Questar Gas Asks for Rate Decrease

Last week, Questar Gas -- the retail gas distribution subsidiary of Questar Corporation (STR - Analyst Report) -- asked the Public Service Commission of Utah to allow it to reduce natural gas rates by a total $6.7 million (or about one-half of one percent). If approved by the state's top utility regulator, the rate cut will lower the typical Utahn’s annual bill by about $3.50 starting Oct. 1.

The latest proposal by Questar Gas (the utility that provides most Utahns with natural gas) follows earlier reductions of 6% in November 2008 and 16% in May 2009, thereby considerably easing the fuel burden on the state’s population this winter. Management cited lower natural gas costs as the reason for seeking the rate decrease. 

Questar Gas is making the request as part of its ‘pass-through’ rate case that allows the utility to adjust rates to reflect changes in gas costs. Incidentally, Questar Gas doesn't make money from the natural gas it supplies its customers at cost, but generates profits by charging Utahns to maintain the infrastructure and distribute the fuel to their homes and businesses.

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