New “Hidden Tax” on Utah Questar Consumers Gas Bill
Summary: SB 275 was touted as a clean air bill but it is actually a hidden tax on all of us, it will do little to nothing to reduce air pollution and it benefits a select few while hurting those living on limited incomes.
CITIZEN GROUPS CALL ON GOVERNOR HERBERT TO VETO S.B. 275, ENERGY
FOR: Immediate Release CONTACT:
Claire Geddes (801) 943-3654
Betsy Wolf, Salt Lake Community Action Program (801) 891-5040
Tim Funk, Crossroads Urban Center (801) 364-7765
DATE: March 22, 2013
Crossroads Urban Center, Salt Lake Community Action Program, the Coalition for Religious Communities, and Claire Geddes, Consumer Advocate, have joined together to urge Governor Herbert to veto S.B. 275,Energy Amendments (Sen. J.S. Adams)that was passed on the last day of the 2013 legislative session.
S.B. 275 was touted as a bill that will go far in cleaning up Utah’s bad air. However, not only will it not clean up the air, it has a number of potentially disastrous consequences for Utah and particularly ratepayers of Questar Gas Company.
The groups’ primary concern is that S.B. 275 would significantly change the utility rate making process by requiring the captive customers of a monopoly utility company to pay for costs unassociated with their essential utility services. In this case, it imposes a “hidden tax” onto the bills of Questar Gas customers. This is a door that, once open, can and will be used and abused in the future. And once that door opens, it jeopardizes Utah’s low energy rates which could have a detrimental effect on Utah’s economic development.
S.B. 275 starts with Questar’s customers’ paying, through their natural gas utility bills, for up to $5 M investment in natural gas vehicle (NGV) infrastructure *each year* (which maintains the very highest level of rate impact seen to date, compounds that rate impact year after year, and mandates that it be embedded – hidden – in base rates.) Betsy Wolf of Salt Lake Community Action Program said: “If that weren’t bad enough, it lifts the $5 million cap after the first year for four more years, providing a blank check for future natural gas rate increases.”
S.B. 275 also initiates a process at the Public Service Commission to look at funding mechanisms for vehicle conversion and maintenance of vehicles as well as additional infrastructure. Thus, S.B. 275 turns the utility into a tax collector and requires captive ratepayers throughout the state to pay, through their natural gas utility bills, to clean up the air on the Wasatch Front.
Questar Gas has had a subsidized rate for natural gas vehicles (NGV) for over 20 years to help promote an emerging industry. However, this has been such a small portion of Questar’s business that the ratepayer impact was minimal. As natural gas vehicle adoption has increased, the regulators and interested parties have worked to bring that rate to a level that the revenues from natural gas vehicles will equal the costs to serve those customers.
To clean up the air and transform the natural gas vehicle market, Utah needs to have a robust natural gas fuel market. However a robust market is not possible if other providers have to compete against a below-cost utility provider. So the result, intended or not, would be to allow Questar Gas to expand its facilities and its’ near monopolistic grip on cleaner fuels, prohibiting the growth of a competitive market in a state that theoretically values a “free market economy”.
“Cleaning up the air is certainly something that we all support but we do not support this method of funding it. This is a regressive tax, which raises rates for all customers and has a disproportionate impact on seniors and low income households that are already struggling to keep the heat on in this difficult economy” asserted Tim Funk of Crossroads Urban Center. “We urge the Governor to veto S.B. 275.”
Today, these groups delivered a letter to Governor Herbert asking him to do just that.
# # # # #