Report: Southwest Gas Rate Hike Bid Included Luxury Expenses

(AP) — The natural gas utility serving Las Vegas and southern Nevada asked state regulators to let it recover from ratepayers costs including a $4,700 wine-and-dine dinner, a luxury car charter and a Las Vegas Strip resort manicure and pedicure, a newspaper found. 

Southwest Gas told the Las Vegas Review-Journal on Wednesday it will remove those expenses and others from its Public Utilities Commission application for a rate increase averaging $4 per month per home. 

“Maintaining the trust of our customers and serving our communities responsibly drives us to operate our gas system safely and efficiently, while keeping natural gas bills one of the lowest utility bills for our customers,” the company said in a statement. It acknowledged “a handful of expenses identified by the parties that should arguably not be recovered in rates.” 

The commission held a rate hearing last week and is expected to issue a draft decision in late September. 

Vegas Golden Knights hockey tickets for board members, first-class airline tickets and a $1,425 charge from a zip line adventuring company in Pennsylvania were among the other expenses that a PUC staff member identified in a July 24 report about the rate hike application filed in May, the Review-Journal reported. 

The company asked the commission to let it charge customers more to cover costs of capital, updated capital investments and costs of a gas company customer data modernization program. 

It also listed a $4,700 dinner tab including more than $1,500 worth of alcohol; $604 to charter a luxury vehicle for two executives in New York City; and board member stays at the Four Seasons in Las Vegas including mini-bar charges, a limousine and a manicure and pedicure at the hotel spa. 

PUC staff member Paul Maguire noted the utility can seek to recover costs related directly to expenditures and investments that go toward providing natural gas services to customers. 

But costs for other types of executive expenditures could be taken out of shareholder profits, he said in his report. 

Regulators flagged similar expenses when Southwest Gas last sought a rate increase in 2018, including dinners, $1,600 massages and a golf club membership, the Review-Journal reported. 

Maguire recommended the commission reduce executive salaries attributable to rate recoveries by 10 percent.  

But he wrote that a 20 percent cut would send a stronger signal “especially when the majority of customers have been either laid off or are facing some kind of financial stress given the current economic crisis occurring because of the COVID-19 pandemic.” 

Publicly traded Southwest Gas Corp. is based in Las Vegas. It serves about 2 million home, business and industrial customers in parts of Arizona, Nevada, and California. 

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