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Show Mt. Fuel customers to get refund The Committee of Consumer Services filed testimony Feb. 7 with the Utah Public Service Commission Commis-sion requesting refunds of $61 million and $33 million in overcharges over-charges to gas customers by Mountain Moun-tain Fuel Supply Company during 1991 and the projected first half of 1992. The two refunds total $135 for the typical residential customer: $90 for 1991 and $45 for the first half of 1 992. The overcharges relate to excess natural gas costs paid by "In 1989, Questar Pipeline filed with the FERC to recover $3.3 million of contract reformation costs. The FERC allowed Questar to recover only $1.7 of the $3.3 million request. Since that time, Questar Pipeline has not gone back to the FERC for the recovery of contract reformation costs. Instead, it has purchased the high cost gas and passed the costs along to its affiliate, af-filiate, Mountain Fuel, who, in turn, passed the costs on to its retail ratepayers, added Hogan. "The committee is proposing to stop this practice by limiting Mountain Moun-tain Fuel to the recovery of revenues consistent with a least cost gas procurement standard, a standard stan-dard which would not recognize the higher cost of gas purchases incurred in-curred to accommodate corporate affiliate needs." The Committee of Consumer Services is the Utah state agency charged with representing consumers con-sumers in utility matters before the PSC. Mountain Fuel to its corporate affiliate, af-filiate, Questar Pipeline. "Aside from its own gas supplies, sup-plies, Mountain Fuel bought all of its natural gas in 1991 from Questar Pipeline," stated Lee Hogan, chairman of the Committee of Consumer Con-sumer Services. "Other, cheaper sources of natural gas were available to Mountain Fuel. Had Mountain Fuel purchased the lower cost gas during 1991, it would have charged Utah ratepayers $61 million less than it actually charged.' charg-ed.' For 1991, the Committee of Consumer Con-sumer Services is recommending that the Public Service Commission order Mountain Fuel to refund $61 million of unnecessary purchased gas costs that Mountain Fuel paid to its affiliate, Questar Pipeline. In its most recent general rate case, Mountain Fuel was ordered by the PSC to obtain natural gas supplies sup-plies at the lowest prices and without regard to corporate structure struc-ture or the needs of its corporate parent or affiliates. In testimony filed fil-ed by the Committee of Consumer Services, the committee's expert, Richard Galligan, said that, based on his investigation, "During the periods under review, Mountain Fuel's gas acquisitions were not consistent with the least cost (gas procurement) standard." Lee Hogan explained: "Questar Pipeline has contractual obligations to buy substantial amounts of natural gas at prices that are above todays market price. Questar Pipeline buys this high cost natural gas and sells it to its affiliate, Moun tain Fuel who, in turn, passes its high cost on to its retail ratepayers. "This arrangement helps Questar Pipeline avoid take-or-pay cost penalties it would otherwise incur on its high cost contracts. The committee believes that Mountain Fuel's purchase of high cost gas supplies from its affiliate, Questar Pipeline, violates Mountain Fuel's obligation to its ratepayers to obtain natural gas supplies at the lowest price available and to plan its purchases pur-chases without regard to affiliate needs," stated Hogan. The Public Service Commission is presently reviewing Mountain Fuel's purchased gas costs during 1991 and the first six months of 1992. In addition to requesting a refund re-fund of $61 million for gas overcharges over-charges in 1991, the Committee of Consumer Services wants ratepayers to be spared $33 million of excess gas costs that Mountain Fuel is requesting for the January-June January-June 1992 period The PSC will receive further testimony and hold hearings in April. If the PSC agrees with the committee, ratepayers would receive refunds totaling $135, $45 for 1992 and $90 for 1991. In addition, addi-tion, future gas cost rates would be reduced by 54 cents a decatherm to prevent future gas cost overcharges. The committee explained that the Federal Energy Regulatory Commission Com-mission (FERC), which regulates Questar Pipeline, has procedures to deal with costs that interstate pipeline like Questar may incur to reform their high cost gas purchase contracts. |