The Public Service Commission has approved an agreement that allows Questar Gas Co. to acquire Utah Gas Service Co., which has 9,400 customers in Moab, Monticello and Vernal.
The commission's order Tuesday confirms a tentative approval granted last week.
The commission approved a rate structure for Utah Gas Service customers that will be used until either Questar's non-gas rates are adjusted in a general rate case or six years from the purchase closing, whichever is earlier. At that time, Utah Gas Service customers will be incorporated into Questar's existing rate structure.
The rates were part of a stipulation between Questar, Utah Gas Service, the Division of Public Utilities and the Intermountain Gas Agency.
As part of the agreement, Questar will buy operations of Utah Gas Service and its sister company, Wyoming Industrial Gas, by acquiring all the outstanding shares of common stock of both companies in a stock-for-stock exchange of 390,000 shares of Questar Corp. stock. That is expected to total about $11 million.
The parties agreed that in general the acquisition was in the public interest. In the near term, Utah Gas Service customers are expected to benefit from Questar Gas' company-owned gas supplies, which cost less than the market gas Utah Gas Service relied on entirely. Utah Gas Service customers also are expected to benefit from improved economies of scale.