Southwest Gas customer service fee increased

Malcolm Hall

Tuesday, Jan. 15, 2002 | 9:46 a.m.

The Public Utilities Commission of Nevada on Monday hiked the basic monthly service charge Southwest Gas charges all residential customers by $2, from $6 to $8.

Commissioners said the rate better reflects the level of fixed administrative costs incurred by Southwest to provide service.

Southwest Gas spokesman Roger Buehrer said the service charge -- which is levied regardless of how much gas is consumed -- helps cover the company's fixed costs such as operating trucks and maintaining meters.

"It's a fixed expense paid by all customers to partially cover the company's basic cost of operations, whether they use any gas at all," he said. "We still have to read the meters and have expenses servicing the customer."

Monday's action provides Southwest Gas with instructions on how to design rates based on a Dec. 1 commission decision reducing rates by 11.7 percent, or $9.64 per month, because of lower wholesale gas costs.

"The basic service charge increase from $6 to $8 will have an overall impact of reducing the cost per therm, so the commodity (natural gas) charge will drop," Buehrer said.

A therm is about 100 cubic feet of natural gas. The average residential customer uses about 79 therms a month.

"Overall, we're very pleased with the commission's actions in that they put this into effect with the decrease back in December and then made today's ruling and studied issues of the rate design," Buehrer said.

Up to a certain level of consumption -- 30 therms -- customers pay one rate, said commission spokeswoman Cynthia Messina.

"Usage over that level is charged a lesser rate because the overall revenue the company is allowed to earn must remain the same, but individual pricing components can change," she said.

Buehrer said the company hopes the new rates will go into effect Feb. 1, at the same time a current pending rate decrease will go into effect.

Tim Hay, the state's consumer advocate, said his office was concerned with the customer charge issue.

"The company proposed raising that fee from $6 to $10," he said. "Our office advocated keeping it at $6, but commission staff recommended $8, which is what they did. Although we're disappointed, it is certainly a decision we can live with."

Southwest Gas followed the Dec. 1 rate decrease with another asking commissioners to lower rates by another 11.1 percent, or $29.2 million a year, because of continuing decreases in the cost of natural gas.

If approved, the second decrease would reduce the bill for a residential customer using 79 therms a month in the winter from $67.79 to $60.41.