QUESTAR GAS ALLOWED TO RECOVER
PREVIOUSLY EXCLUDED PROCESSING COSTS

SALT LAKE CITY — The Utah Public Service Commission (PSC) ruled Wednesday that it will allow Questar Gas to recover natural gas processing costs of $3.76 million the PSC had previously denied. Questar Gas pays an affiliate to process natural gas at a plant near Price, Utah that was placed into service in June 1999.

Questar Gas files two types of rate cases to recover costs: "pass-through" cases allow the company to adjust rates to reflect changes in gas-related  costs; "general" rate cases cover the company's non-gas (operating) costs.

The PSC initially denied Questar Gas's request to recover processing costs through its pass-through proceedings. Questar appealed to the Utah Supreme Court and immediately filed a general rate case. The PSC subsequently approved recovery of annual costs of $5 million in general rates starting in August 2000. In October 2001, the Supreme Court ruled that the PSC had erred in denying Questar Gas's original request. Wednesday's order allows Questar Gas to recover previously excluded processing costs incurred during the 14-month period from June 1999 to August 2000.

Questar Gas had argued that the recoverable processing costs for the 14-month period were $5.35 million. The PSC agreed with that amount, but ruled that a portion of those costs had already been collected in the interim rates it granted in the 1999 general rate case. The difference is the $3.76 million approved Wednesday. Interim rates approved in January 2002 have already accounted for the increase so Wednesday's order will have minimal effect on Questar Gas customers' future bills.

Questar (NYSE:STR) is a $3.1 billion diversified natural gas company headquartered in Salt Lake City. Through subsidiaries, it engages in gas and oil development and production; gas gathering, processing and marketing; interstate gas transmission and storage; retail gas distribution; retail energy services; and information systems and technologies.