LAS VEGAS, March 8 /PRNewswire/ -- Citing a need to recover increasing
operating costs and to change the way its rates are structured, Southwest Gas
filed an application today (Monday) with the Public Utilities Commission of
Nevada (PUCN) for a general rate increase.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010823/SWXLOGO )
The request calls for an annual revenue increase of about $18.9 million or
6.2 percent in southern Nevada and about $8.6 million or 9.4 percent in
northern Nevada. If approved, the new rates would go into effect in
The new rates would add $3.96 a month to a winter bill of $65.14 for a
southern Nevada residential customer using 66 therms a month. In northern
Nevada, the bill for a residential customer using 102 therms a month would add
$12.84 to a winter bill of $111.33.
A major part of the company's request is to improve the recovery of its
fixed costs by implementing new basic service charges. According to Roger
Montgomery, Southwest's vice president of Pricing, the increase in the basic
service charge will provide the company with a realistic opportunity to earn
the returns authorized by the PUCN.
In recent years, consumers have been using less natural gas because
natural gas appliances are more energy efficient. At the same time, the
company has made substantial capital investments to fund customer growth,
normal pipe replacement and other important gas system improvements.
In southern Nevada, the company is proposing a residential basic service
charge of $11.20 per month in the summer (May through October) and $14.50 per
month in the winter. In northern Nevada, the residential basic service charge
would be $13.75 per month in the summer and $22.50 per month in the winter.
The new basic service charge will minimize the need to increase the per therm
or commodity charge.
The company stated in its application that despite success in controlling
costs and increasing productivity, it has been unable to earn the return
authorized by the Commission. "We have always provided safe and reliable
customer service at reasonable prices," Montgomery said. "This proposed
revenue increase, combined with an improved rate design will give the company
a better opportunity to recover its costs so that it can attract the capital
necessary to operate its business in the most effective way."
The company is asking for a rate of return of 8.03 percent in southern
Nevada and 9.18 percent in northern Nevada. The company is currently earning
5.92 percent in southern Nevada and 4.19 percent in northern Nevada, well
below its present authorized levels.
The filing is the first general rate increase request by the company in
three years. General rate applications address the costs associated with
operating the company's distribution system and providing customer service.
They are not related to recent rate changes that are the result of the costs
of buying natural gas. The cost of buying natural gas fluctuates according to
market prices and rates are adjusted up or down, as needed, to match the
Southwest Gas provides natural gas service to more than 530,000 homes and
businesses in Nevada, 70,000 more customers since its last rate case.
SOURCE Southwest Gas