A recently approved bill will bring natural gas to rural communities
SALT LAKE CITY—“We are growing, with a whole bunch of tourists,” Rep. Mike Noel (R-Kanab) recently told Utah’s House Public Utilities, Energy and Technology Committee. “Every time we try to get a new type of business, the first thing they ask is if we have natural gas. It’s much less expensive. It’s a nicer heat.”
Noel was speaking in support of HB422, a bill to help fund construction of rural natural gas pipelines from small annual increases to existing customers’ utility bills. Utah Gov. Gary Herbert recently signed the bill after the end of the 2018 general session.
Extending gas mains to underserved communities is often not feasible without the help of existing customers to cover costs. Noel said it is in the best interest of Utah to expand gas service to remote areas that currently rely on propane and electricity for heat.
“To run a $30 million line to Green River with 300 customers, economically they would never be able to pay for it,” noted Kelly Mendenhall, Dominion Energy’s director of regulatory affairs. Dominion Energy serves 1 million customers in 280 Utah cities, mostly clustered along the Wasatch Front.
HB422 allows the Public Service Commission to pass such costs to all Dominion Energy customers but limits the amount to 2 percent of the company’s overall revenues in any one year during a rolling three-year period, capping it at 5 percent.
“This is a balance of being able to expand service while being sensitive to the impacts to our general customer base,” Mendenhall said.
The bill was initially opposed by organizations representing the state’s largest industrial customers. The groups withdrew their opposition after the limits were added to the bill.
Rep. Patrice Arent (D-Millcreek) said the bill will have long-ranging benefits, pointing out that the increased availability of natural gas will help address the lack of affordable housing in some of the state’s more isolated communities.
“This is a serious problem in rural Utah,” she said. “We have many people who want to work there but can’t find a place to live. I think [the availability of natural gas] will help with that aspect of development of our rural communities.”