PUC rejects Southwest Gas hike

Friday, Feb. 20, 1998 | 10:30 a.m.

CARSON CITY -- The state Public Utilities Commission Thursday rejected the appeal of Southwest Gas Corp. to raise rates for its Nevada customers another $5.6 million.

Commission Chair-woman Judy Sheldrew said Southwest Gas, in the original hearing, failed to show it had pursued a wise policy in purchasing gas in a fluctuating market. She said the company did not take any steps to mitigate the price volatility on its customers.

She said the testimony at the hearing last year was replete with evidence of imprudence by the Las Vegas-based utility.

Roger Buehrer, a spokesman for Southwest Gas, said the utility was very disappointed at the rejection by the commission to modify its previous decision. "We will now have to review our options," he said.

It is too early to say what the utility will do, Buehrer said, adding that one option is to file suit to force the commission to allow the rate increase.

The PUC in November authorized Southwest Gas to boost its prices in Southern Nevada by $19.2 million, or 15.1 percent, to offset higher prices it paid for its natural gas. That's $3.8 million less than the 18.1 percent requested by the company.

In Northern Nevada, the PUC sliced the request from $8.3 million to $5.7 million, or an 11.6 percent increase.

After the decision, Southwest Gas asked for reconsideration saying it was entitled to all it had asked for. The company said the commission, in a previous case, had not objected to the purchasing practices of natural gas by Southwest Gas.

During the winter of 1996-97, there were spikes in the prices of natural gas. Sheldrew said these were two separate cases covering different time periods during that winter. And Southwest Gas she said did not meet its burden of proof in the second case that it followed a prudent policy in buying natural gas.

The PUC staff suggested that Southwest Gas could have locked in firm prices on some of its contracts to purchase natural gas, rather than using a short-term approach to buying on the open market.

Sheldrew denied Southwest Gas' contention the PUC's order was "unlawful, unreasonable and based on insufficient facts." She said the utility, in its petition for reconsideration, wants to be relieved of its burden of proof to show that the prices paid for the natural gas were justified.

The extra funds approved for Southwest Gas would not increase profits but would only cover the increased cost the company paid for the gas.

In other action, the commission delayed a decision on the application of Central Telephone-Nevada in Clark County to change its name to Sprint and to allow the company to market long-distance services. Centel was purchased by Sprint in 1993.

Sprint's na-tional long-distance service is available in Las Vegas but the local company has not been permitted to market it.

The PUC also adopted a regulation to make it easier for consumers who use pay telephones.

The pay phone will be required to list the amount of charge for a local call and local directory assistance; any time limits associated with a charge for a local call; and provide the name and toll free number for reporting and resolving complaints.

The regulations also will require pay telephones to have the address and telephone number of the Division of Consumer Complaint Resolution and instructions for dialing emergency and repair service.

These rules also ordered free access to a dial tone; emergency 911 service; repair service; subscriber service for numbers with the 800 area code; and relay service with the area code of 800 for persons with impaired hearing.

The rules become effective June 1.