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ACC To Decide Rate Increase for Southwest Gas Corporation
ACC To Decide Rate Increase for Southwest Gas Corporation

An ACC Administrative Law Judge has issued a recommended opinion and order (ROO) that would authorize Southwest Gas Corporation a rate increase of $33.5 million.  This increase reflects a 10% authorized return on equity. In its application, Southwest had requested an increase of $57 million and 11.25 % return on equity.

Although AIC believes the level of increase proposed in the ROO is at the low end of acceptable rate relief, the amount reflects a reasonable balance for both ratepayers and shareholders.  We are, however, disappointed that the ROO fails to adopt either a revenue decoupling mechanism or a weather normalization adjustor.  Both measures, if enacted by the ACC would lessen the volatility of future rate increases and remove disincentives for Southwest to encourage energy conservation by its customers.  The weather normalization adjustor has the added benefit of lessening the bill impacts for customers during particularly harsh winters.

The ACC will consider and vote on new rates for Southwest Gas on December 19, 2008.

Gary Yaquinto, AIC President