Heating bills rise in time for fall
 
Sep 9, 2005 - The Salt Lake Tribune
Author(s): Steven Oberbeck

Sep. 9--Questar Gas customers will pay a lot more to heat their homes this coming winter -- about 28 percent more than last year.

 

The company, though, isn't to blame. Higher natural gas prices beyond Questar's control are causing the increase.

 

Questar Gas asked the Utah Public Service Commission (PSC) on Thursday for permission to raise the cost of the natural gas it provides to customers by 13.3 percent. On top of a 14.4 percent increase approved by the PSC in June, that means Utahns this winter will pay about 28 percent more per month than last year.

 

"There is a silver lining," Questar spokesman Chad Jones said. "The cost of the natural gas our customers use is a lot less than almost everywhere else."

 

Natural gas users in Lincoln, Neb., for example, pay 17 percent more than Utahns for their natural gas service. Consumers in Green Bay, Wis., pay 42 percent more, while those in Boston must pony up 80 percent more to heat their homes, according to the American Gas Association.

 

This disparity is the result of Questar Gas only buying about half of its gas supplies on the open market, where prices can fluctuate wildly. The rest of Questar's gas comes from company- owned wells. That gas is provided to customers at the cost of production. And it is that low-price gas that helps keep costs lower in Utah than everywhere.

 

Questar supplies natural gas to customers at cost. But that means when prices go up, the company must seek permission to increase what it charges. When it goes down, the company will request a decrease. The company typically asks to adjust the cost of the natural gas piped to its customers twice a year -- in May and September.

 

So far, this year is no exception. However, recent rapid market price increases due to the destruction caused by Hurricane Katrina - - costs that are not expected to show up on Utahns' bills until next spring -- will force the company to keep a close eye on changing market conditions in coming months, Jones said.

 

The price Utahns pay for their natural gas may be lower than elsewhere, but the overall 28 percent increase from last year is still hefty and more than most consumers in the state are used to, said Leslie Reberg, director of the Committee of Consumer Services.

 

In June, after the PSC gave Questar permission for the first price increase, the consumer committee launched an investigation to make sure it was justified by market conditions. That probe is continuing, Reberg said.

 

"We've brought in a consultant and our contract with him is open ended, so he'll be able to include this latest rate hike in our investigation as well," Reberg said.

 

 


© Copyright 2005 NetContent, Inc. Duplication and distribution restricted.
 

Visit http://www.powermarketers.com/index.shtml for excellent coverage on your energy news front.