Southwest Gas customers in Nevada will experience a decrease in their bills starting July 1, following a decision by the Public Utilities Commission of Nevada (PUCN) to adjust rates. This adjustment is designed to recover the costs associated with purchasing natural gas. Customers in Southern Nevada can expect to save approximately $13 per month, while those in Northern Nevada will see savings of over $22 per month.
The rate reduction results from an over-collection of funds, with $196.9 million over-collected in Southern Nevada and $44.2 million in Northern Nevada by the end of the previous quarter on March 31. This over-collection occurred because the Base Energy Tariff Rate (BTER) was set too high. In response, Southwest Gas requested an adjustment to its Deferred Energy Account Adjustment (DEAA) in May.
The DEAA mechanism ensures that utilities only recover the actual costs of fuel and purchased power from ratepayers. If the BTER is set too high, as in this case, customers receive a credit, while a lower BTER would result in the utility collecting the difference.
Utility companies in Nevada do not earn a profit from fuel purchased on behalf of customers. Rates are determined based on the average cost of natural gas over a 12-month period and are adjusted quarterly to reflect market conditions. The recent decrease in natural gas prices, following a peak in early 2023, contributed to the current over-collection and subsequent rate adjustment.
Amy Timperley, senior vice president and chief regulatory officer at Southwest Gas, expressed satisfaction with passing on the benefits of lower natural gas costs to customers sooner than anticipated. The company believes that implementing a larger credit DEAA rate promptly is beneficial for helping customers take advantage of these savings.
