Your gas bill will be going down in July. Here’s why

Southwest Gas customers will see a decrease in their bills starting next month.

The Public Utilities Commission of Nevada voted on Monday to decrease rates for Southwest Gas customers in Nevada to recover the costs of purchasing natural gas for its customers. Southern Nevada customers will save about $13 per month, and Northern Nevada customers will save over $22 per month.

The rate change will go into effect on July 1.

This comes after Southwest Gas found they had an over-collection of $196.9 million in Southern Nevada and an over-collection of $44.2 million in Northern Nevada over the previous quarter, which ended on March 31. They filed an application to adjust its Deferred Energy Account Adjustment in May after finding out about the over-collection because its Base Energy Tariff Rate was set too high in the previous quarter.

“The DEAA rate eliminates the difference between the BTER revenues and the utility’s actual costs of fuel and purchased power, so that in the end, ratepayers only reimburse the utility for its actual costs,” said the PUCN in a press release. “If the BTER was set too high, customers receive a credit in the DEAA. If the BTER was too low, the utility collects the difference.”

In short, in Nevada, utility companies are not allowed to profit off fuel purchased on behalf of their customers, meaning they are reimbursed dollar-for-dollar.

These rates are set based on the average cost of natural gas over a recent 12-month period, however natural gas costs are adjusted quarterly. This leads to under-collection, which leads to an increase in bills, over-collection, which leads to a decrease in bills for customers.

In this case, Southwest Gas overcollected because natural gas prices peaked in January and February 2023, but started to go down by winter 2023-24, leading to the over-collection.

“Recent market conditions have led to lower natural gas prices, and with the support of Staff, the BCP and the Commission, we’re pleased to pass on the effect of those reduced costs to our Nevada customers earlier than expected,” said Amy Timperley, senior vice president and chief regulatory officer at Southwest Gas. “Notwithstanding the effectiveness with which the DEAA quarterly adjustment has historically performed, we feel that implementing a larger credit DEAA rate as soon as practical is appropriate to help our Nevada customers recognize the benefit of lower rates.”

Contact Emerson Drewes at edrewes@reviewjournal.com. Follow @EmersonDrewes on X.