LETTER: Southwest gas wants a rate hike
The games that utilities and regulators play
September 3, 2020 - 9:00 pm
Review-Journal reporter Colton Lochhead’s recent front-page story about the latest general rate case filed by Southwest Gas points out the “utility once again tried to pass ‘inappropriate’ costs” to its customers. Such obvious inappropriate costs have been included in Southwest’s rate cases going back more than 40 years.
Similar costs could be found in the filings of other utilities around the country.
And Southwest is not the least surprised by the Public Utilities Commission‘s objection to the inclusion of items such as exorbitant dinner tabs, luxury vehicle rentals and hotel minibar charges. In fact, utilities expect such costs to be disallowed. They are known as “PUC throw-outs.”
Why include such costs if company officials anticipate they will not be approved? Because utility rate departments want to give regulators something to throw out so legitimate costs can be kept in. They understand that it could be political suicide if regulators don’t show they are looking out for the best interests of ratepayers by reducing the rates requested.
Gamesmanship? Of course. And it’s understood as such by both sides in the rate case. But it’s a game utility PR departments don’t like to play.