Continuing our Investment in Arizona
On December 3, 2021, Southwest Gas Corporation (“SWG”) filed an application with the Arizona Corporation Commission (“ACC”) for a permanent gross revenue increase of $90.7 million or 11.5 percent over current revenues. Under the Company’s proposal, the average residential customer would see an increase of $5.12 per month.
The Company’s proposal reflects its continued investment in Arizona, to support the State’s economic and customer growth. The proposal reflects $711 million in rate base investments the Company has, or will make, since 2019 to ensure the continued provision of safe and reliable service in Arizona Meanwhile, the Company has added more than 61,000 customers. The Company has effectively managed its expenses in line with customer growth:
Over the last five years, the Company’s customer growth in Arizona has increased approximately 9 percent, the same rate of growth of the Company’s expenses. While the level of expenses has increased, the increases are in line with customer growth and are reasonable to recover in the cost of service.
Additional Information
- Under the Company’s proposal, the average residential customer would see an increase of $5.12 per month.
- The Company is proposing to continue its Commission-authorized rate design and basic service charge of $10.70 a month for residential customers.
- The Company is proposing an expansion of the low-income discount, to be a 30% discount year-round as well as increasing eligibility to 250% of the Federal Poverty Level.
- The Company is proposing a Move2Zero program whereby customers can offset their natural gas bill with carbon offsets.
The largest component of your natural gas bill pays for Southwest Gas operating expenses. This includes the costs to provide safe and reliable service, as well as the recovery of the investment in the the Company's natural gas infrastructure in the State.
Southwest Gas has to access the capital markets to provide financing for its natural gas operations, this includes issuance of equity or borrowing (debt).
The third largest component of your gas bill is related to the cost of Southwest Gas to purchase natural gas on behalf of its Arizona customers.
Under the Company’s proposal, the average residential bill will increase by approximately $5.12 a month to $49.40.
When compared with other residential utilities, Arizona customers will continue to enjoy lower natural gas bills, ensuring that natural gas remains an affordable energy option for Arizona customers.
Frequently Asked Questions
How will this proposal affect my bill?
Under the proposed increase, we estimate that the average residential customer that uses 24 therms per month will experience an increase of approximately $5.12 a month.
When will I see this change on my bill?
The Company’s proposal will be thoroughly reviewed by the Arizona Corporation Commission, Commission Staff, and other stakeholders. The earliest new rates would be in place would be December 2022.
Why does Southwest Gas need to adjust my rates?
To start recovering the costs associated with the Company’s investment of $711 million in Arizona since 2019 and to update authorized rates so that they reflect changes in the level of operating expenses.
When was the last time Southwest Gas requested a base rate adjustment in Arizona?
In May 2019.
How much has Southwest Gas invested in its Arizona distribution system since the last rate case?
We have invested, or plan to invest, approximately $711 million in rate base in the Arizona gas distribution system since the last rate case.
1Southwest Gas: Estimated Average Arizona Residential Bill
*Move.org Utility Bills 101: Utilities Tips, Average Costs, Fees, and More: https://www.move.org/utility-bills-101/#Average_Utility_Costs_by_State
