Southwest Gas may raise rates by nearly $30 million

By Kyle Roerink

Thursday, Oct. 29, 2015 | 2 a.m.

On Nov. 17, the state Public Utilities Commission will hear testimony on whether Nevadans will see heftier bills from Southwest Gas. The commission will rule on a request made by the company in June to raise rates by an aggregate of $29.4 million, which it said was necessary to compensate for decreased demand stemming from warmer-than-expected weather.

As a regulated monopoly, the company could ask the PUC to raise rates to collect revenues it planned to earn but didn’t receive. This year's request followed a $7.4 million rate hike the PUC approved three years ago after reviewing the company’s investments, operations costs and expected sales based on historical weather patterns. If approved as requested, the new rates would amount to a 6.3 percent increase in Northern Nevada and a 5.6 percent increase in Southern Nevada.

The 2012 estimates did not account for the unpredictable back-to-back warm winters that reduced demand for heating homes and buildings. In the past, the company has returned money after predicting colder winters.

Sonya Headen, Southwest Gas spokeswoman said, “Customers, on average, can expect adjustments that range anywhere from a refund to an increase that generally results in a minimal impact." The 2013 increase amounted to $1.48 per customer per month in Northern Nevada and 62 cents in the South.

Critics of the request said that the company, which has 708,000 customers in Nevada, was asking for too much.

The Attorney General’s Bureau of Consumer Protection, which advocates for ratepayers at the PUC, said the company was charging too much from consumers and should reduce bills. The bureau said Southwest Gas had overcharged by more than $6.1 million and should credit the money back to consumers. It also questioned employee expenses totaling more than $4,000 for lunches on the Las Vegas Strip and a conference in New Mexico. The gas company used ratepayer dollars at places like Maggiano’s and Miller’s Ale House at Town Square.

“It appears there was very little management oversight of these employee expenses or that the manager who approved these expenses does not understand what type of employee expenses are recoverable from ratepayers,” David Chairez, BCP regulatory manager, said in testimony given to the PUC on Oct. 22.

The PUC is reviewing the utility’s request and will make a decision by the end of the year.