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June 3, 2008
Utah NGV owners are the envy of the country when it comes to our low CNG prices. But the current refueling infrastructure is simply not designed to handle the load we are already placing upon it, let alone what we are soon facing as more and more vehicles come into the state or are being converted to run on natural gas. I know folks in Cedar City who are getting up at 5am just to get reasonable pressure at the overwhelmed lone station there. Oklahoma is facing a similar situation with their gas utility too.
The harsh reality is that Questar (parent company) makes a profitable (approx. 40% margin?) business by punching holes in the ground and selling the gas to various markets. Its subsidiary Questar Gas is a regulated utility which provides a marginally profitable but essential gas service to homes, business, oh and yes to its little-thorn-in-the-side NGV refueling group too.
It is no wonder the parent company took no interest in the NGV business... that is, until the Sandy station mishap. Suddenly the sleeping giant has awoken to our little corner of its trade and it is my understanding they are taking a very hard look at what ought to be done to either shore it up or get it sold (hence the rumors flying around this web site over the past few days).
I would like to use this discussion thread as an opportunity for you, the NGV owners to chime in with some realistic suggestions as to what Questar ought to do to better service this growing customer segment of theirs. Posts that simply whine and complain or have snide remarks will be deleted. We need some real answers to a real problem here.
Allow me to start with a few suggestions based on my own observations:
1. Don't sell-off, invest in the future. Questar has had its share of PR snafus (most recently the widely-publicized billing problem). Selling off the stations lock, stock and barrel to anyone else would place the new owner overnight into an unregulated monopoly position, creating significantly higher prices at the pump. The backlash among NGV owners would be deafening. I'm sure everyone would agree that we are all OK with higher prices if it meant plowing some of it back into the crumbling infrastructure.
2. Get the Public Service Commission onboard with an NGV station growth and reinvestment plan. Work with us, the NGV owners to come up with a plan to present to the PSC. We will fill the hearings with supportive voices.
For starters, there is no reason why the PSC should not be supportive of Questar using the 50 cent/gge federal excise credit toward additional compressors and storage at the current facilities. That was the intent of Congress when it was put into place. I would gladly pay $1.13 if there was a plan to plow this into better infrastructure for everyone. My understanding is last year Questar dispensed 2,000,000 gge's so that would have been a million dollars in new equpiment if it had been re-invested last year. Think of the capacity we would be enjoying now! The PSC should also support what has been done in California and other states in tacking-on a $3 fee to all vehicle license renewals to pay for alternative fuel infrastructure.
3. The old business model of scratching around for Clean Cities grant money for building out stations is ancient history. These alt fuel infrastructure grants are by and large now going toward ethanol. Brigham City was the end of the line for this gravy train. Time to try something new.
4. Use your own rate tariff for these stations. Leveling the playing field for others to build public stations is a must. The published rate of $7.9543 / Dth is very reasonable. It works out to around a dollar per gasoline gallon equivalent before adding federal road tax & obtaining the federal excise credit. The net effect is 68.2 cents before the cost of compressing. Since our prices are 63.8 cents
(and 7 cents of that goes to the station owner) it would seem to the public that the NGV business unit is either operating at a loss, or at a minimum not taking into account the cost of the natural gas used by the compressors nor allocating anything whatsoever toward maintenance and new station build-out.
5. Encourage home refueling. Follow SoCal Gas' lead in providing an attractive tariff and rebates for those of us with home refueling devices. Your ThermWise program could also easily be augmented to include some money for these installations. It is odd that we pay more to refuel at home than at your overwhelmed stations. Nowhere in the country do you find this situation except in Utah and Wyoming (possibly Oklahoma too).
Thank you all in advance for your productive comments.
- JM
Utah NGV owners are the envy of the country when it comes to our low CNG prices. But the current refueling infrastructure is simply not designed to handle the load we are already placing upon it, let alone what we are soon facing as more and more vehicles come into the state or are being converted to run on natural gas. I know folks in Cedar City who are getting up at 5am just to get reasonable pressure at the overwhelmed lone station there. Oklahoma is facing a similar situation with their gas utility too.
The harsh reality is that Questar (parent company) makes a profitable (approx. 40% margin?) business by punching holes in the ground and selling the gas to various markets. Its subsidiary Questar Gas is a regulated utility which provides a marginally profitable but essential gas service to homes, business, oh and yes to its little-thorn-in-the-side NGV refueling group too.
It is no wonder the parent company took no interest in the NGV business... that is, until the Sandy station mishap. Suddenly the sleeping giant has awoken to our little corner of its trade and it is my understanding they are taking a very hard look at what ought to be done to either shore it up or get it sold (hence the rumors flying around this web site over the past few days).
I would like to use this discussion thread as an opportunity for you, the NGV owners to chime in with some realistic suggestions as to what Questar ought to do to better service this growing customer segment of theirs. Posts that simply whine and complain or have snide remarks will be deleted. We need some real answers to a real problem here.
Allow me to start with a few suggestions based on my own observations:
1. Don't sell-off, invest in the future. Questar has had its share of PR snafus (most recently the widely-publicized billing problem). Selling off the stations lock, stock and barrel to anyone else would place the new owner overnight into an unregulated monopoly position, creating significantly higher prices at the pump. The backlash among NGV owners would be deafening. I'm sure everyone would agree that we are all OK with higher prices if it meant plowing some of it back into the crumbling infrastructure.
2. Get the Public Service Commission onboard with an NGV station growth and reinvestment plan. Work with us, the NGV owners to come up with a plan to present to the PSC. We will fill the hearings with supportive voices.
For starters, there is no reason why the PSC should not be supportive of Questar using the 50 cent/gge federal excise credit toward additional compressors and storage at the current facilities. That was the intent of Congress when it was put into place. I would gladly pay $1.13 if there was a plan to plow this into better infrastructure for everyone. My understanding is last year Questar dispensed 2,000,000 gge's so that would have been a million dollars in new equpiment if it had been re-invested last year. Think of the capacity we would be enjoying now! The PSC should also support what has been done in California and other states in tacking-on a $3 fee to all vehicle license renewals to pay for alternative fuel infrastructure.3. The old business model of scratching around for Clean Cities grant money for building out stations is ancient history. These alt fuel infrastructure grants are by and large now going toward ethanol. Brigham City was the end of the line for this gravy train. Time to try something new.
4. Use your own rate tariff for these stations. Leveling the playing field for others to build public stations is a must. The published rate of $7.9543 / Dth is very reasonable. It works out to around a dollar per gasoline gallon equivalent before adding federal road tax & obtaining the federal excise credit. The net effect is 68.2 cents before the cost of compressing. Since our prices are 63.8 cents
(and 7 cents of that goes to the station owner) it would seem to the public that the NGV business unit is either operating at a loss, or at a minimum not taking into account the cost of the natural gas used by the compressors nor allocating anything whatsoever toward maintenance and new station build-out. 5. Encourage home refueling. Follow SoCal Gas' lead in providing an attractive tariff and rebates for those of us with home refueling devices. Your ThermWise program could also easily be augmented to include some money for these installations. It is odd that we pay more to refuel at home than at your overwhelmed stations. Nowhere in the country do you find this situation except in Utah and Wyoming (possibly Oklahoma too).
Thank you all in advance for your productive comments.
- JM
We can (sincerely!) compliment him on the great job Questar is doing with responsible exploration for this wonderful domestic vehicle fuel.
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