Southwest Gas seeks 5.9 percent rate hike

By Steve Green

Friday, April 3, 2009 | 6:21 p.m.

Southwest Gas Corp. said Friday it’s seeking a rate hike of 5.9 percent effective Nov. 1 for its Southern Nevada customers.

The request comes less than two months after the company, citing its strong financial position, increased the amount of profit it pays out quarterly to shareholders.

The utility, based in Las Vegas, said it would file a General Rate Case with the Public Utilities Commission of Nevada.

“It has been five years since Southwest Gas last submitted a (general rate case) to the PUCN to increase its base rates to recover increased costs of operating its system,” Roger Montgomery, vice president of pricing, said in a statement.

In Northern Nevada the company is requesting to increase its authorized operating revenue by $1.7 million or 1.4 percent. In Southern Nevada, the request is for $28.8 million, or 5.9 percent, and would increase an average monthly bill of $53.97 by $3.78 to $57.75.

Montgomery also said that Southwest Gas anticipates that recently lower prices for natural gas will result in the company passing on some of those savings, potentially offsetting the increase from the general rate case.

Southwest Gas also will propose new initiatives to help consumers save energy.

The request follows a decision, announced Feb. 27, by the company’s board of directors to increase the company’s quarterly dividend to shareholders by 6 percent from 22.5 cents per share to 23.75 cents per share.

"While economic turmoil at the national level has clouded the forecast for near-term customer growth, the financial condition of Southwest is solid," Chief Executive Jeffrey Shaw said at the time. "In addition to improved cash flows and capital structure, our financing needs have decreased and our liquidity remains strong. The dividend increase is an important ingredient to facilitate our continued favorable access to the capital markets to fundongoing infrastructure needs.”

In the fourth quarter, Southwest Gas said it earned $31.2 million, or 71 cents per share, on revenue of $509 million.