Phoenix, Ariz. – On March 27, 2025, the Arizona Corporation Commission voted unanimously to approve Southwest Gas Corporation’s (SWG) latest rate case application, approving a revenue rate increase that totals approximately $80 million, which is more than 33% less than what the utility had originally asked for.  Additionally, SWG gave the Commission notice that its Gas Cost Balancing Account (GCBA) rate will decrease resulting in an approximate monthly credit of roughly $1.00 for residential customers.  With the combined base rate increase and the GCBA rate decrease, the average single-family residential customer will see a modest combined increase of about $3.60 per month on their utility gas bills.  The new rates are effective immediately.

When SWG filed its rate application in February 2024, it requested a revenue increase of approximately $126 million to recover expenses incurred during the test year, eventually lowering its request to $96 million after negotiations.  The Administrative Law Judge’s Recommended Opinion and Order proposed an even lower revenue increase of approximately $80 million, which eliminated the recovery of more than $5 million in board of director and management incentive fees, among other deductions.  Commissioners also approved several amendments, further cutting costs moving forward that would have been passed on to customers and preventing SWG from excessive and unnecessary capital spending.  Ultimately, the Commission’s actions may impact the monthly bill of the typical-single family residential customer by about $3.60 a month (an approximate 7.5% bill impact increase), increasing the average monthly bill from about $47.00 to about $51.00 a month.

The Commission also directed SWG to prioritize Demand Side Management (DSM) funds that would benefit low-income customers and to submit a new plan that shifts more eligible customers to a low-income rate class. This would increase customers participating in financial assistance programs aimed at helping customers that have fallen behind on their bill payments.

"Natural gas continues to play a critical role in Arizona's economic prosperity and helps ensure we will continue to enjoy some of the most affordable energy rates in the country," said Chair Kevin Thompson. "From terminating the ratepayer-funded COYL program to halting spending of over collected funds from their energy efficiency surcharge, the Commission collectively saved ratepayers millions of dollars while ensuring we upheld constitutional obligations that allow the utility to recover just and reasonable costs associated with investments in serving the citizens across Arizona."

“I was proud to partner with Chair Kevin Thompson to amend the decision that will prevent the company from spending in excess of what they collect through the commission approved monthly surcharge, and directed SWG to prioritize energy-efficiency programs to help low-income families,” said Commissioner Rachel Walden.

The Commission also adopted a new GCBA rate that will increase a monthly bill credit for customers. Natural gas prices have stabilized in the last two years, resulting in an overcollection in SWG’s GCBA balance.  The Commission approved the utility’s proposed total monthly bill credit of approximately $1.87 for the average residential customer which is expected to last through April 2026.

“The Commission analyzes each point within a rate case very carefully to determine whether investments by the utility are “just and prudent,” said Commissioner Lea Márquez-Peterson. “I am proud that we were able to vote to approve a decision that reduced the impact to ratepayers from the original application while ensuring reliable service from Southwest Gas.”

All documents relating to these decisions can be found on the Arizona Corporation Commission’s online docket at https://edocket.azcc.gov and entering docket numbers G-01551A-23-0341 and G-0551A-25-0017.