Southwest Gas under investigation by state
The California Public Utilities Commission has begun an investigation into Southwest Gas Company’s natural gas procurement practices.
Procurement practices include the mix of gas bought at long-term contractual prices and gas bought at the “spot” market prices to meet customer needs.
According to PUC spokeswoman Carol E. Robinson, the investigation seeks to determine what “mix Southwest Gas used, what mix is best, (and) what could/should have been done when gas rates skyrocketed.”
According to a flier included with recent Southwest Gas bills, an investigation was initiated by the PUC in June after it received an “usually high number of inquiries and petitions” from customers regarding the company’s high gas prices.
Southwest Gas spokesman Roger Buehrer said the investigation was looking into “whether or not we did everything we could to mitigate our gas prices.”
He added Southwest Gas has no incentive to raise its prices because it passes on the entire cost of the increase to customers.
Southwest Gas residential rates in Truckee jumped from $1.29 per therm in December to $1.76 in February.
A spokesman at the Southwest Gas office in Truckee said rates before December were unavailable.
“The increases (in gas prices) are a direct pass through to the customer the company doesn’t make any money on the cost of gas. We make money on the service, the transportation and distribution we provide,” Buehrer said.
Southwest Gas has provided the PUC with a 60-page report explaining the company’s gas prices last winter and steps Southwest Gas has taken to lower prices.
Buehrer said the majority of the complaints came from customers in the high desert area of San Bernardino County and were a result of the nationwide “run up of gas prices last winter.”
Southwest Gas buys their gas from Southern California Gas Co., which in turn is a customer of El Paso Gas.
The PUC filed suit against El Paso last year.
Southwest Gas, an investor-owned utility with more than 1.3 million customers, has approximately 120,000 customers in California. Most of the customers in California live in the Big Bear Lake area and the high desert communities of Barstow and Victorville.
Buehrer estimated that there were 8,000 Southwest Gas customers in the Truckee and Lake Tahoe region.
According to an article in the San Bernardino County Sun, the investigation will likely lead to one of three outcomes: no action by the PUC, sanctions by the PUC (including possible refunds to customers) or identifying steps Southwest Gas can take to avoid future rate increases.
A similar investigation conducted earlier this year by the PUC of Nevada cleared Southwest Gas of any wrongdoing in regards to its procurement practices.