Tentative agreement by PUC, Southwest Gas could mean rate hike

Kevin Rademacher

Friday, Jan. 23, 2004 | 11:09 a.m.

An agreement hammered out in a Public Utilities Commission hearing on Thursday could raise residential natural gas rates 5.5 percent in Las Vegas.

The increase would be achieved by allowing Southwest Gas Corp. to stop credit payments of $14.2 million to customers that regulators approved in a previous rate case.

The new deal must be approved by a vote of the PUC, but Commissioner Adriana Escobar Chanos, who presided over Thursday's hearing, indicated that she will support the deal.

"In my opinion this is in the public interest, and I will recommend this be approved," she said.

The PUC could vote on the issue as early as Wednesday. If approved, the credits would end Feb. 1 and the average Southern Nevada residential customer's bill would go from $33.94 to $35.80.

The credit payments -- a small part of the existing rate structure -- are designed to reimburse customers for any over-collected balance based on past costs for natural gas.

The utility asked to stop the refunds because higher current gas costs had eliminated the old credit balance by Jan. 1. PUC staff advisers indicated that ending the credit made sense because any further over collection would eventually have to be refunded through higher rates.

"To prevent ratepayers from being credited with monies that may need to be repaid, with interest, staff requests that the commission ... schedule a proceeding as soon as possible to determine whether refunds should cease,' Louise Uttinger, PUC assistant staff counsel, said in a December filing.

Nevada Consumer Advocate Tim Hay in December said the request to end the credit amounted to an attempt to raise rates outside of the existing regulatory framework. Hay's Bureau of Consumer Protection, however, signed off on the deal Thursday.

Should the PUC approve the increase, it would offset a portion of the rate case request Southwest Gas made in December for a 25 percent rate increase. The $14.2 million would be deducted from the $59.8 million in annual revenue the company seeks to recover for higher prices it is paying for natural gas.

If that rate case is approved, the average residential bill would climb to $41.77.