File No. 69-00401
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
____________________________
Form U-3A-2 for 1999
Statement by Holding Company Claiming Exemption
Under Rule U-2 From the Provisions of the Public
Utility Holding Company Act of 1935
To Be Filed Annually Prior to March 1
QUESTAR REGULATED SERVICES COMPANY
(Name of Company)
hereby files with the Securities and Exchange Commission, pursuant to
Rule 2, its statement claiming exemption as a holding company from the
provisions of the Public Utility Holding Company Act of 1935, and
submits the following information:
1. Name, state of organization, location and nature of business
of claimant and every subsidiary thereof, other than any exempt
wholesale generator (EWG) or foreign utility company in which claimant
directly or indirectly holds an interest.
Questar Regulated Services Company ("Regulated Services" or the
"Company") is a Utah corporation with its principal executive office
and principal place of business at 180 East 100 South, P.O. Box 45360,
Salt Lake City, Utah 84145-0360. It is a wholly owned subsidiary of
Questar Corporation ("Questar") which claims an exemption as a holding
company under the Public Utility Holding Company Act of 1935 (the
"PUHCA"). Regulated Services was created to perform specified
administrative services for Questar Gas Company ("Questar Gas") and
Questar Pipeline Company ("Questar Pipeline"). Effective January 1,
1997, it owns the outstanding shares of common stock issued by Questar
Gas and Questar Pipeline. On December 31, 1996, the Company filed an
initial Form U-3A-2 with the Securities and Exchange Commission and
has filed Form U-3A-2's on a timely basis since then.
Questar Gas is a Utah corporation with the same address noted
above for Regulated Services. It is engaged in the retail
distribution of natural gas in the states of Utah, Wyoming, and Idaho.
It is a "gas utility company" as that term is defined in the PUHCA.
Questar Gas also transports natural gas for industrial users in Utah
and Wyoming. Questar Gas's activities in Utah and Wyoming are subject
to regulation by the respective Public Service Commissions in those
states. Questar Gas has a contract to sell and transport natural gas
to one customer in Colorado. This isolated activity is not subject to
the jurisdiction of the Colorado Public Utilities Commission. Questar
Gas's customers in Idaho are served under the provisions of its Utah
tariff. Pursuant to a special contract with the Idaho Public
Utilities Commission, Questar Gas's Idaho natural gas service is
regulated by the Public Service Commission of Utah.
Questar Pipeline is a Utah corporation with its principal place
of business at the same address noted above. It transports and stores
natural gas in interstate commerce in the Rocky Mountain states of
Utah, Wyoming, and Colorado. It does not make any sales of natural
gas and is not a gas utility company.
As of January 1, 1999, Regulated Services owns a third
subsidiary, Questar Energy Services, Inc. ("QES") that does not make
any sales of natural gas and is not a gas utility company. QES
performs energy management services, appliance financing, and other
activities.
Regulated Services does not have any interest, direct or
indirect, in any exempt wholesale generator or foreign utility
company. Employees in Regulated Services perform accounting, human
resources, legal, marketing, engineering, and communication services
for Questar Gas, Questar Pipeline, and QES.
2. A brief description of the properties of claimant and each of
its subsidiary public utility companies used for the generation,
transmission, and distribution of electric energy for sale, or for the
production, transmission, and distribution of natural or manufactured
gas, indicating the location of principal generating plants,
transmission lines, producing fields, gas manufacturing plants, and
electric and gas distribution facilities, including all such
properties which are outside the state in which claimant and its
subsidiaries are organized and all transmission or pipelines which
deliver or receive electric energy or gas at the borders of such
state.
Questar Gas was distributing natural gas to 686,317 sales and
transportation customers (defined as active meters) in Utah,
southwestern Wyoming, southeastern Idaho, and western Colorado as of
year-end 1999. Of these customers, 662,897 were located in Utah,
21,904 were located in southwestern Wyoming, 1,515 were located in
southeastern Idaho, and one was located in western Colorado. Questar
Gas owns and operates approximately 20,696 miles of street mains,
service lines and interconnecting pipelines in its distribution
system, including approximately 19,753 miles in its Utah distribution
system.
