Grand Canyon Times

On March 27, 2025, the Arizona Corporation Commission approved Southwest Gas Corporation's revised rate case application, which involves a revenue rate increase totaling $80 million. This amount is over 33% less than the utility's initial request. Additionally, Southwest Gas Corporation notified the Commission of a decrease in its Gas Cost Balancing Account (GCBA) rate, which results in an approximate $1.00 monthly credit for residential customers. This combined with the base rate increase will result in an average monthly utility gas bill increase of about $3.60 for single-family residential customers. The new rates are effective immediately.

Southwest Gas originally filed its rate application in February 2024, seeking an increase of $126 million to cover incurred expenses during the test year. However, the request was reduced to $96 million following negotiations. The Administrative Law Judge then recommended a further reduced revenue increase of $80 million, which excludes over $5 million in director and management incentive fees and other costs. Commissioners implemented additional amendments to further cut excess costs, preventing unnecessary capital spending. Consequently, the typical single-family residential customer's monthly bill will rise by approximately $3.60, which is a 7.5% increase, bringing the monthly bill from $47.00 to $51.00.

The Commission instructed Southwest Gas to prioritize Demand Side Management (DSM) funds to aid low-income customers and to present a new plan to shift eligible customers to a low-income rate class. This will bolster participation in financial assistance programs for customers behind on payments.

"Natural gas continues to play a critical role in Arizona's economic prosperity and helps ensure we will continue to enjoy some of the most affordable energy rates in the country," remarked Chair Kevin Thompson. "From terminating the ratepayer-funded COYL program to halting spending of over-collected funds from their energy efficiency surcharge, the Commission collectively saved ratepayers millions of dollars while ensuring we upheld constitutional obligations that allow the utility to recover just and reasonable costs associated with investments in serving the citizens across Arizona."

Commissioner Rachel Walden highlighted her collaboration with Chair Thompson, stating, "I was proud to partner with Chair Kevin Thompson to amend the decision that will prevent the company from spending in excess of what they collect through the commission-approved monthly surcharge, and directed SWG to prioritize energy-efficiency programs to help low-income families."

Another adopted measure was a new GCBA rate, which increases a monthly bill credit for customers. With stabilized natural gas prices over the last two years, Southwest Gas's GCBA balance saw an over-collection, leading to an approved total monthly bill credit of about $1.87 for the average residential customer, expected to last through April 2026.

"The Commission analyzes each point within a rate case very carefully to determine whether investments by the utility are “just and prudent,” said Commissioner Lea Márquez-Peterson. “I am proud that we were able to vote to approve a decision that reduced the impact to ratepayers from the original application while ensuring reliable service from Southwest Gas.”

Detailed documents related to these decisions are accessible via the Arizona Corporation Commission’s online docket at https://edocket.azcc.gov using docket numbers G-01551A-23-0341 and G-0551A-25-0017.