Updated June 1, 2023 - 7:11 pm
Southwest Gas is increasing its rates again going into the summer months, hiking the bills of residential customers in Southern Nevada as much as 27 percent.
It marks the fourth consecutive quarter that Southwest Gas has increased its rates; the rates will take effect July 1 and stay in effect through September.
The increase, which has been approved by the Public Utilities Commission, will raise the rates for customers in both Northern and Southern Nevada. Customers in Southern Nevada will see larger percentage increases than those in Northern Nevada.
The rate adjustments for Southern Nevada will increase Southwest Gas’s revenue by $238.8 million, or 29.5 percent, and its adjustments for Northern Nevada will increase its revenue by $44.8 million, or 22.7 percent.
Southern Nevada impact
— Single-family residential customers can expect their rates to go up by 27.4 percent, which will increase the average monthly bill by $22.30.
— Multifamily residential customers will see their rates go up by 25.2 percent, increasing the average monthly bill by $11.60.
Northern Nevada impact
— Single-family residential customers can expect their rates to go up by 21.4 percent, raising the average monthly bill by $26.35.
— Multifamily residential customers will see their rates to go up by 20.6 percent, which will boost the average monthly bill by $19.40.
Other rate increases
The summer rate increase will take effect on the same day as new annual rate increases for Southwest Gas customers. The annual rate increase will boost the bills of single-family residential ratepayers in Southern Nevada by 3.5 percent. Multifamily residential ratepayers will see an increase of 1.6 percent.
Southwest Gas blamed the latest quarterly increase on the 12-month average cost of natural gas. The rates are increasing because Southwest Gas still needs to recover costs it incurred while paying for the elevated cost of natural gas in the past year.
“The cost of natural gas purchased by Southwest Gas on behalf of customers, at no profit to the company, substantially increased during the 12 months ending March 2023 compared to the 12 months ending March 2022,” Amy Washburn, a Southwest Gas spokeswoman, said in a emailed statement.
Southwest Gas estimates that it may take until the first quarter of 2024 for the 12-month average cost for natural gas to decrease and for quarterly rates to decrease, according to Washburn.
In 2022, natural gas prices peaked nationally in August and have declined in the following months, according to the U.S. Energy Information Administration. The Consumer Price Index shows that utility gas services nationally in April decreased by 2.1 percent from the previous year.
This fourth consecutive quarterly rate adjustment is the highest rate increase in the past year. The three previous rate adjustments increased the overall rates in Southern Nevada by 17.7 percent in April, 5.2 percent in January and 8 percent in October 2022.
Southwest Gas’ rate increases are higher than those requested by NV Energy, which has proposed an 11-12 percent increase during the summer months for its residential customers in Southern Nevada and about a 2 percent hike for residential customers in Northern Nevada. But NV Energy also proposed to decrease its summer rates by a range of 3.2 percent to 9.64 percent, though the PUC has yet to rule on either request.
Washburn said that Southwest Gas is following the application NV Energy has for its summer rates and it “may look” to pursue a similar action to mitigate the impact of rate increases.
An NV Energy spokesperson said the Southwest Gas adjustments won’t have an impact on the rates NV Energy is seeking.
The EIA estimates that in 2022 56 percent of electricity generated in Nevada came from natural gas.