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Southwest Gas to raise rates, but insists customers will see lower bills

Updated April 4, 2024 - 7:10 pm

Southwest Gas received approval Thursday to increase some of its rates but customers will still see lower monthly bills because of a drop in fuel costs. Not everyone is happy with the decision.

While the approved increase in Southwest Gas’ delivery charge is expected to increase monthly bills for single-family residences in Southern Nevada by $6.44, or 8.5 percent, the utility said the same customer will actually see a decrease in their bills. Natural gas rates are down 9.9 percent for Southern Nevada customers, the utility said.

The rate increase is expected to go into effect by June, Southwest Gas said. And the utility’s next quarterly gas cost adjustment is effective in July.

Despite the rate increase, the drop in natural gas prices are expected to be a relief for customers who saw their bills increase by more than 50 percent during the winter months compared to the previous year. Southwest Gas said last month that bills were up because the cost to buy natural gas increased by over 75 percent in the past two years. Prices were also higher because of increased demand last winter and global events, including the Russia-Ukraine war, the utility said.

But things have changed in recent weeks.

“We also expect gas costs to continue to be lower through the first half of this year, helping reduce customer bills,” Southwest Gas said in a statement following the Public Utilities Commission’s meeting Thursday where the delivery charge increase was approved. “The change to individual customer bills will vary depending on the amount of gas consumed.”

In its order Thursday, the PUC said it initially thought about putting in some cost mitigation measures for customers but decided against it since the drop in natural gas prices would allow customers to see a reduction in their bills.

The PUC’s decision was criticized by the Nevada Conservation League since any decrease in rates is reliant on fuel costs going down.

“By continuing to depend on methane gas, Nevada residents will continue to be exposed to financial instability and unnecessary risk due to potential price surges as utilities remain unaffected,” the Nevada Conservation League said in a statement.

Chispa Nevada, an organization within the League of Conservation Voters that advocates for healthier environments in Hispanic communities, also expressed disappointment in the order.

“Our families are struggling to pay for basic needs and cannot afford another rate increase,” said Audrey Peral, the program director for Chispa Nevada, in a statement. “So long as Nevadans are dependent on imported gas, our bills will continue to be unpredictable. We demand the (PUC) reject any more rate increases and seek a transition to local, affordable, clean energy solutions.”

Southwest Gas asked for the rate increase rates to boost the annual revenue the utility gets from its Nevada customers by roughly $65.6 million. Southern Nevada customers will provide $56.5 million of that increased annual revenue for Southwest Gas and Northern Nevada customers will provide $9.5 million.

The utility said it would be use the increased revenue to invest in capital projects and address growth in its Nevada customer base.

The order also set the rate of return — how much it can profit — of 7 percent for its Southern Nevada operations and 7.1 percent for Northern Nevada operations.

Contact Sean Hemmersmeier at shemmersmeier@reviewjournal.com. Follow @seanhemmers34 on X.

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