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Price of natural gas for autos to soar: Subsidy gone ? PSC says let the market guide the price(Salt Lake Tribune, The Via Acquire Media NewsEdge) Dec. 27--Utahns who drive natural gas powered vehicles will be paying a lot more next summer to fill up with the clean-burning fuel. The state's top utility regulators at the Public Service Commission this week issued an order that requires Questar Gas Co. to increase the price of the natural gas it provides for use in cars and trucks by approximately 80 percent on July 1, 2009. The increase means that a gallon of compressed natural gas that this week was selling for approximately 80 cents will cost $1.43 a gallon six months from now. "Utah NGV (natural gas vehicle) owners will be paying more to fill up, but that doesn't mean that we will be collecting any additional revenue as a result of this order," said Darren Shepherd, a Questar Gas spokesman. For the past 20 years, Utah's utility regulators allowed Questar to sell natural gas for less than it actually cost the company to provide the fuel and maintain it network of refueling stations. All of Questar Gas' customers were required to pick up the difference. The idea was that by allowing the company to charge an artificially low price it would encourage Utahns to use natural gas as vehicle fuel and foster the development of a network of refueling stations throughout the state. Currently, an estimated 6,000 Utahns own NGVs and the Wasatch Front is known for having one of the best natural gas refueling infrastructures in the nation. The PSC, however, now has decided the time is over for Questar's customers to subsidize NGV owners. "All parties generally agree, the price of CNG [compressed natural gas] vehicle fuel should not be subsidized by other utility customers," the PSC wrote, indicating that CNG sales are not a traditional utility service. Michele Beck, the director for the state's Committee of Consumer Services, said the PSC's order that requires Questar Gas to cover all its costs should help expand the number of refueling stations in the state. With Questar charging an artificially low price for natural gas there was no opportunity for anyone to enter the business by setting up their own refueling stations -- they couldn't make any money, Beck said. "Now that they [Questar] have to charge enough to cover their cost of service, there also may be opportunities for competitors." However Salt Lake Community College automotive technology professor Michael Millet, who owns two NGVs, said the rising price of natural gas vehicle fuel may dissuade some Utahns from switching. "That may be the case until people realize there are other benefits to switching to natural gas other than just the cost involved," Millet said, pointing out one big benefit is that CNG is an extremely clean burning fuel. The PSC's order removing the subsidy arose out of a rate case that Questar Gas filed late last year. [email protected] To see more of The Salt Lake Tribune, or to subscribe to the newspaper, go to http://www.sltrib.com. Copyright (c) 2008, The Salt Lake Tribune Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |