Questar, customers in tiff over bills
There are no comments for this page [ Add Comment ]Wednesday, February 28, 2007
By Ralph Wakley
Standard-Examiner correspondent
Utah high court hears arguments over plant's costs
SALT LAKE CITY -- Questar Gas Co. went before the Utah Supreme Court on Monday, trying once again to argue that its natural gas customers and not company shareholders should pay $4 million a year to run the company's plant, which cleans gas extracted from coal deposits.
"Ratepayers should pay none of the costs of building or running the plant," said Janet Jenson, attorney for utility watchdogs Roger Ball and Claire Geddes and for more than 50 other Questar customers or stockholders who are suing the company. "They're bound by the previous decision," Jenson said, in which the justices in 2004 determined Questar built the plant without ever determining it was prudent.
Questar attorney Scott Brown told the justices the utility "put on a bad case" in its first effort to recover both the costs of the $27 million plant near Price and money to run the plant.
Following the 2004 decision finding the Utah Public Service Commission had failed to consider all evidence in granting a rate increase, the PSC ordered Questar to refund the $25 million it had already collected, plus $4 million in interest on that money. Questar executives and the PSC staff, joined by the state Public Utilities Division and the Utah Committee of Consumer Services, met privately during 2005 and came up with a new rate increase that charges gas customers $4 million a year beginning a year ago and running through at least 2008. However, the charge could be continued beyond 2008 if the PSC approves.
The court's standard is called res judicata, Jenson said, which means judicial decisions must become final, that people are not allowed to keep relitigating issues that involve the same facts. As in the 2004 cast she said, Questar and the PSC failed to follow the law that requires that customer interests are primary, that decisions be just and reasonable.
About 15 years ago, Questar became interested in recovering methane gas from Utah's coal fields. But the gas also contains carbon dioxide gas. The CO2 gas would reduce the heat output of natural gas if burned along with methane in home appliances, so Questar decided to have an unregulated affiliate, Questar Transportation Co., build the plant. Questar Transportation profits can be shared with Questar Gas shareholders but don't help gas customers by holding down rates.
During the most recent rate-making process, Jenson said Questar, its affiliates and state regulators routinely met privately and produced no record of those meetings. The public was not invited, she said.
Regardless of the process, Brown told the justices building the gas plant has benefited customers, that adding coal-seam methane gas to the region's natural gas supplies is helping put a brake on rising gas prices. The savings, he said, is at least $13 million yearly in gas costs, after CO2 processing costs are deducted.
Jenson called that argument "a disguise. That's not relevant. That kind of argument only encourages utilities not to do prudent planning; that it all turned out well in the end. Ratepayers should not pay for this plant or its operation."
The justices took the arguments under advisement. In utility cases, they have typically taken several months to rule.
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