By Jeniffer Solis/Nevada Current
Southwest Gas has proposed a rate increase for its captive Nevada customers that would bring $21.4 million in additional revenue for the utility company, citing higher natural gas prices as its justification.
If approved by utility regulators, the rate hike would increase the average monthly single-family residential bill in Southern Nevada by $2.77, or 4.82%. In Northern Nevada, the average single-family residential monthly bill would increase by $0.15, or 0.16%.
On top of the rate adjustment, the utility company is also seeking approval from the Nevada Public Utilities Commission (PUCN) to establish rate increases across several of its programs.
The increases are expected to take effect July 1, 2023 if approved. Utility regulators have already approved several quarterly rate increases, with the most recent taking effect Jan 1.
Nevada customers are becoming increasingly concerned over the stream of rate increases by Southwest Gas – one of the largest gas utilities in the country.
Tracy Byrd, a minister in Southern Nevada, expressed outrage at the proposed utility hike during a PUCN consumer session held Tuesday evening at its Las Vegas office on West Diablo Road.
“Southwest Gas is a bully that needs to be brought to reality. The reality is that consumers are fed up with this monopoly intimidating our community,” Byrd told commissioners. “Southwest Gas is saying that since natural gas prices are going up they need to raise our prices. Is that the only fix they can think of?”
Consumer advocates characterized the proposed rate increases as unnecessary changes that “punish” consumers who have no other options.
Several utility customers spoke of financial hardships Nevadans faced over the last several months, including inflation, high gas prices, and other utility rate increases.
Martha Orozco, a housekeeper, said in her native Spanish that her family is recovering from the economic consequences of the COVID-19 pandemic, however that recovery now feels like “theft.”
“Southwest Gas has contributed to this,” Orozco told commissioners. “I don’t have the privilege to climatize my house which was built in the 70s.”
Rate hikes have already increased Orozco’s natural gas rates from about $75 a month to $179, she said.
“I can’t save for my retirement and that worries me every day,” Orozco said.
Natural gas prices have surged over the past two years as demand increases for power generation, while power plants phase out coal in a move to decrease emissions. Continued high demand for U.S. liquefied natural gas exports in Europe has also decreased domestic supplies, according to the U.S. Energy Information Administration.
Last year, the average cost of wholesale U.S. natural gas was the highest it has been since 2008, according to the agency.
Overall, the historic prices are due to a combination of factors: widespread below-average temperatures, high consumption, reduced natural gas flows, and pipeline constraints.
Rising natural gas prices are passed through at-cost directly to utility customers and the impacts are being felt throughout the western United States, with bills hundreds of dollars higher than normal.
Nevada law requires natural gas utilities to file annual rate adjustment applications to review the fairness of customer costs for the past year.
Southwest Gas argues their proposed rate increase and justification are “reasonable and prudent.”
The proposed increases are primarily due to increases in the price of natural gas, costs from infrastructure expansions, and to a lesser extent increased transportation rates, according to the utility.
The company’s application also proposes increases to cover interest expense, unrecovered gas cost expense, and program rates for conservation and energy efficiency and renewable energy.
However, rate hikes by the company would follow higher-than-average bills in January. While winter gas bills are always higher than in the warmer months, this year Nevada saw colder-than-usual temperatures along with several other states across the nation.
LaVerne Gentry, 77, said she chose to speak at Tuesday’s customer session for herself and other seniors on a fixed income who are disproportionately affected by utility rate increases. Gentry said her natural gas bill went from $25 a month up to as high as $196, forcing her to keep her home colder to stave off costs.
“Just because social security gave the seniors a few more dollars Southwest seems to want to take those few dollars that we just got,” Gentry said. “Then you read the information they send you but half of it I don’t even understand. You’re saying the rate increase is necessary. Necessary for who? Sounds like it’s for Southwest.”
Several advocacy groups also spoke at the hearing, asking the PUCN staff to deliver more programs that boost the energy efficiency in homes while providing more affordable electric appliance options.
Representatives for the Nevada Conservation League, Progressive Leadership Alliance of Nevada, Faith Organizing Alliance, and Chispa Nevada said their members are seeking solutions to protect their household budgets.
“For Nevadans out there experiencing intense price hikes, just know you are not alone,” said communications director for Nevada Conservation League, Angelyn Tabalba. “Volatile methane gas prices are largely to blame. If we continue to rely on methane gas we’re going to see that reflected in our bills. We need immediate relief like energy efficiency programs and long term solutions like investing in clean energy.”