Southwest Gas cutting Nevada rate hike request

Wednesday, Dec. 27, 2000 | 11:11 a.m.

Southwest Gas Corp. has sold excess natural gas capacity to California utilities to lessen the blow of higher rates in Nevada.

The Public Utilities Commission of Nevada is expected to approve a rate case settlement with Southwest Gas on Thursday that would increase gas rates by 23.8 percent in Southern Nevada.

Southwest spokesman Roger Buehrer said that means an average residential customer will see rates increase from $43.81 a month to $54.24 a month for 67 therms. A therm is equivalent to 100,000 British thermal units. A BTU is the amount of fuel needed to raise a pound a water one degree.

Southwest acquires capacity days, weeks or months in advance, based on anticipated customer needs, Buehrer explained. When the company has more fuel capacity than it needs, it can sell the excess on the open market.

The gas the company receives in Southern Nevada comes from Texas and Oklahoma from the El Paso Natural Gas Co., and from Wyoming via the Kern River Pipeline, operated by the Williams Cos. Both supply lines continue west into California, where the El Paso line is operated by Pacific Gas & Electric Co., and the Kern River line continues to Bakersfield, Calif. As a result, Southwest was able to sell about $10 million in capacity to California utilities.

"Originally, the increase could have been about $10 million more," Buehrer said. "The 23 percent increase would have been closer to 28 percent."

The PUC, which also will consider a $15.7 million rate increase for Nevada Power electricity rates Thursday, already approved a 9.2 percent gas rate increase in November.

Electricity rates have climbed 12 percent, or about $9.24 per residential customer, in five increases since July. A seventh rate increase -- an $8.1 million proposal which would take effect Feb. 1 -- is expected to be heard by the PUC next month.

Buehrer stressed that higher natural gas prices are hitting everyone nationwide, not just Southwest's 400,000 Clark County residential customers.

"What's happening to natural gas is not isolated to Nevada," he said. "It's a nationwide phenomenon and we're informing our customers about it in newspaper ads."

The company has scheduled full-page ads in Nevada's daily newspapers, including the Sun, in today's and Thursday's editions.

In today's ad, the company explains that because natural gas supplies are low, the economic law of supply and demand is forcing the price up.

"During the past few years, the price of natural gas was so low it became unprofitable to keep a large number of wells in operation," today's ad says. "Now that the price has risen, this situation has reversed. More rigs are drilling for natural gas than at any time in the last 15 years. However, it will take months before the full effect of these additional supplies impact local prices."

The utility also encourages customers having trouble paying their bills to seek assistance from the company. The company recommends help from charitable agencies that can provide financial assistance, and the company's long-held equal payment plan that levels the price so that the same amount is paid every month instead of following spikes brought on by increased usage.

The company also offers energy-saving tips on its Internet site, www.swgas.com.