Gas rates 2nd lowest in U.S.
Utah's prices below all but Alaska's, report says
The report, updated this week, indicates that 2005 residential natural gas rates in Utah averaged $9.71 per thousand cubic feet. Alaska had the lowest average rate at $5.73 per mcf. Hawaii had the highest rate at $30.94 per mcf.
While Utah's natural gas prices increased 20 percent compared to 2004's average rate of $8.12 per mcf — when it also was second-lowest in the country — Utah prices remained significantly lower than its neighbors'. Arizona's average rate in 2005 was $13.54 per mcf. Coloradans paid $10.24 on average and in Idaho the rate was $10.58 per mcf.
The average U.S. residential natural gas rate in 2005 was $12.81. Delaware's rate was not included in the report.
Nearly all Utahns receive their natural gas from Salt Lake-based Questar Gas Co., which has roughly 820,000 Utah customers who use the fuel to heat their water and homes. Two Utah cities, Eagle Mountain and Nephi, have their own municipal natural gas companies.
The EIA report tracks the total dollars spent by consumers from all utilities in each state, using a weighted average.
Utah's cheaper natural gas prices can be attributed to Questar's Wexpro wells, mostly located in southwest Wyoming. Without those supplies, Questar customers would be paying far more for their natural gas, company officials have said.
The cost of Wexpro gas is roughly half of what natural gas sells for on the commodity market. About half of Utah's natural gas comes from Wexpro. The remaining half is purchased.
Dan Gimble, chief of technical staff for the Utah Committee of Consumer Services, said the committee was instrumental in striking the 1981 Wexpro agreement, ensuring that Utahns would benefit from the wells.
"It ensured that the gas would be priced at cost-of-service versus market gas," Gimble said. "Most other utilities don't have company-owned gas supplies like Questar does."
According to the EIA report, residential natural gas prices this winter in Mountain states, which includes Utah, will average $11.54 to $11.88.
Utah's second-place ranking came in spite of Questar Gas raising rates 38 percent in 2005. This year, Questar Gas has cut rates three times, amounting to about a 13 percent reduction in a typical customer's annual bill.
Utah also ranks low in electricity costs. A separate report by EIA earlier this year ranked Utah No. 12 nationally in having the lowest residential electricity rates.
E-mail: danderton@desnews.com
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