By Norman Nelson
After receiving permission from the Utah Public Service Commission, the Questar Gas Company will be raising rates for natural gas 25 percent to offset higher gas-supply costs. The rate hike will take effect July 1.
Many BYU students, both on- and off-campus, may see the increase since Questar projects the average household monthly gas bill will go up $14.25.
“The different rate classifications that BYU is charged by Questar make it difficult to specify how much the change will affect BYU,” said Dan Gleason, Director of Capital Needs and Utilities Analysis for BYU. “While it will certainly increase costs for BYU, whether or not those costs will translate into changes in housing costs remains to be seen. The housing department will have to decide that.”
According to the Utah Commission in a press release, “The cost of gas in the Rocky Mountain region has recently increased 54 percent.”
Questar promises their customers some of the lowest gas prices in the nation. The company purports to own approximately one-half of the gas it sells to customers and is permitted only to recover it”s cost of production and distribution.
While the cost of gas purchased on the open market has increased 54 percent, Questar customer rates have increased by less than half that amount.
BYU is a Questar Gas customer, and uses natural gas in heating buildings and water, among other things. On-campus housing units are heated by natural gas, a utility that BYU does not require the tenants to pay.
“Very little natural gas is used in on-campus housing,” said Julie Franklin, director of Residence Life. “Heritage and Helaman Halls don”t use any; Deseret Towers and Wyview use gas only in the laundry. Wymount is the only location on-campus that uses lots of natural gas. Also, our rates are set for this year, so students this year, at least, will not be affected.”
On-campus students are urged to help keep rates low by conserving water and gas usage.
According to the BYU off-campus housing Web site, the majority of off-campus housing complexes require tenants to pay some or all of their own utilities.
“Most complexes off-campus don”t take the risk associated with paying for the student”s utilities,” said Bart Stoddard, manager of Campus Accommodations. “Some of the larger apartment complexes pay the utilities themselves, but then divide the cost among the tenants for each apartment. Thus, if one student racks the bill up by him or herself, the total cost is shared with his or her other roommates.”
Many off-campus housing owners who pay for their tenants” utilities, have not yet decided if there will be a rent increase.
Sara Cameron, joint owner of the Cameron House, was unaware of the rate change scheduled for July 1.
“I didn”t know about that much of a rate change,” said Cameron. “But we”ll have to wait and see how much of a change the rate hike actually makes before we make any decisions to review rent increases. It is definitely something that we will have to keep an eye on.”
“Questar Gas has had relatively stable natural gas-supply costs for the past 18 months,” states Questar”s press release. “In contrast to national trends which, according to the U.S. Energy Information Administration, saw utilities across the nation ask for gas-cost increases of 25-40%. ”Our customers benefit from natural gas rates that are among the lowest in the country,” said Alan Allred, president and CEO of Questar Gas. ”However, they now face higher costs. Natural gas demand is growing nationawide, and supply is not keeping pace.””
Questar stressed that only about two-thirds of a customer”s bill reflects the cost of the gas itself. The other third consists of non-has costs such as system maintenance and other expenses related to delivering gas to customers, said the Questar press release. As a percentage of household budgets, the annual bill for a typical customer in 2003 is still about what it was 15 years ago.
