Utility files to reduce rates

Residential customers in Southern Nevada will get a $2 break on their monthly natural gas bills beginning Aug. 1 if state regulators approve an 8 percent annual decrease proposal filed Tuesday by Southwest Gas Corp.

Southwest Gas is asking regulators to reduce the typical residential customer's summer bill by $2.06 to $29.68 for about 2,000 cubic feet of gas because the price the utility pays for the fuel has declined.

The typical winter bill in Southern Nevada would drop $6.80 to $77.53. That would buy 6,600 cubic feet of gas.

"Any decrease is going to help the seniors," said Lucy Peres, president of the Nevada Silver Haired Legislative Forum.

"If it's $2 or $7, that's going to make a difference of whether they can buy a quart of milk," Peres said, referring to low-income senior citizens.

One consumer, John Stanhagen, a retired Air Force colonel, said saving $7 a month wasn't that important to him.

"Would I rather spend it on dinner? Yeah. But it's not significant," Stanhagen said.

Southwest Gas rates have been reasonable, Stanhagen said, but he recommended Southwest Gas do more to help people in older houses evaluate the cost savings of energy conservation measures.

He moved into a new well-insulated 2,400-square-foot house in December 2005 and said he pays about $70 a month year-round.

Nevertheless, state Consumer Advocate Eric Witkoski said, "It's welcome really to see at least some reduction in the rates."

The rate-change application that Southwest Gas filed Tuesday is made each year to compensate for collecting too much or too little to pay for gas. However, analysts said the decrease in rates was tied to a new requirement that Southwest Gas make quarterly changes in rates to reflect gas prices.

Kristy Wahl, a spokeswoman for the Public Utilities Commission, said the rate reduction is a "direct benefit" from making quarterly adjustments as approved by the Legislature in 2005.

The quarterly changes reduce the build up a large balances owed to the utility for past gas expenses.

In past years, rates often swung dramatically when Southwest Gas did not recover enough through rates and thus was entitled to recover the money through later rates which also include interest payments to the utility.

Under a pending bill, Nevada Power Co. also would be required to make quarterly adjustments in rates to reflect changes in the price it pays for wholesale power and fuel used in electrical generation plants.

"The quarterly adjustments show we can get reduced costs for ratepayers," Witkoski said. "We can get even more substantial savings if we do (quarterly adjustments) for electricity,"

The gas distribution company has built up a positive balance by which customer payments have exceeded gas expenses, but the company has decided not to return the surplus to customers now.

"It prevents a yo-yo effect in the rates," Southwest Gas spokeswoman Cynthia Messina said. "(This approach) will smooth out the rates so that customers don't experience a lot of instability (in rates)."

In Northern Nevada, Southwest Gas proposes to decrease rates by 6.11 percent.