Nevada regulators approve big hike in natural gas prices

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Nevada regulators approve big hike in natural gas prices

ASSOCIATED PRESS June 29th, 2001

The Nevada Public Utilities Commission voted Thursday to approve a $75 million rate hike for Southwest Gas Corp., a move that will raise bills by as much as 35 percent.

The rate hike will take effect in July. In northern Nevada, average residential customers will see bills increase from about $62 to nearly $84 — up 35 percent — and in southern Nevada rates will jump from nearly $36 to nearly $44 — up 21.5 percent.

Southwest Gas has about 96,000 customers in northern Nevada -- 88,000 residential and 8,000 commercial.

The company's service area includes Carson City, Carson Valley, the Nevada side of the Tahoe Basin, Fernley, Fallon, Lovelock, Winnemucca, Battle Mountain and Elko.

Roger Buehrer, Southwest Gas spokesman, said the huge increase is the result of massive increases in the price of wholesale natural gas that peaked last December. Southwest Gas, in effect, is playing catch up, Buehrer said.

“This helps us recover the cost incurred as a result of those (price increases),” Buehrer said. “This brings us into line with current market rates. We don’t anticipate additional increases in the cost of natural gas (for the foreseeable future).”

The increase is the third for Southwest Gas since December 2000. The first increase was a 9.2 percent hike that took effect Dec. 1, and was followed by a 23.8 percent increase one month later.

Southwest gas then requested an even larger increase, an $87.2 million hike that was to have taken effect March 1. But Southwest Gas lowered that request in response to an easing in natural gas rates in the wholesale market.

Natural gas rates have been declining since their peak in December, but still remain twice as high as they were last year, making this rate hike necessary, Southwest Gas officials said.

Commercial customers will face a 22.4 percent increase, while large commercial rates will increase 28.3 percent.

Don Soderberg, chairman of the public utilities commission, said the commission had no choice under the law but to approve Southwest Gas’s request if it found the company’s purchases of wholesale natural gas were made prudently.

“The good news is wholesale prices are going down, so we should see some rate relief in the next few months,” Soderberg said. Because many of Nevada’s power plants run on natural gas, that could also result in rate relief for electricity customers, Soderberg said.

Southern Nevada gas customers, however, may still face yet one more rate increase. Buehrer said Southwest Gas will file for a “general rate” increase within 30 days, to take effect Jan. 1. Buehrer said it is still undecided how much of an increase Southwest Gas will ask for.

http://www.rgj.com/cgi-bin/printstory.cgi?publish_date=20010629&story=993882047 © 2001 Reno Gazette-Journal

-- Martin Thompson (mthom1927@aol.com), June 29, 2001


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