Page 3 of 4
Legislators saw SB275 as a means to improve Utah’s air. Others saw another UTA subsidy.
By the end of the 2013 legislative session, Sen. Stuart Adams, R-Layton, declared himself content with the progress that Utah’s politicians had made on the clean-air issue. In a March 26 daily update on UtahPolicy.com, he cited three bills passed by legislators. “Some say we did nothing to clean up the air this session. They are wrong. Thanks for paying attention.”
Advocates, though, along with natural-gas utility Questar, did pay attention to one of the three bills, Senate Bill 275, sponsored by Adams. When the bill appeared late in the session, what caught the eye of consumer advocate Claire Geddes was that rather than a clean-air bill, “it was nothing more than [Utah Transit Authority] looking for money.”
But Rep. Greg Hughes, R-Draper, Utah Transit Authority’s chairman, says his passion for compressed natural gas (CNG) came after Questar urged him three years ago to consider converting UTA’s fleet of 350 to 400 buses to CNG.
The bill, Adams wrote in Utah Policy Daily, “creates opportunities for Utah to expand natural-gas infrastructure and increase the use of compressed natural gas.” The most controversial part of the bill was the funding mechanism, which involved a rate hike for all Questar consumers that would provide up to $5 million in the first year and, potentially, unlimited amounts in the next four years to pay for CNG fueling and CNG-fleet maintenance infrastructure, the open-ended provision being repealed in 2018, according to the bill’s final version.
Questar has quietly funded, through adding a legislatively approved few cents to its rates over several decades, an expansion of CNG stations. Utah now has 88, the nation’s highest number of CNG stations per capita. SB275 sought to effectively have ratepayers subsidize “the construction, operation, and maintenance of natural gas fueling stations […] for use by the state, political subdivisions of the state, and the public,” according to the bill.
Hughes says that “some places in the country, the social value [of such projects] outweighs the costs,” but not in Utah. “We are a frugal state. If it doesn’t make money, it doesn’t make sense.” But when Utah endured what Hughes calls “the soupiest inversion” in recent history, and tailpipe emissions were identified by the Governor’s Office as the main culprit, an opportunity emerged, he says, for the Legislature “to take thousands of government fleet vehicles and tackle directly the pollution impacting the valley.”
Crossroads Urban Center’s Tim Funk, however, saw the bill establishing “a way for UTA to have an unlimited and unregulated access to another funding source that allows them to expand their bus fleet to convert existing buses or purchase new ones running on natural gas.”
Hughes says the rate hike, which he put at 8 cents a month, 96 cents a year, was marginal. “The impact [to ratepayers] we’re talking about is decimal dust,” he says. “I could make more money than that with a piece of cardboard at an off-ramp begging.”
Hughes presented an amendment to the House, proposing it remove the $5 million cap. The amendment ultimately failed. Questar’s spokesman Chad Jones says that when the discussion became about taking off the cap, “at that point, we pulled out. We were not interested in having our customers responsible for whatever they come up with.”
UTA has ordered 24 CNG buses, a far cry from what its chairman had envisioned. The first 10 buses will be delivered in June 2013.
“The bill ended up one of the greatest frustrations I’ve experienced in the Legislature,” Hughes says. “The political climate was there to launch a grand plan, and I think we went small.”