Southwest Gas residential bills in Arizona could rise nearly $5 a month under a rate request filed with state regulators.
Saying its current rates in Arizona don’t cover its costs, Southwest Gas is requesting an overall 8% revenue increase to collect $57 million more annually from ratepayers.
If the rate request is approved as requested, the average Southwest Gas residential bill would increase by about 13%, or by $4.75 a month to $40.91, the company said in a filing with the Arizona Corporation Commission.
Hearings on the rate request are scheduled to begin in February before an administrative law judge in Phoenix who will make a recommendation to the full Corporation Commission.
Southwest Gas says it needs the increase to cover rising costs and recover more than $667 million it has invested in its Arizona system since its last rate case in 2016.
As part of the rate case, Southwest Gas also is seeking approval to recover its costs for an accelerated program of evaluating and replacing a certain type of plastic pipe that has been found to degrade under high temperatures.
In February, Southwest Gas requested additional surcharges totaling $12.7 million annually to pay for programs to replace customer-owned yard gas lines and old steel piping. But the Corporation Commission decided last month to consolidate those requests into Southwest Gas’ general rate case.
The company also is asking to meet up to 3% of its forecast Arizona sales by 2035 with purchases of renewable natural gas, such as biogas from landfills or wastewater treatment plants, and to recover its costs.
That move, which would start at 1% of sales by 2025 and 2% by 2030, would help keep a supply of renewable gas in Arizona, Southwest Gas said.
Renewable natural gas is considered a carbon-neutral fuel and offers even greater benefits when it is produced from organic waste that would otherwise decay and emit methane, a potent greenhouse gas that contributes to global warming, the company said.