CARSON CITY -- The state Public Utilities Commission today approved a request by Southwest Gas Corp. to raise residential rates in Clark County by almost 24 percent.
The 23.8 percent increase, which will take effect Monday, will mean an additional $7 per month for each natural gas customer and will raise an additional $36.4 million for the company.
In addition, the commission also allowed Nevada Power Co. to boost its rates by about 1 percent in the Las Vegas area.
Both rates are going up to offset the higher cost of fuel the utilities are buying and do not represent increased profits.
Southwest Gas originally asked for $47 million in higher rates, but that was lowered by $10.6 million. State Consumer Advocate Tim Hay said an examination of the application showed the utility had excess gas that should not be counted against the users in Southern Nevada.
Southwest Gas Vice President Roger Montgomery said, "Natural gas prices have skyrocketed this winter.
"The average commodity cost of gas included in the rates approved by the commission today is less than $4 per decatherm (10 therms), based on Southwest's actual costs through September." He said the cost of gas has climbed by more than $6 per decatherm in recent weeks.
The commission also approved Southwest Gas' application to raise natural gas rates in Northern Nevada by more than 20 percent. The utility serves more than 500,000 homes and businesses in Nevada.
The commission permitted Sierra Pacific Power Co. of Reno to boost its natural gas rates by more than 20 percent in Washoe County and its electric rates by 1 percent in Northern Nevada.
Commissioner Richard McIntire said, "Nobody likes to approve rate increases," but he said this was the right thing to do to avoid the problems being experienced in California.
"This is a heck of a lot better than not knowing if we have heat or lights," he said.
Commission Chairman Don Soderberg said by handling these requests expeditiously, "astronomical interest charges" will not accrue to the ratepayers as they would if action had been delayed until this summer.
"I don't want to pay interest charge in June for my use in the winter," he said.
Soderberg said natural gas prices won't go down until there is new exploration and an increased supply for natural gas. He said it would be wise for consumers to start a conservation program to soften the effect of big rate increases.
He praised Hay's office for its conservation program and said the PUC staff would help in promoting this project.
Commission staff said that Nevada Power paid 76 percent more this September for its fuel than a year ago.
McIntire said there was a lot of talk in the past that Nevada Power was in tough financial straits. "We're not hearing that much now," he said, adding k the so-called "global settlement," which permits period electric increases for Nevada Power has helped the company.
Commission members said Nevada Power still had financial problems but so does every utility in the West.
The commission also gave approval for Naniwa Energy LLC. to build a power plant in Storey County.
Soderberg praised the staff for processing the application in two months instead of the allowed five months. He said other state agencies are also giving speedy treatment so the plant can be running by the summer.
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