The Arizona Corporation Commission (ACC) on Friday approved a small credit for Las Vegas, NV-based Southwest Gas Corp.’s Arizona natural gas utility customers that will stay on retail customers’ bills though the first part of 2011, the regulatory commission said. The “surcredit,” as the ACC designated it, will be effective Dec. 1.

The flat surcredit is about 8 cents monthly, benefiting customers in upcoming winter months, an ACC spokespersons said. It is now projected to be effective until around March 2011.

Southwest Gas currently has an overcollection in its balancing account of about $38 million, but the amount is still below the utility’s $55.8 million threshold that would trigger an adjustment. Nevertheless, since the overcollected amounts are projected to get even bigger the ACC and the utility agreed that it made sense to issue the credit now.

“The amount of the surcredit approved today will pay down the existing overcollection, address continuing overcollections and limit the risk of a large undercollection in the event of future increases in wholesale natural gas prices,” said an ACC spokesperson.

“Like other gas utilities in the state, while Southwest Gas is not allowed to make a profit on its wholesale gas costs; it is permitted to recover the cost of that gas,” the spokesperson said. “The company recovers the cost of the gas, including its transportation costs, through a purchased gas adjuster rate.”

Noting that every penny counts, the four ACC members voting unanimously for the billing credit, noted that there seemed to be a “lull” in the wholesale natural gas price rises. ACC Chairman Kris Mayes called the credit a “much-needed reprieve” for the gas-only utility’s customers in their state. “The commission is adamant that the utility companies provide these gas credits back to their customers in a timely way.”

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.