Groups recommend reduction of Southwest Gas request for rate hike

Kevin Rademacher

Wednesday, June 9, 2004 | 12:15 p.m.

Both the Nevada consumer advocate and the staff of the state Public Utilities Commission on Tuesday recommended reducing substantially an $18.9 million general rate increase requested by Southwest Gas Corp. of Las Vegas.

"We were disappointed they chose to file this," said Consumer Advocate Tim Hay, whose Bureau of Consumer Protection recommended that the PUC throw out "virtually all" of the requested increase.

PUC staff recommended throwing out about $9 million of the request.

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 are also set in these cases.

If this case is approved as proposed, rates would rise by 6.2 percent beginning Sept. 1.

Southwest Gas also has implemented two approved purchased-gas adjustment rate increases this year to cover the rising cost of natural gas it delivers to customers. Those increases have raised rates by 5.5 and 17.1 percent.

Last week the company asked for another purchase-gas adjustment, which would raise $16.3 million through a 5 percent increase the company wants to implement Dec. 1.