Under the terms of a settlement agreement among Questar Gas,
Wexpro Company ("Wexpro," an affiliate) and various state parties
ending several years of litigation, Questar Gas owns the natural gas
produced from gas reservoirs that were productive as of August 1,
1981. Most of these productive reservoirs are located in southwestern
Wyoming and northwestern Colorado; most of the gas produced from such
reservoirs is distributed to Questar Gas's retail natural gas
customers. Gas owned by Questar Gas but produced from reservoirs
outside the location of pipelines owned by Questar Pipeline is
generally sold to or exchanged with other companies. Gas owned by
Questar Gas (including related royalty gas) constituted 49 percent of
Questar Gas's total gas supply in 1999 and is reflected in its rates
at "cost-of-service" prices.
Questar Gas is directly responsible for all gas acquisition
activities. Questar Pipeline transports gas volumes purchased
directly by Questar Gas and transports cost-of-service gas owned by
Questar Gas and produced by Wexpro. Questar Gas takes delivery of gas
from Questar Pipeline and an unaffiliated interstate pipeline at
various points in Utah, Wyoming and Colorado. Questar Gas does not
currently own any interstate transmission lines or gas manufacturing
plants.
3. The following information for the last calendar year with
respect to claimant and each of its subsidiary public utility
companies:
(a) Number of kwh of electric energy sold (at retail or
wholesale) and Mcf of natural or manufactured gas distributed at
retail.
During the 1999 calendar year, Questar Gas sold 92,024,000
decatherms ("Dth") of natural gas, including 82,201,000 Dth at retail
(defined as residential and commercial customers), and transported
51,643,000 Dth of natural gas. (Questar Gas generally reports volumes
in Dth; a Dth is equal to ten therms or one million Btu's. In Questar
Gas's gas system, each Mcf of natural gas contains approximately 1.045
Dth.) For purposes of this report, Questar Gas's "retail" customers
are general service or residential and commercial customers. The
9,823,000 Dth difference between the total sales number and the retail
sales number includes sales to industrial customers that are not
involved in resale transactions and sales of natural gas to refueling
stations that are resold for natural gas vehicles. Questar Gas's
total revenues for 1999 were $449,937,000, of which $413,067,000 were
attributable to its operations in Utah, $18,274,000 were attributable
to its operations in Wyoming, $121,000 were attributable to its
operations in Colorado, and $952,000 were attributable to its
operations in Idaho. (Questar Gas's total 1999 revenues included
$17,523,000 in addition to revenues from gas deliveries.) Questar Gas
did not distribute any manufactured gas during such calendar year.
(b) Number of kwh of electric energy and Mcf of natural or
manufactured gas distributed at retail outside the state in which
each such company is organized.
During the 1999 calendar year, Questar Gas distributed at retail
3,205,000 Dth of natural gas outside the state of Utah, Questar Gas's
state of incorporation.
(c) Number of kwh of electric energy and Mcf of natural or
manufactured gas sold at wholesale outside the state in which
each such company is organized, or at the state line.
During 1999, Questar Gas sold 447,000 Dth of natural gas outside
the state of Utah, or at the state line of such state, to industrial
customers and to natural gas refueling stations. Questar Gas, during
1999, also transported 382,000 Dth of natural gas outside Utah.
Questar Gas did not sell at wholesale any manufactured gas during
1999.
(d) Number of kwh of electric energy and Mcf of natural or
manufactured gas purchased outside the state in which each such
company is organized or at the state line.
During the 1999 calendar year, Questar Gas purchased 31,072,000
Dth of natural gas or approximately 33 percent of its total gas supply
outside the state of Utah or at the state line. Regulated Services
did not purchase any gas volumes.
4. The following information for the reporting period with
respect to claimant and each interest it holds directly or indirectly
in an EWG or a foreign utility company, stating monetary amounts in
United States dollars:
(a) Name, location, business address and description of the
facilities used by the EWG or foreign utility company for the
generation, transmission and distribution of electric energy for
sale or for the distribution at retail of natural or manufactured
gas.
None. Regulated Services and its affiliates do not have any
interest, direct or indirect, in any exempt wholesale generator or
foreign utility company.
(b) Name of each system company that holds an interest in
such EWG or foreign utility company; and description of the
interest held.
None. Regulated Services and its affiliates do not have any
interest, direct or indirect, in any exempt wholesale generator or
foreign utility company.
