Media Contact:
Cheryl Cox, Policy Advisor, 415-703-2495,
cxc@cpuc.ca.gov
ORA Press Room:
 http://www.ora.ca.gov/newsroom.aspx    

Southwest Gas
Customers Will See Double Digit
Bill Increases Based
on CPUC Proposal

SAN FRANCISCO, April 2, 2014 – The Office of Ratepayer Advocates (ORA), the independent consumer advocate within the California Public Utilities Commission (CPUC), opposes the CPUC’s current proposed decision which will approve rate increases for Southwest Gas customers of 12% - 24%,  starting in January 2015, translating to monthly bill increases that range from approximately $10.50 to $13.80. This is far in excess of what is needed to operate a safe gas system.     

  

If approved in its current form the CPUC’s proposed decision will cause a significant rate increase for Southwest Gas residential customers in its Northern and Southern California and South Lake Tahoe divisions. The proposal would approve an excessive 10.1% return on equity equal to that of the nation’s largest gas distribution company, Southern California Gas Company, which has 5.3 million customers, 4,000 miles of transmission lines, and four storage facilities. By contrast, Southwest Gas is a much smaller company with only about 150,000 California residential customers, 15 miles of transmission lines in California, and no storage facilities. Further, Southwest Gas has significantly larger operations in Arizona and Nevada where its authorized return on equity is only 9.5% and 9.2%, respectively. ORA recommended approximately a 1% increase in Southwest Gas overall revenues, and opposed additional surcharges, which would have resulted in a minimal impact on customers’ gas bills.  

  

Comparison of Revenue Increase Proposals  

  

Comparison of Revenue Increase Proposals  

  

ORA recommends a lower revenue requirement that provides Southwest Gas with sufficient revenue to operate and provide service safely and reliably. ORA’s detailed analysis of Southwest Gas’ application shows that the company needs only about $84 million in 2014 to operate its utility service.  

  

ORA Recommended revenue requirement  

  

  

“The CPUC should not authorize unnecessary rate increases that only result in a windfall to Southwest Gas,” said Joe Como, ORA’s acting director. “Commissioners should consider the burden that unwarranted increases have on struggling communities.  Money needs to be spent to make our gas systems safe, but this increase goes far beyond what is needed.”  

  

Commissioners are currently scheduled to vote on whether to approve these proposed changes to customer rates at the CPUC’s April 10, 2014 business meeting. Customers can contact the CPUC to express their opinions on the proposal at public.advisor@cpuc.ca.gov, CPUC Public Advisor, 505 Van Ness Avenue, Room 2103, San Francisco, CA 94102, or (866) 849-8390.   

  

  

See ORA’s webpage on the Southwest Gas Rate Case.  

For more information on ORA, please visit www.ora.ca.gov.