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Utah Regulators Urged to Push Market-Based NGV Programs

Aiming for a report to the state legislature by the end of September, the Utah Public Service Commission (PSC) on Wednesday held a hearing to examine how best to expand the use of natural gas and other alternative fuels in the transportation sector. Many energy representatives and alternative fuel advocates urged that market-based approaches be applied.

California-based Clean Energy Fuels Corp., a provider of natural gas transportation fuel and fueling infrastructure, echoed the comments of various organizations and companies "showing concern with [the option of] using utility ratepayer dollars to fund compressed natural gas (CNG) refueling services of Questar."

For its part, Salt Lake City-based Questar's representative said it sided with Utah Gov. Gary Herbert and new state legislation (SB 275), noting that CNG vehicles and fleets are part of the clean-air solution. "Questar believes that its involvement should be limited to its area of expertise: construction and operation of CNG fueling stations for governmental entities and the public," and that the utility's customers should not "bear an unfair portion of the burden of these facilities," according to Questar attorneys, Colleen Larkin Bell and Jenniffer Nelson Clark.

Separately, Texas this week plans to more than double the number of public natural gas vehicle (NGV) fueling stations up to nearly 100, adding up to 69 new stations, 45 of which would be publicly available, according to plans outlined by Lynn Lyon, director of fuel market development at Pioneer Natural Resources, the leader of an industry initiative to encourage more NGV fueling stations throughout the state.

On the same mission, Utah's legislature passed SB 275 seeking to facilitate the "conversion of alternative fuel vehicles and the provision of facilities for alternative fuel vehicles" (see Daily GPIMarch 19).

In pushing for the new state law as part of his "all of the above" type energy strategy in the state, Gov. Herbert said repeatedly that "in the world of energy, we must face new realities, we must confront new challenges, and we must envision and act upon new opportunities."

Michele Beck, director of the Utah Committee on Consumer Services, told the PSC hearing that the best way to ensure sustainability for the NGV industry "is to allow a more robust market to develop." Her comments were echoed in opening statements to the PSC's probe of ways Utah can promote alternative fuel vehicles to reduce smog.

The Committee of Consumer Services is a nine-member layperson board within the Office of Consumer Services. Its purpose is to advise the state consumer unit and to help establish policy objectives for the office. Committee members are appointed by the governor to four-year terms. Utah law requires that Committee members represent certain segments of the population and have relevant professional and technical expertise.

Along with Questar, which already operates about half of the 66 natural gas fueling stations in the state, other organizations providing testimony were the Utah Division of Public Utilities and Blu LNG, a company that competes with Questar in the natural gas fueling market.

Clean Energy called Questar's testimony a "red flag" for regulators, and it labeled as "erroneous" the local utility's claim that it was best suited to construct and operate additional CNG fueling stations in the state.

"Private firms that have years of experience in providing refueling services to multiple markets, like Clean Energy and our several competitors, are the best entities to build CNG stations and offer refueling services to the state of Utah," said Todd Campbell, vice president, public policy and regulatory affairs, in testimony to the PSC.

From other groups, namely the Southwest Energy Efficiency Project (SWEEP) and Utah Clean Energy, the PSC was urged to include electric vehicles (EV) in its report to state lawmakers, given the air quality benefits associated with EVs.

 "EVs are also a viable and convenient way to meet the daily transportation needs of many Utah citizens," the SWEEP testimony said. "Research on driving behavior and patterns shows that EVs are able to meet the vast majority of people's daily driving needs."

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