Questar doesn't make any money off the natural gas it supplies customers. Still, it must periodically adjust its rates to ensure that it is collecting enough money from its customers to cover the cost of the gas it purchases. The company makes its money by charging to deliver natural gas to homes and businesses over its pipeline network.
Darren Shepherd, a spokesman for the gas company, said the utility bases its natural gas rates on the current market price of natural gas, as well as projections on what it anticipates gas will cost in the future.
"And right now it looks like natural gas prices will be low for some time, unless something unexpected happens," Shepherd said.
The utility, whose gas rates in Utah are among the lowest in the nation, typically asks the PSC twice a year to allow it to adjust what it charges for gas in what are known as "pass through" rate cases.
The request to lower rates by $770,000 filed in late December, though, was a special case brought about by the need to adjust its rates to account for savings achieved from system improvements and conservation programs.
Over the past three years, Questar has requested approval to adjust its rates 10 times. And eight of those pass-through cases involved the company seeking regulatory permission to lower the amount it charges its customers for gas.
Those pass-through rate cases helped lower the average Utah's annual natural gas bill by $115 since 2008.
Questar's request was expected given that the cost to buy natural gas has been going down, said Michele Beck, who oversees the state's Committee of Consumer Services, which serves as the voice for residential and small-business owners in utility rate cases.
She said the request will get a close look, even though Questar is asking to lower its rates.
"It isn't often that we come upon items in a pass-through request that we want to challenge but there is a lot that goes into them, including the company's pipeline costs, gas gathering agreements and storage expenses. You never know when you might find something that needs a closer look," Beck said.
Questar is asking the PSC to allow it to lower its natural gas rates beginning Feb. 1.
Recent Questar natural gas rate adjustments
Requested adjustment effective date Percentage change
+ $195 million July 1, 2008 +22.8%
- $68.8 million Nov. 1, 2008 -5.9%
- $161 million March 1, 2009 -16.5%
- $32.7 million Oct. 1, 2009 -4.0%
+ $48.3 million Aug. 1, 2010 + 5.5%
- $6.6 million Jan. 1, 2011 -0.72%
- $13.3 million June 1, 2011 -1.5%
- $26.1 million Oct. 1, 2011 -2.7%
- $770,000 Feb. 1, 2012* -0.10%
- $13 million Feb. 1, 2012* -1.5%
* Requested effective date
Source: Utah Public Service Commission