Continuing our Investment in Arizona
On December 3, 2021, Southwest Gas Corporation (“SWG”) filed an application for a permanent gross revenue increase with the Arizona Corporation Commission (“ACC”). After careful consideration of SWG's filing and the positions of the other parties in the case, the ACC authorized an increase of approximately $54.3 million, effective February 1, 2023. The increase is equivalent to a monthly bill increase of $2.94 (or 6.64%) for an average residential customer using 24 therms. Actual bills may be higher or lower than this amount, depending on usage and other rate adjustments.
The Company's activities reflect its continued investment in Arizona, to support the State's economic and customer growth. The results of the rate case support the $677 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.
- The average residential customer will see an estimated increase of $2.94 per month.
- The Company is continuing its Commission-authorized rate design and basic service charge of $10.70 per month for residential customers.
- The Company is expanding the low-income discount to be a 30% discount year-round for all therm usage as well as increasing eligibility to 250% of the Federal Poverty Level. This discount also reduces the basic service charge.
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 second largest component of your gas bill is related to the cost of Southwest Gas to purchase natural gas on behalf of its Arizona customers. Southwest Gas does not earn a profit on the cost of gas. Rather, the cost of Southwest Gas to purchase natural gas is passed directly to customers without any markup or profit added.
Low Income Ratepayer Assistance (LIRA)
Customer-Owned Yard Line (COYL) Program
You may be eligible to participate in our COYL leak inspection and replacement program. The COYL program is another way we can help keep your family, property and neighborhood safe. Call 800-654-2765 to see if your property qualities for a free line leak inspection.
Regulatory Expense Surcharge
Effective March 1, 2023, a Regulatory Expense Surcharge will collect the rate case expense up to $400,000 incurred in the 2021 Arizona General Rate Case. The balance will be recovered over a 48-month period. It will apply to Arizona customers only. The surcharge is $0.01 per customer and will appear as a line item on the bill.
The average residential bill will increase by approximately $2.94 a month to $47.22 or approxiately $48.
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 affect my bill?
Under the approved increase, we estimate that the average residential customer that uses 24 therms per month will experience an increase of approximately $2.94 a month.
When will I see this change on my bill?
The new rates are effective February 1, 2023. Billing periods differ, so some customers will see new rates in February and others in March 2023.
Why does Southwest Gas need to adjust my rates?
To start recovering the costs associated with the Company’s investment of $677 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 $677 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
