(LAS VEGAS CBS KXNT) Soutwest Gas customers didn’t take kindly on Thursday to a proposed rate hike. The company is preparing to make its case for a 6.15 percent increase in Southern Nevada effective November 1, 2012.
The current retail rates are not producing a fair and reasonable return on investment, according to a document filed with the Public Utilities Commission. The company seeks an additional $25.4 million in Southern Nevada, adding an average of $3.76 to the average monthly residential bill.
A hearing on Thursday evening drew several dozen people, including a representative from the AARP, who objected to an additional surcharge being sought by Southwest.
The Gas Infrastructure Replacement charge is popping up in jurisdictions across the nation, said Barry Gold. He noted that it could end up costing more than the rate increase.
“It’s unnecessary and not beneficial to rate payers,” Gold testified, accusing the utility of getting an interest-free loan and shifting risk from investors to consumers. The surcharge is not scrutinized as closely as a rate increase, Gold told KXNT. The utility estimates the cost of capital expenses, and charges the consumer in advance, with a rebate coming only after the actual cost of the investment is known.
Southwest describes the GIR as a mechanism that allows the utility to recover non-revenue-producing infrastructure between rate increases.
Jonathan Friedrich, a retiree, lashed out at all the utilities for rate increases imposed this year. He said retirees are “under siege,” and estimated his own increased expenses from all sources including water, power, cable, property taxes, and now gas will be about $100 per month.
Southwest representatives did not comment, except say that falling natural gas prices may soften the impact, and to reiterate the operational expenses that have prompted the request, including accelerated pipe replacement.
The formal rate hearing is scheduled for September 10-14.