Oct. 8--OGDEN -- As colder weather moves into the Wasatch Front, the utility that heats the vast majority of homes in the area says it isn't planning to raise natural gas rates this winter.

Customers who rely on Questar Gas to heat their homes can expect their natural gas rates to remain well b e l o w l a s t winter's levels, said Ron Jibson, chief executive of Questar Gas.

"We're going to be able to keep rates very low this winter, all winter," Jibson told the Standard-Examiner.

That's because natural gas production has held even while demand has fallen during the recession, meaning gas storage levels are ahead of normal for this time of year. That has driven market prices down, which Jibson said translates into lower rates for end users.

Production has remained steady even with decreased demand because improved technology has made natural gas extraction more productive and efficient, he said.

"We're getting more wells from one rig, and more gas from one well," he said. "We're serving twice as many customers today with one-third fewer people." He said Questar's residential rates are 26 percent below what they were a year ago, mainly because of a 16.5 percent reduction in March, and he expects rates to stay in that range through the winter.

But while the company isn't likely to raise rates because of market prices until at least next year, it may ask the Utah Public Service Commission for an increase to cover the cost of gas lines that need replacement "sometime in the next couple of months," Jibson said.

"Rates based on the commodity price won't increase this winter, but other factors may come into play," he said.

PSC spokeswoman Julie Orchard said Questar notified the commission Wednesday that it may file a request related to the gas-line costs sometime after Nov. 5. She also said the commission expects Questar to file for a slight decrease in rates sometime this month because of falling market prices for natural gas, so those requests may offset each other.

Questar Gas is the distribution, or utility, subsidiary of Salt Lake City-based Questar Corp., which also has business interests in natural gas exploration, production and transmission.

Jibson said the company's location in the natural gasrich Rocky Mountain region, along with the fact that it produces much of its own gas supplies, is why its rates are regularly the lowest in the continental United States.

Utahns pay about $10 for every 1,000 cubic feet of natural gas used, according to the U.S. Energy Information Administration. That's less than what residents of any other state except Alaska pay for natural gas.

At the other end, the same amount of gas costs about $22 in Florida and Georgia.

In a forecast this week, the EIA said the average U.S. household will pay $105 less for natural gas heat this winter compared with last winter.

Utah depends on natural gas more than most states. Almost 92 percent of Ogdenarea homes rely on natural gas for heat -- more than any other metropolitan area in the nation, according to the U.S. Census Bureau.

While it has remained profitable throughout the recession, Questar Corp. hasn't been immune to economic downturn. The company is valued at $8.7 billion today, down from about $13 billion a year ago.

Still, as long as supply remains high and demand relatively low, Jibson said, Questar Gas customers are likely to continue paying lower rates. "This is good news for our customers, especially in these difficult times."

-----

To see more of the Standard-Examiner, or to subscribe to the newspaper, go to http://www.standard.net.

Copyright (c) 2009, Standard-Examiner, Ogden, Utah

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, 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.

NYSE:STR,

A service of YellowBrix, Inc.