(c) Type and amount of capital invested, directly or
indirectly, by the holding company claiming exemption; any direct
or indirect guarantee of the security of the EWG or foreign
utility company by the holding company claiming exemption; and
any debt or other financial obligation for which there is
recourse, directly or indirectly, to the holding company claiming
exemption or another system company, other than the EWG or
foreign utility company.
None. Regulated Services does not have any interest, direct or
indirect, in any exempt wholesale generator or foreign utility
company.
(d) Capitalization and earnings of the EWG or foreign
utility company during the reporting period.
None. Regulated Services does not have any interest, direct or
indirect, in any exempt wholesale generator or foreign utility
company.
(e) Identify any service, sales or construction contract(s)
between the EWG or foreign utility company and a system company,
and describe the services to be rendered or goods sold and fees
or revenues under such agreements(s).
None. Regulated Services does not have any interest, direct or
indirect, in any exempt wholesale generator or foreign utility
company.
EXHIBIT A
A consolidating statement of income and surplus of the claimant
and its subsidiary companies as of the close of such calendar year,
together with a consolidating balance sheet of claimant and its
subsidiary companies as of the close of such calendar year.
The following exhibits are attached to and made a part of this
filing:
Exhibit A-1 Consolidating Statement of Income, Questar Regulated
Services Company as of December 31, 1999.
Exhibit A-2 Consolidated Statement of Common Shareholder's
Equity, Questar Regulated Services Company as of
December 31, 1999.
Exhibit A-3 Consolidating Balance Sheet, Questar Regulated
Services Company as of December 31, 1999.
EXHIBIT B
If, at the time a report on this form is filed, the registrant is
required to submit this report and any amendments thereto
electronically, the registrant shall furnish a Financial Data
Schedule.
The requested Financial Data Schedule information has been
submitted.
EXHIBIT C
An organization chart showing the relationship of each EWG or
foreign utility company to associate companies in the holding-company
system.
Not applicable. The Company does not have an interest in any
exempt wholesale generator or foreign utility company.
The above-named Claimant has caused this statement to be duly
executed on its behalf by its authorized officer on this 25th day of
February, 2000.
QUESTAR REGULATED SERVICES COMPANY
Attest:
/s/Connie C. Holbrook By /s/D. N. Rose
Connie C. Holbrook D. N. Rose
Secretary President and
Chief Executive Officer
Name, title and address of officer to whom notices and correspondence
concerning this statement should be addressed:
Connie C. Holbrook
Secretary
Questar Regulated Services Company
180 East 100 South, P.O. Box 45360
Salt Lake City, Utah 84145-0360
Exhibit A-1
QUESTAR REGULATED SERVICES COMPANY
CONSOLIDATING STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Consol. Total
Questar Before Questar Questar Questar Questar
Regulated Interco. Interco. Gas Pipeline Energy Regulated
Serv. Co. Trans. Trans Co. Co. Services Serv. Co.
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
From unaffiliated customers $486,788 $486,788 $447,606 $36,922 $2,260
From affiliated companies 5,933 $71,832 77,765 2,331 75,238 196
TOTAL REVENUES 492,721 71,832 564,553 449,937 112,160 2,260 196
OPERATING EXPENSES
Natural gas purchases 185,629 71,636 257,265 257,265
Operating and maintenance 144,120 196 144,316 103,308 38,534 2,474
Depreciation and
amortization 53,183 53,183 36,426 16,743 14
Other taxes 10,137 10,137 7,625 2,488 24
TOTAL OPERATING EXPENSES 393,069 71,832 464,901 404,624 57,765 2,512
OPERATING INCOME (LOSS) 99,652 99,652 45,313 54,395 (252) 196
INTEREST AND OTHER INCOME 8,223 8,223 2,980 4,229 1,014
OPERATIONS OF UNCONSOLIDATED
AFFILIATES BEFORE INCOME TAXES
Loss (5,109) (5,109) (5,109)
Write-down of investment
in partnership (49,700) (49,700) (49,700)
(54,809) (54,809) (54,809)
DEBT EXPENSE (38,133) (38,133) (20,062) (17,466) (605)
INCOME (LOSS) BEFORE
INCOME TAXES 14,933 14,933 28,231 (13,651) 157 196
INCOME TAX EXPENSE (CREDIT) 3,854 3,854 9,012 (5,260) 28 74
NET INCOME (LOSS) $11,079 $11,079 $19,219 ($8,391) $129 $122
</TABLE>
<PAGE>
Exhibit A-2
QUESTAR REGULATED SERVICES COMPANY
STATEMENT OF COMMON SHAREHOLDER'S EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Retained
Shares Amount Capital Earnings
(Dollars In Thousands)
<S> <C> <C> <C> <C>
Balances at January 1, 1997
Issuance of common stock (1) 100 $400,735
1997 net income $55,660
Dividends
Preferred stock (192)
Common stock (42,000)
Premium paid to redeem preferred stock (48)
Balances at December 31, 1997 100 400,735 13,420
1998 net income 55,390
Common stock dividends (43,500)
Balances at December 31, 1998 100 400,735 25,310
1999 net income 11,079
Transfer of Questar Energy Services
from Questar Market Resources to
Questar Regulated Services (1,905)
Common stock dividends (44,500)
100 $400,735 ($10,016)
</TABLE>
(1) Questar Regulated Services Co. has 1 million shares
of $.01 par value stock authorized and issued 100 shares
November 22, 1996 to its parent company, Questar
Corporation.
