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Southwest
Gas
Corporation
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2007 Rate
Case
On August 31, 2007, Southwest Gas
Corporation ("SWG" or "Company") filed an application ("Application") with
the Arizona Corporation Commission ("ACC" or "Commission") requesting a permanent increase in rates. SWG, a Class A utility, is seeking a revenue increase of $50.2
million which will result in a 9.45 percent return on invested
capital. According to the Company's application, the proposed
increase would raise the current average monthly residential bill of
$50.95 by $3.59 per month or approximately 7.05 percent. SWG is
also seeking approval of a Revenue Decoupling Adjustment Provision ("RDAP")
mechanism that will allow the Company to recover lost revenues,
attributed to customer conservation, through SWG's rates. SWG is the largest local distribution company in the state of Arizona, and provides natural gas to customers in Cochise, Gila, Graham, Greenlee, La Paz, Maricopa, Mohave, Pima, Pinal and Yuma counties. Fifty-four percent of Las Vegas-based Southwest Gas
Corporation's
customers are located in Arizona.
On October 1, 2007, ACC Staff issued a Letter of Sufficiency informing SWG that the Company's Application had met the sufficiency requirements of A.A.C. R14-2-103.
On October 16, 2007 RUCO
filed a request for intervention.
On October 23, 2007, the Administrative Law Judge ("ALJ") assigned to hear the case issued a procedural order that established the dates and times for the evidentiary hearing on the matter and sets the dates for filing testimony from the parties to the case.
The evidentiary hearing on SWG's rate request will begin at 10:00 a.m. on Monday, June 16, 2008 at the Commission's Phoenix office at 1200 W. Washington.
On December 6, 2007, ACC Staff filed a request for a change in the procedural schedule to allow for a separate filing date for direct testimony on rate design.
On December 11, 2007, the Administrative Law Judge ("ALJ") assigned to hear the case issued a second procedural order that granted ACC Staff's request.
ACC Staff, RUCO and other intervenors to the case filed written direct testimony on Friday, March 28, 2008. RUCO is recommending the following Revenue Requirement:
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DIRECT TESTIMONY - RECOMMENDED REVENUE REQUIREMENT |
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(A) |
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(B) |
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(C) |
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(D) |
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(E) |
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(F) |
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COMPANY |
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COMPANY |
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RUCO |
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RUCO |
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LINE |
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ORIGINAL |
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COMPANY |
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FAIR |
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ORIGINAL |
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RUCO |
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FAIR |
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NO. |
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DESCRIPTION |
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COST |
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RCND |
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VALUE |
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COST |
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RCND |
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VALUE |
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1 |
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Adjusted Rate Base |
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$ 1,094,790,046 |
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$ 1,843,481,069 |
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$ 1,469,135,558 |
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$ 1,089,321,967 |
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$ 1,837,965,254 |
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$ 1,463,643,611 |
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2 |
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Adjusted Operating Income (Loss) |
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$ 73,180,098 |
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$ 73,180,098 |
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$ 73,180,098 |
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$ 77,394,464 |
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$ 77,394,464 |
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$ 77,394,464 |
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3 |
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Current Rate Of Return (Line 2 / Line 1) |
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6.68% |
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3.97% |
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4.98% |
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7.10% |
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4.21% |
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5.29% |
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4 |
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Required Operating Income (Line 5 X Line 1) |
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$ 103,457,659 |
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$ 103,457,659 |
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$ 103,457,659 |
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$ 96,226,345 |
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$ 96,226,345 |
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$ 96,226,345 |
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