2014 Southwest Gas General Rate Case
In December 2012, Southwest Gas (SWG) filed its
General Rate Case (GRC) Application
requesting to raise its customers' rates for the period from 2014 to 2018
for its 3 jurisdictions:
California Division: Barstow, Victorville, Big Bear, and Needles
California Division: Lake Tahoe North Shore, Truckee plus Northstar Ski
Lake Tahoe District
Southwest Gas requests to increase its revenue
requirement over present levels for its gas operations in 2014:
California: $5.6 million (9%)
California: $3.2 million (21%)
Lake Tahoe: $2.8 million
Revenue Increase Requested: $11.6 million for a total
revenue request of $94.7 million.
SWG requests an increase of 2.95% for each
succeeding year through 2018m as a 10.4% return-on-equity.
Evidentiary Hearings were held at the CPUC August
On February 11, 2014, the CPUC reissued its Proposed
Decision with rate impact tables, largely adopting SWG’s request to increases
rates for its various jurisdictions, effective January 1, 2014:
- Southern California: $5.5 million increase
- Northern California: $3.3 million increase
- South Lake Tahoe: $2.8 million increase
See the comparison Table
of 2014 revenue proposals from parties vs. the CPUC Proposed Decision.
The Proposed Decision would also adopt:
- 10.1% return-on-equity.
- 2.95% annual adjustment for increases for 2015-2018.
- SWG’s requests for distribution, customer accounts, uncollectibles,
injuries and damages, administrative and general, pension and benefits
On April 14, 2014, the CPUC issued an Alternate
Proposed Decision that would award SWG a 10.% return-on-equity and a 55%
equity ratio on its capital structure. However, the alternate proposal will
increase SWG customers' rates in a more moderate manner than the CPUC's original
proposal. See Comparison
Table of customer rate impacts.
On June 12, 2014, the CPUC approved the Alternate
ORA Policy Position
ORA supports ratepayer funding for programs and
projects necessary to ensure safety and reliability. The CPUC's approval of
its Alternate Proposed Decision is more in line with ORA’s analysis,
which showed that it was appropriate to make reductions to SWG’s
request in the areas of distribution, administrative and general, executive
pensions and benefits and tax expenses, along with reductions to net investment
and rate of return (profit margin). The CPUC's final decision will have a more
moderate impact on customers' bills compared with its approval of
SWG's request which would have resulted in double-digit bill increases for
However, ORA disagrees with the CPUC's decision
to inappropriately award SWG with excessive return-on-equity of 10.1% which
will cost customers an unwarranted $2.2 million annually. Additionally,
the CPUC's award of a 55% equity ratio is out of line with SWG's own 2013
Annual Report which shows only a 50.6% equity ratio.
Table of SWG's requests vs. ORA's recommendations.
For an overview of ORA’s analyses, see the Executive
See ORA’s full analysis and potential bill
impacts in its June 3, 2013 Testimony.
See ORA's July 1, 2013 Rebuttal Testimony.
See ORA's February 8, 2013 Protest.
See the Proceeding