PUC draft suggests cutting rate request

Kevin Rademacher

Wednesday, Aug. 25, 2004 | 10:32 a.m.

Southwest Gas Corp. of Las Vegas could see its $18.9 million, or 6.2 percent, general rate increase request cut by more than $12 million when the state Public Utilities Commission debates the case on Thursday.

In a draft order proposed by PUC Commissioner Adriana Escobar Chanos, she recommends that the utility be allowed to increase rates by $6.2 million. A final decision in the case must be approved by the three-member commission.

In hearings in July, the PUC staff has recommended an increase of about $9 million. The state Bureau of Consumer Protection said only about $41,000 should be allowed.

Among the recommendations made in Chanos' order was a 50 cent per month increase in the basic service charge, the charge all customers pay regardless of gas consumption.

Southwest Gas has asked to raise the current $8 charge to $11.20 a month in the summer (between May and October) and $14.50 in the winter. That would be offset by a lower usage-based commodity charge, evening out customer bills.

The company argued that its proposal result would be a more stable return and smaller spikes in customer bills in cold months when usage climbs.

A general rate case allows utilities to recover construction and maintenance costs for distribution systems as well as general administrative costs. Rates of return for shareholders also are set in these cases. If the case is approved as proposed by the utility, rates would rise by 6.2 percent beginning Sept. 1.

In a consumer session this evening, PUC will be gathering feedback on Southwest Gas Corp.'s separate $16.3 million, or 5 percent, annual purchased gas adjustment rate increase request. That request is designed to cover higher gas costs.