Southwest Gas wants to charge Arizona customers an additional $5 a month to offset $710 million in capital investments.
The single family residential basic service charge is proposed to remain at the current rate of $10.70.
In a filing with the Arizona Corporation Commission in December, Southwest Gas proposed an increase in their delivery fee of about 22 cents, bringing the cost to an average customer to the $5 mark.
With this rate increase, company officials argue average bills for natural gas service in Arizona would still be among the lowest bills customers have for the provision of a utility service.
Diane E. Brown, executive director of the Arizona Public Interest Research Group Education Fund, told KAWC customers should not be on the hook for the 11.4 percent rate hike.
“Many southwest gas customers are still hurting from COVID, from inflation, from the economy,” Brown said, “and the utility is asking its customers to pay more while its shareholders will be earning more.
The hike would pay $664,596 in 2021 membership dues for the American Gas Association, and provide monies for line-extension allowance, she said.
Such a transfer of responsibility forces customers to pick up the tab when developers want to extend gas lines to residential and commercial properties, Brown said.
Shareholders, not ratepayers, should pay for such membership dues, she said, adding developers should pay their own way.
“Gas utilities are having the amount of money on a percentage basis that shareholders can receive decrease and, instead, Southwest Gas is trying to increase the percentage of what their shareholders would receive.”
Southwest Gas also is proposing a change to the Low-Income Rate Assistance Program (LIRA). The proposal would allow residential customers with a household income up to 250 percent of the Federal Poverty Level (FPL) to participate.
Currently, the program is capped at 200 percent of FPL.
In 2022, the FPL is $1,133 a month for a single person, and $1,526 a month for a married couple.
“Certainly, it is important that customers have the ability to pay their bills,” Brown said, “and, if they don't, that financial assistance is provided. However, having reduced rates and reduced fees is more likely to help customers to pay their bills in the first place.”
Southwest Gas also proposes to enhance LIRA by providing a 30% reduction in year-round fees, instead of only bills during winter months.
It is expected such an enhancement would cause the LIRA adjustment to increase by approximately $1 .6 million per year.
Chris McDaniel can be reached at christopher.mcdaniel@azwestern.edu or 928-317-6077.