<PAGE>
Exhibit A-3
QUESTAR REGULATED SERVICES COMPANY
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Questar
Regulated Interco. Questar Questar Questar
Services Trans- Regulated Questar Pipeline Energy
Consol. actions Serv. Co. Gas Co. Co. Services
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash and short-term investments $4,114 ($48) $1,708 $2,387 $67
Notes receivable from
Questar Corporation 3,100 2,000 1,100
Accounts and notes receivable 109,512 ($10,471) 5,755 83,098 21,704 9,426
Inventories 24,204 21,680 2,443 81
Prepaid expenses and deposits 4,584 (346) 3,168 1,782 (20)
Purchased gas adjustment 432 432
TOTAL CURRENT ASSETS 145,946 (10,471) 7,361 110,086 29,416 9,554
PROPERTY, PLANT AND EQUIPMENT 1,716,328 4,346 1,013,599 698,236 147
Less allowances for depreciation 652,437 2,494 421,111 228,784 48
NET PROPERTY, PLANT AND
EQUIPMENT 1,063,891 1,852 592,488 469,452 99
INVESTMENT IN UNCONSOLIDATED
AFFILIATES 11,724 (428,928) 428,928 11,724
OTHER ASSETS 33,930 501 20,978 12,435 16
$1,255,491 ($439,399) $438,642 $723,552 $523,027 $9,669
CURRENT LIABILITIES
Notes payable to Questar Corporation $132,700 $79,300 $42,500 $10,900
Accounts payable and accrued
expenses 66,543 ($10,471) $9,122 56,765 10,554 573
Interest payable 6,097 4,476 1,621
Federal income taxes payable 4,572 147 2,966 1,560 (101)
Other taxes payable 6,417 34 4,915 1,471 (3)
TOTAL CURRENT LIABILITIES 216,329 (10,471) 9,303 148,422 57,706 11,369
LONG-TERM DEBT, less current
portion 470,001 225,000 245,001
DEFERRED CREDITS 4,651 1,394 3,118 139
DEFERRED INVESTMENT TAX CREDITS 5,648 5,630 18
DEFERRED INCOME TAXES 128,143 (1,380) 79,713 49,873 (63)
COMMON SHAREHOLDER'S EQUITY
Common stock (29,525) 22,974 6,551
Additional paid-in capital 440,735 (163,910) 440,735 81,875 82,034 1
Retained earnings (deficit) (10,016) (235,493) (10,016) 158,544 78,726 (1,777)
TOTAL COMMON SHAREHOLDER'S
EQUITY 430,719 (428,928) 430,719 263,393 167,311 (1,776)
$1,255,491 ($439,399) $438,642 $723,552 $523,027 $9,669
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR3
<LEGEND>
The following schedule contains summarized financial information
extracted from the Questar Regulated Services Consolidated Statements of
Income and Balance Sheet for the period ended December 31, 1999, and is
qualified in its entirety by reference to such unaudited financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 1,255,491
<TOTAL-OPERATING-REVENUES> 492,721
<NET-INCOME> 11,079
</TABLE>
