The Public Utilities Commission of Nevada held a consumer session at Mesquite City Hall on Feb. 28 to gather public comments on the application by Southwest Gas proposing a plan to finance the extension of natural gas pipelines to Mesquite. Commissioner Bruce Breslow of PUCN opened the meeting by clarifying that the meeting was not a decision-making session.
He urged speakers to provide quantifiable financial data in their statements.
Natural gas service is not currently available to the city, in large part due to prior public utility policy that required up-front financing for extending existing lines. The huge price tag for bringing gas from the Kern River pipeline that angles across the Mormon Mesa area 15 miles north and west of Mesquite has been the deterrent to gas hookup during Mesquite’s huge growth spurts since the 1990s.
In 2015, Nevada passed SB 151, allowing utilities to propose alternative cost recovery methods to finance projects, possibly extending recovery costs over a number of years and spreading costs among all users in a region. The Southwest Gas proposal is the first application submitted to the PUCN requesting authorization for such a cost recovery plan. They estimate they will serve about 780 Mesquite customers within five years, including 31 commercial customers and 150 new construction homes per year.
According to SW Gas documents, estimated cost for infrastructure needed to serve the city is about $30 million. They calculated a cost recovery plan that would levy two special rates. The proposed SB 151 rate applies to all gas users in southern Nevada.
A proposed Mesquite Area Expansion Charge applies only to customers in the expanded service territory in Mesquite. The charge applicable to all Southern Nevada customers would increase monthly bills system-wide from a low of .06 percent for some residential users, to as high as 4.0 percent for large commercial users. That surcharge would yield about $3 million a year in revenues to SW Gas.
Residential users in Mesquite would additionally pay $23.80 per month and commercial users would pay a basic rate plus volumetric rate for gas used. Anticipated revenues from Mesquite area customers in its first year of operation are about $839,000, or 0.3 percent of the SW Gas total revenue. SW Gas estimates the MAEC will be necessary for a period of 15 years.
SW Gas provided a table of estimated monthly bills for prospective Mesquite customers under each rate schedule. Based on the company’s proposal, it showed an average monthly bill for single-family residence gas service as $60.38, which includes the two special SB 151 and MAEC levies. Multi-family residential service would average $39.00. Those figures rise dramatically if gas were to be used to power air conditioning.
The average cost of this special class of user runs $389.81 per month. Monthly gas service for businesses in Mesquite is shown ranging from $162 for small businesses to nearly $4,000 for the larger businesses present in the city, not including air conditioning, water pumping, and other services.
Mayor Al Litman led off the comment session by affirming support of the idea of bringing natural gas to the city. City councilmen David Ballweg and Geno Withelder confirmed the city’s position, with Withelder reading a resolution passed by the city council backing the SW Gas application to bring service to the city. City public works director Bill Tanner referenced cost savings the city would realize in heating and cooling some city facilities with natural gas.
Business and civic leaders George Gault, David Blackburn, Jeff Powell, Phil Crapo, Courtney Sweetin and others outlined the loss of at least 60 desirable businesses that declined to locate in the city because their manufacturing or business processes needed natural gas to keep costs down. Gault gave an example of a business that wanted to come to Mesquite in 2012 but was discouraged by the 5 to 1 cost ratio for using propane in Mesquite compared to natural gas that was available in their current location in California. He stated that business might still relocate to Mesquite if gas service were obtained.
Gary Elgort was the lone speaker stating opposition to bringing natural gas to the city. He was formerly a senior engineer with Consolidated Edison, with years of experience in utilities. He voiced concern about greenhouse gases and sees safety and environmental issues in bringing gas from the Kern River pipeline.
He questioned the cost effectiveness of gas, as compared to the relatively cheap electrical power of the city. In his view, installing gas on top of the cost of electricity, would raise overall utility bills. He also raised concerns for the adequate supply of water available to the city when water-consuming businesses locate here.
Elgort pressed for answers concerning the total cost of gas hookup for existing homeowners and asked about hidden costs for non-users. Gas representatives could not provide specifics on total homeowner costs for gas hookup due to variables in individual locations. They did state, however, that non-users do not pay for the gas system.
Interested persons who wish to submit written comments concerning the PUCN application may do so by emailing email@example.com, referencing Docket #17-11008, Mesquite Area Expansion Charge. A hearing on this Docket will be held Tuesday, April 3, 9 a.m. at the PUCN Hearing Room, 9075 W. Diablo Dr., Suite 250, Las Vegas.