Utah House Approves Temporary Measure Letting Gas Utilities Extend Service Into Rural Towns

Representative Hatch, sponsor of House Bill 180, told the House the bill would permit a gas corporation to extend service into previously unserved communities and, if the cost cannot be recovered over the life of the line, to petition the Public Service Commission to include the unrecovered amount in the rate base. "I think the buzzword surrounding this bill is subsidy," Hatch said, framing the proposal as a targeted, temporary option for rural development.

Supporters said the measure would help attract industry and stabilize rural economies. Representative Hayman said expanding service statewide was part of a broader economic-development strategy and urged colleagues to help communities that lack infrastructure. Representative Johnson described a municipal project in Blanding (a 38-mile extension financed with a $5 million bond) as evidence the infrastructure can support local economies.

Opponents cautioned about the cost and long-term consequences. Representative Tanner warned the House that subsidizing extensions might create stranded-cost liabilities under future deregulation, saying it could lead to "millions of bucks" in costs if competition later emerged. Hatch and other supporters countered that the bill contains caps, a narrow scope and an explicit sunset: the bill includes a repealer effective Dec. 31, 1999.

The floor record includes specific fiscal examples discussed in committee: one project was described with an estimated installation cost of about $3,900,000, projected recoveries of roughly $2,700,000–$2,900,000 and a remaining difference of about $1,000,000–$1,200,000 that could require subsidy under the proposed process. Floor sponsors noted the legislature later amended the bill to cap rate impacts (one-fifth of 1% in the final language) and cited an illustrative worst-case annual impact across ratepayers of about $1.41 per customer, with the Panguitch example estimated to be roughly $0.32 annually to other ratepayers once the bill's limits were applied.

Amendments were moved and adopted on the floor to clarify rate protections for customers in extension areas so new customers would not pay less than others on existing tariffs and to limit system-wide impacts. Debate also addressed the bill's limited scope (sponsors said only a few communities—examples named included areas around Bear Lake, Oak City, and Panguitch—were likely to qualify under the bill's criteria) and the 15-year payback period that had been part of the committee discussion.

After summation, Representative Hatch asked for support and the House closed debate and voted. House Bill 180 passed the House 61–10 and was forwarded to the Senate; the bill as passed included the floor amendments, caps on rate impact, and the stated repealer date.

What happens next: The measure will be transmitted to the Utah Senate for consideration. If enacted, affected communities would still need to apply and obtain the certification steps described in the bill before any rate-base action could occur.