Arizona consumers are contesting a proposed $90 million Southwest Gas rate increase that analysts say would only benefit future – but not current – customers.
Its application to the Arizona Corporation Commission seeks to raise rates for natural gas customers by 11.5% to pay for increased profits, fund carbon offsets to reduce greenhouse gases, recover trade association dues, and recoup late-payment charges waived during the pandemic.
Keriann Conroy, research associate with the watchdog group Energy and Policy Institute, said the utility’s two million Arizona customers can’t afford another rate hike.
“Asking customers to foot the bill to build the customer base of Southwest Gas to folks who currently don’t have gas,” said Conroy, “which should not be the responsibility of the customers, and absolutely goes against greenhouse gas emission goals.”
Southwest is asking for a 9.9% built-in return on equity, up from 9.1% granted in 2020.
Arizona regulators are recommending a rate of 9.3%. Nevada regulators rejected a similar rate request from Southwest earlier this year.
Conroy said that in the current economic climate, raising natural gas rates doesn’t make any sense.
“In Arizona, the state is still recovering from the ongoing pandemic and we’re at record inflation, and customers are already struggling to pay their utility bills,” said Conroy, “And so now, to see such a high rate increase can have a really negative impact.”
Conroy noted that the Southwest Energy Efficiency Project, an intervenor in the case, claims Southwest Gas has never committed to specific goals for greenhouse gas reductions and is concerned about the lack of accountability in the utility’s proposal.
“As of now, all the letters at the Arizona Corporation Commission from customers have been in opposition, and there have been many of them,” said Conroy, “So, customers are very much engaged and they don’t want to see this rate increase happen.”
Conroy expects a ruling by year’s end or in early 2023.
Disclosure: Energy & Policy Institute contributes to our fund for reporting on Energy Policy, Environment, Environmental Justice, Toxics. If you would like to help support news in the public interest, click here.
Southwest Gas requesting another large rate increase in Arizona the Energy & Policy Institute 7/7/22
…APPLICATION OF SOUTHWEST GAS CORPORATION FOR THE ESTABLISHMENT OF JUST AND REASONABLE RATES AND CHARGES… ARIZONA CORPORATION COMMISSION 3/8/22