Natural gas should flow to three more Utah communities this winter as Questar Gas Co. continues to expand its service area.
The Utah Public Service Commission last week approved Questar's plans to extend gas service to Joseph and Sevier, both in the Richfield area, and to Oak City, near Delta.Darren Shepherd, Questar spokesman, said all three communities have asked for gas service in the past, but it was not economically feasible to extend lines there until now.
"Oak City has been asking ever since we went down to southern Utah in 1992," Shepherd said Thursday. "Now we've got 240 residents along there that make it worthwhile."
According to information from the PSC, it will cost about $707,000 to build the natural gas transmission and distribution facilities for Oak City, which is about 12 miles east of Delta. The project will require an up-front payment of $507,000.
Barrie McKay, Questar's director of state regulation, said about 196 of the city's 240 residents signed up for the service in advance and agreed to pay a $20 per month "extended area charge," in addition to their regular bills, for 15 years to pay off the initial expense.
Questar actually should have requested a $30 EAC for Oak City, McKay said. But since it signed people up with the understanding that the EAC would be $20, the company will make up the $10 difference.
"Instead of coming back and being the bad guy, we came in and said we'd make up the difference here," McKay said.
The company will adjust its revenues so other Questar customers do not end up paying for the mistake, according to the PSC order.
Shepherd said Questar will extend its line from Elsinore to the southwest to serve Joseph and Sevier, which have about 145 customers between them.
"They're close enough together that it just made sense to include both communities," he said.
McKay said 85 percent of the people there signed up for the service.
"It was probably one of the highest sign-ups we've ever had when we've gone through initially," he said. "Most of these communities have wanted gas for years."
The PSC order said the Joseph and Sevier project will cost about $364,000, with an up-front payment of $238,000. Again, customers in the two towns will pay a $20 EAC for 15 years to recoup that amount.
McKay said both projects are part of Questar's ongoing expansion efforts.
"We're trying to do as many as we can in an orderly manner," he said. "How many are realistic, even with the EAC, has yet to be determined. But we are working with other communities now. . . . We plan to try to continue to do that as we go forward."
Pipe is ordered for the two latest projects, and the towns should have gas by October, McKay said. Questar also is building a pipeline to Panguitch this year.