SW Gas cutting rates

Grace Leong

Tuesday, Oct. 29, 2002 | 11:15 a.m.

Declining natural gas prices prompted Southwest Gas Corp. and several affected parties to file an agreement Monday calling for a 4.1 percent reduction in gas rates for customers in Southern Nevada and a 14 percent cut for those in Northern Nevada starting as early as Friday.

If approved by the state Public Utilities Commission, the average Southern Nevada customer using 67 therms of gas a month in winter will see bills drop from $48.15 to $46.82. That represents a 2.8 percent drop for the average customer, though the overall decrease for all customers is 4.1 percent.

In Northern Nevada, the average customer using 98 therms a month will see bills drop from $113.96 to $97.87. That's a reduction of $16.09 or 16 percent, but the overall decrease for all customers is 14 percent.

Roger Buehrer, Southwest Gas spokesman, said the agreement proposes to reduce gas rates by $8.7 million in Southern Nevada and $13.5 million in Northern Nevada.

The PUC will weigh in on the rate cuts proposed by Southwest Gas, the PUC's Regulatory Operations Staff, the state Bureau of Consumer Protection, Kerr McGee Chemical LLC and the Nevada Energy Buyers Network on behalf of the Sahara hotel-casino at a meeting Friday.

"For Northern Nevada customers, this represents the first reduction in gas rates in two years," Buehrer said. "Natural gas prices from suppliers serving customers in Northern Nevada decreased more rapidly than that in Southern Nevada because of the volatility of the marketplace."

"Half of the gas supplied to Northern Nevada comes from Canada, where prices have been dropping faster than in areas where suppliers buy gas for Southern Nevada. Half of the gas supplied to Southern Nevada comes from the Rocky Mountain area, and the other half from Texas, New Mexico and Oklahoma," he said.

Dick Burdette, the PUC's Regulatory Operations Staff manager of resource and market analysis, attributed the relatively faster drop in natural gas prices in the Rocky Mountain and Canadian areas to slower demand following a slowdown in business growth in California, one of their main markets.

"The drop in demand from California is causing suppliers in Canada and the Rocky Mountain area to look for more customers," he said. "Prices could change if the economy turns around quickly, or if growth in Northern Nevada, which is typically slower than Southern Nevada, picks up, or if problems in the Middle East drove up prices of crude, which will have impact on gas prices."

"We're eager to get this decrease in place in time for winter. It was a cooperative effort to make this happen. Southern Nevada customers experienced two reductions in gas rates last winter," Buehrer said. "We don't anticipate any further decrease in gas rates for Nevada customers, after this one, in the near future."

Southwest Gas, in its annual purchased-gas cost adjustment in June for the year ending March 31, initially recommended the PUC make no changes in rates.

"But we later agreed with the commission staff and the (state) Bureau of Consumer Protection that it's in the best interest of our customers to reduce rates in light of the drop in natural gas prices from April 1 to early October," Buehrer said.

Southwest Gas serves 550,000 customers in Nevada, of which 450,000 are in Southern Nevada.