Las Vegas-based Southwest Gas Corp. will be preparing in late November to implement a rate increase in the southern half of the state where most of the population and growth is taking place, while it prepares to lower rates to customers in the northern part of the state.
Both changes take effect Dec.1, despite efforts by the utility to get Nevada regulators to deal with volatile natural gas costs on a monthly, more uniform basis like their counterparts in Arizona and California where the gas distribution company has the majority of its 1.5 million customers.
Earlier this month, the three-member Nevada Public Utilities unanimously agreed to raise Southwest’s rates $25.3 million, or 12.3%, for its 475,000 southern Nevada customers in and around the Las Vegas metropolitan area, but lower rates by $8.6 million, or 10.2%, for the 102,000 gas customers in the north, mostly in the Reno-Carson City, NV, area. Southwest operates separate distribution systems in the two regions that are not interconnected.
The utility had asked state regulators to change to a monthly rate adjustment mechanism to more closely reflect changes in the wholesale gas market as Arizona and California regulators have established. The Nevada PUC turned down the proposal, but did agree to study the issue, a Las Vegas-based Southwest spokesperson said.
Arizona maintains a 12-month rolling average for natural gas costs and adjusts rates up and down month, the Southwest spokesperson said, and California uses a 30-day futures average in adjusting retail rates monthly. (Southwest has 807,000 customers in Arizona, and about 125,000 in California’s eastern desert/mountain regions.)
In expressing disappointment with the PUC’s action, a Southwest spokesperson said the utility believes its customers would prefer small monthly rate adjustments, rather than a large annual rate change. Under Nevada law, the utility is required to file a purchased gas adjustment every June for implementation in the fall.
The Nevada PUC commissioner presiding over the Southwest case, Adriana Escobar Chanos, said the utility failed to adequately inform customers it wanted to switch to monthly adjustments, or to provide enough information to the PUC on how it intends to implement the change. “I think it is a great idea that we should look at in the future,” Escobar Chanos told local news media.
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