Although two major Southwestern utilities caution that the talks are in the very early stages, a city-run combination natural gas and electricity utility in Mesa, AZ is driving full speed ahead in seeking to partner or trade customers with the two biggest suppliers in its area.

Mesa’s city officials approached Phoenix-based Salt River Project (SRP), looking for potentially trading distribution systems serving the greater Mesa area, which is directly southeast of Phoenix and is rapidly growing. Mesa’s municipal utility serves about 15,700 electric customers in the core center of the city while SRP serves the faster-growing rest of the city, whose overall population is approaching a half-million.

The muni reportedly is seeking ways to cut its service costs by sharing services with SRP and entering into a sales agreement with the large quasi-public utility. An SRP spokesperson said discussions are still in the very preliminary stages, but they are ongoing. Mesa reportedly was looking for some areas in which to partner.

On the gas side, there are no formal talks but just some very “exploratory” discussions, a Las Vegas-based Southwest Gas spokesperson said Tuesday in response to a news reports locally that the Mesa city-owned utility was looking to sell or swap parts of its energy distribution systems.

“These can’t even be characterized as ‘preliminary’ discussions at this point; we’re just in the early stages of determining if something might be possible,” said the Southwest spokesperson, who did say that the gas-only utility with customers in California and Arizona in addition to southern Nevada is “always looking for strategic growth opportunities.”

In the past three years, Southwest purchased a 9,000-customer small utility serving the Cave Creek suburban area of Phoenix, and last year it purchased Spokane, WA-based Avista Utilities’ gas operations for 19,000 customers in the South Lake Tahoe area of California.

Unlike its electricity operations, the Mesa utility’s gas operations encompass the fastest-growing and largest area of Mesa. The muni serves about 50,000 gas utility customers and it is adding about 3,500 new ones each year. Noting that keeping up its utility infrastructure for both gas and electricity is challenging, Mesa has gone after potential partnerships with both SRP and Southwest Gas.

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