nowhere for it to go.”
The gas glut is caused by several factors, Jones said. A new conservation program is encouraging customers to use less gas, he said.
More gas is also being produced in the region, Jones said, because high prices have stimulated higher investment in supply development.
The extra gas is being stored around the region in anticipation of a new gas pipeline under construction between Wyoming and Ohio. The western-most branch of the pipeline is scheduled to be opened on Jan. 1, 2008, Jones said.
After that, “the bubble will start to drain,” he said, though he anticipates it will take some time for prices to start rising again.
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