Gas Company Proposes New Residential Rate Structure to Separate Fixed
Operating Costs From Cold Weather Usage
LAS VEGAS, Dec. 9 /PRNewswire-FirstCall/ -- Southwest Gas Corporation
(NYSE: SWX) has filed a request with the Arizona Corporation Commission
(Commission) to increase its authorized operating revenues by $70.8 million.
The request also includes proposals to mitigate the impact on residential
customers when the weather is cold. Southwest's last general rate case was
based on operating costs experienced in 1999. Southwest serves approximately
872,000 homes and businesses in Arizona.
If approved by the Commission, an average residential bill of $37.35 for
29 therms would increase by $5.77 to $43.12. For residential customers on
Southwest's low income rate assistance program, an average bill of $31.79
would increase by only $1.37 to $33.16. The Company has requested a decision
from the Commission by November 1, 2005.
The request is a result of increases in fixed operating costs and a rate
structure that has hindered Southwest's ability to earn the return authorized
by the Commission. The Company is asking the Commission to restructure
residential rates to separate or 'decouple' the recovery of fixed operating
costs from the volume of gas it sells. The Company has also proposed revising
rates to shift a substantial portion of its fixed operating costs away from
cold weather consumption. Customers would benefit because they would pay a
lower bill than they would otherwise pay during periods of cold weather when
consumption is highest.
Southwest is proposing a variety of new and expanded conservation and
energy efficiency programs. In addition, the Company is asking for a
mechanism to ensure that it would recover its fixed operating costs as
consumption declines due to conservation efforts. The mechanism would also
protect customers by crediting their bills if consumption increases and the
Company collects more than was authorized by the Commission.
The separation of fixed operating cost recovery from the amount of gas
customers consume has been endorsed by the National Association of Regulatory
Utility Commissioners (NARUC). The Natural Resources Defense Fund, a major
proponent of energy conservation, has also endorsed the concept as an
incentive for natural gas companies to aggressively promote conservation.
Southwest Gas Corporation provides natural gas service to approximately
1,579,000 customers in Arizona, Nevada and California. Its service territory
is centered in the fastest-growing region of the country.
This press release may contain statements which constitute "forward-
looking statements" within the meaning of the Securities Litigation Reform Act
of 1995 (Reform Act). All such forward-looking statements are intended to be
subject to the safe harbor protection provided by the Reform Act. A number of
important factors affecting the business and financial results of the Company
could cause actual results to differ materially from those stated in the
forward-looking statements. These factors include, but are not limited to,
the impact of weather variations on customer usage, customer growth rates,
changes in natural gas prices, the ability to recover costs through the PGA
mechanism, the effects of regulation/deregulation, the timing and amount of
rate relief, changes in rate design, changes in gas procurement practices,
changes in capital requirements and funding, resolution of pending litigation,
the impact of conditions in the capital markets on financing costs, changes in
construction expenditures and financing, changes in operations and maintenance
expenses, future liability claims, changes in pipeline capacity for the
transportation of gas and related costs, acquisitions and management's plans
related thereto, competition, and the ability to raise capital in external
financings.
SOURCE Southwest Gas Corporation
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Related links:
http://www.swgas.com
CONTACT:
Media, Roger Buehrer, +1-702-876-7132, or
Shareholders, Ken Kenny, +1-702-876-7237, both of Southwest Gas
Corporation
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