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Show T i Mountain Fuel is guaranteed a profit. Wrong. Mountain Fuel's regulated utility is authorized to charge rates for natural gas service at certain levels by the CJtah and Wyoming public service commissions. commis-sions. Those levels are based upon what the commission determines after lengthy hearings the utility earnings should be in order to render adequate and reasonable service as well as to successfully attract investor funjis. But there is no guarantee the company will earn the authorized profit level. It must perform well and operate efficiently, like any other business. Mountain Fuel must compete with other investment opportunities, such as money market funds, and compensate investors for the risk involved in providing their money to a utility. Investor capital is critical to help finance the significant capital expenditures the company must make each year to continue providing quality natural gas service. In 1 982, the company for the first time in several years came close to earning what it was authorized, primarily due to higher gas sales caused by colder-than-normal weather. But in 1 981 and over the past decade, earnings were well under the authorized author-ized level and significantly below what our investors could have received through other investments. This was caused by warmer-than-normal temperatures, unexpectedly unex-pectedly high inflation and costly delays in receiving rate relief. Mountain Fuel is a private business not a division of government. Mountain Fuel is a monopoly and has no competition. Right. We sell a product and a service and we must earn a profit in order to stay in business. However, since the public determined many years ago it would be uneconomical and inefficient to have more than one natural gas system in our streets and roads, we are much more heavily regulated than other private businesses with whom we compete for your heating business. Wrong. While we are the only company in our area selling natural gas, we are not the only company selling energy. We have many competitors: coal, electricity, elec-tricity, wood, kerosene, oil, propane, butane and others. Think about it. If those energies were a better value, wouldn't you switch? About 95 percent of the people in our service area use natural gas for hatina. The reason? They know that natural gas is the best energy buy on the market. We are and know we must remain competitive to keep it that way. ' Mountain Fuel can charge whatever it wants for natural gas. Wrong. The Public Service Commission regulates the price our customers are charged for natural gas service. Under Utah and federal law, it must determine what is "just and reasonable" and in the public interest to protect both consumers con-sumers and the financial soundness of the company. A financially sound utility will mean lower rates for its customers. ' The Public Service Commission automatically grants rate increases requested by Mountain Fuel. Wrong. Even before the commission listens to pro-and-con testimony, rate requests re-quests are thoroughly examined by auditors from the Utah State Division of Public Utilities. Then there is a formal hearing process where the commission receives testimony from the Division of Public Utilities, consumer agencies and affected groups. Only then are rates established, reflecting the "just and reason-able" reason-able" standard. These are statements which frequently are made about Mountain Fuel Supply. Our shareholders are anxious for you to have correct information so you can judge whether such statements are right or wrong. That's why they paid for this message. yaL MOUNTAIN FUEL Supply Company |