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Questar’s 11% rate cut approved

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Questar Gas Co. customers received a late Christmas present in the form of an 11.21 percent rate cut.

The Utah Public Service Commission on Monday gave interim approval to the natural gas company's proposed $66.95 million decrease in Utah rates. The decrease, effective Tuesday, will cut the typical homeowner's bill by $86 per year, to $681.02.

The company has about 730,000 Utah customers.

Questar filed for the rate cut on Dec. 14, due largely to the substantially reduced cost of natural gas purchased by the company, the PSC order said.

Questar can file twice annually for gas-cost, or "pass-through," adjustments, although sometimes it files "out of period" if those costs drop or rise significantly.

The company buys about half the gas, at no markup, that it sends along to customers. The rest comes from company-owned wells and is delivered at cost-of-service pricing — usually less expensive and more stable than outside buys.

In its order, the PSC said that the state Division of Public Utilities and Committee of Consumer Services have recommended that certain costs be excluded from Questar's rate proposal because inclusion of those costs is not "sufficiently supported" by the company's information.

However, the order said, both agencies recommended that the rate cut be implemented on an interim basis. The PSC order said the interim rate cut may be modified in the future based on resolution of the issues brought up by the division and committee.

In October 2000, Questar received a $63 million gas-cost increase, which was followed up in January with a $167 million rise. That left the typical homeowner paying $905.02 annually.

A decrease of $600,000 in July and a $111 million drop in October left the typical homeowner paying $767.02 per year.