Southwest Gas wins approval for rate increase |

Southwest Gas wins approval for rate increase

Associated Press

LAS VEGAS – Southwest Gas rates will go up about 2.5 percent next week in Southern Nevada and about 7 percent in Northern Nevada, following recent approval by state utility regulators.

Company analysts said they were unable to immediately calculate the effect on a typical residential customer’s bill following Thursday’s decision by the state Public Utilities Commission. The rate increase will take effect Sept. 1.

The company had sought a 6.2 percent rate increase to recover $18.9 million in construction and maintenance costs, plus administrative costs and a rate of return for shareholders.

The state Consumer Protection Bureau had asked the commission to limit the request to $41,000.

The three-member commission approved an increase of about $7.3 million, or $1.1 million more than recommended by Commissioner Adriana Escobar Chanos, the hearing officer in the case.

The commission also raised the service charge for gas hookups by 50 cents, to $8.50. The basic service charge is paid by every customer regardless of gas usage.

Recommended Stories For You

The commission ruling lets customers buy gas at lower prices per unit as they increase their consumption through so-called “declining block rates.”

Commissioners expressed concern about the company’s bond ratings, which are in the lowest “investment grade” category but could slip to high-interest junk bond levels. Analysts said that could result in higher rates for consumers.

“The evidence in this case indicates the company is in a somewhat delicate situation, and I think it is appropriate that we be sensitive to that,” Commissioner Carl Linvill said before voting for the rate increase.

The PUC also directed the gas company to prepare a plan within six months to encourage conservation while letting customers use more natural gas in the summer.