City says questions remain after gas firm’s response | AspenTimes.com
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City says questions remain after gas firm’s response

Naomi Havlen

The Aspen city attorney said a gas company’s response to a class-action lawsuit filed earlier this month presents more questions than it does answers.The cities of Aspen and Glenwood Springs are suing Kinder Morgan to protest the amount that residents are being charged for natural gas. The premise of the lawsuit is a law of physics that shows that gas expands at lower atmospheric pressure. Mountain towns have lower atmospheric pressure because at higher elevations.Therefore, the cities argue, there are less heating properties in a certain amount of gas at higher elevations than at sea level. Gas customers at altitude must therefore buy more gas to heat their homes than customers at sea level, the suit claims.The gas company’s main point in its response to the lawsuit is that the matter should be directed at the Colorado Public Utilities Commission rather than taken through the court system.City Attorney John Worcester has said that the utilities commission is well aware of the issue and has never taken action.”Our argument is that they run in tandem – the PUC has a responsibility and the courts have another one,” Worcester said. “What Kinder Morgan says is that they’re exempt from the Consumer Protection Act, because the PUC has rate-making authority. We’re not challenging that.”But the city feels that there are two different issues at hand – the utilities commission may approve the gas company’s rate structures, but the courts have the ability to uphold fair business practices under the Colorado Consumer Protection Act.As for the company’s explanation of its rate structures, Kinder Morgan maintains that it does adjust for altitude by coming up with an average elevation for consumers on the Western Slope and adjusting rates accordingly. In an interview two weeks ago, Kinder Morgan retail President Dan Watson said the average altitude for residential customers on the Western Slope is 5,900 feet.The company’s response to the lawsuit mentions rates being based on an average elevation of Western Slope customers, but doesn’t mention the figure of 5,900 feet. Worcester said this doesn’t explain the billing methods in clear terms.”So how do they calculate that? Is it average altitude and average volume? What if one community only has one customer, and the other has a million – do they take an average of those two?” Worcester asked. “I’d like to know how they calculate that, and secondly, I’d like to see that confirmed in documents.”The documents that the company does present, Worcester said, are considered private by the utilities commission and he hasn’t been able to get these answers himself.Kinder Morgan’s response also refers to the lawsuit as an attempt to defame the company and asserts multiple times that public utility laws do not allow the company to make a profit on the sale of gas.Instead, the company is allowed to make a return on its investment for transporting gas through its own pipelines, the response says. And when it comes to these costs, “It may cost more to construct pipelines and provide service in Aspen than in Glenwood Springs … the costs are pooled and spread across the entire customer base.”Worcester also questions this assertion, saying, “[Kinder Morgan] says it costs more to deliver gas in Aspen – what does elevation have to do with the cost of service?”Although the company has compared its service to that of a bus service where everyone pays the same rate for a service, Worcester said the two scenarios are different.”We’re buying a commodity that costs a certain amount per unit – that’s what our bills say. It’s $7 for a thousand cubic feet, and now they’re saying, ‘It’s really not that,'” he said. “Even if you use their figures, people in Aspen are paying 7 percent more than they should, but I can’t confirm their figures.”Naomi Havlen’s e-mail address is nhavlen@aspentimes.com


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