© 2025 THE COOL DOWN COMPANY. All Rights Reserved. Do not sell or share my personal information. Reach us at hello@thecooldown.com.
“Formula rate plans have resulted in large rate increases with very few rate decreases.”
Photo Credit: iStock
Arizona Southwest Gas customers could face another increase. The utility has asked state regulators to approve a $101 million hike that would raise residential bills by almost 10.5%, according to the Energy and Policy Institute. 
The request follows the Arizona Corporation Commission’s approval of a 7.5% increase.
In the same filing, Southwest Gas seeks to raise its authorized return on equity from the 9.47% the commission approved in 2025 to 10.25%.
Because Southwest Gas hasn’t had an Arizona rate case since the Arizona Corporation Commission adopted its 2024 policy statement on formula rates, the company is now asking to use that mechanism. 
With energy prices through the roof, there’s never been a better time to go solar — and EasyHome can help you find the best prices from the best installers in your area.
EasyHome takes the guesswork and headaches out of energy upgrades by showing you estimated savings from a network of vetted local partners. To get started, just enter your ZIP and share a few details about your home — seeing your estimate is really that easy.
Consumer advocates argue the approach could allow rates to change more often between major rate cases while reducing oversight.
“A formula rate plan uses a pre-approved formula to adjust base rates between general rate cases, usually on an annual basis,” the Residential Utility Consumer Office said in testimony.
RUCO also held that Southwest Gas should receive a 9.2% return on equity if formula rates are approved, arguing that the system would reduce the company’s risk by giving it “guaranteed revenues and income” and more predictable cost recovery.
For homeowners worried about rising utility bills, going solar is one of the best ways to save money on home energy. EnergySage offers free solar installation estimates and quote comparisons to streamline the process.
A wider Arizona dispute over formula rates is also shaping this case. 
RUCO is among the plaintiffs challenging the commission’s policy statement, arguing that it adopted the policy through a policy statement rather than formal rulemaking and therefore bypassed stakeholder input, impact studies, and public comment.
Then-Chairman Jim O’Connor said the policy drew opposition in more than 600 comments, while Commissioner Kevin Thompson dismissed critics’ concerns as “alarmism.” 
“It’s part of the misconceptions that media and other people are feeding into that they just don’t understand,” Thompson alleged.
💡Go deep on the latest news and trends shaping the residential solar landscape
RUCO also urged regulators to remove at least part of Southwest Gas’ dues to the American Gas Association and Western States and Tribal Nations from customer charges, citing advocacy for expanded gas use.
Coal and natural gas power plants contribute to air and water pollution linked to asthma, heart disease, cancer, and premature death. 
They keep household energy costs elevated for families that remain dependent on those fuels instead of more abundant energy sources such as wind and sunlight, while industry lobbying slows cleaner, cheaper energy solutions that would better protect families and lower costs.
RUCO and ACC staff also raised concerns about other costs Southwest Gas wants customers to absorb, including 56% of board expenses totaling $1,864,765, $400,000 in rate case expenses, and $565,061 in employee meal costs. 
In Nevada, the company faced scrutiny for trying to pass on costs for luxury hotels, alcohol, limo rides, and a $5,088 dinner attended by 13 guests for former President and CEO Karen Haller.
Consumer advocates are challenging the proposal directly in the case. 
RUCO recommended removing 100% of board fees from rates and argued that requiring customers to pay a return on the company’s own rate-case spending would “unfairly enrich shareholders.” 
ACC staff similarly said some executive perks are “beyond the normal compensation paid to employees.” Regulators and advocates in other states are also scrutinizing fast-tracked gas infrastructure spending. 
Southwest Gas wants to raise the annual cap on its Arizona system integrity mechanism from $50 million to $100 million, but a Future of Heat Initiative report found gas distribution spending climbed 200% over 15 years without measurable safety improvement. 
In Massachusetts, the Department of Public Utilities lowered a similar spending cap in 2025 to prioritize leak repair over full pipe replacement.
If higher gas costs are pushing you to look at alternatives, EnergySage is especially useful. It can help the average person save up to $10,000 on solar purchases and installations. 
EnergySage’s solar map shows the average cost of a home solar panel system by state, along with state-specific solar panel incentives; together, these resources get homeowners the best price on rooftop solar panels and allow them to take advantage of all available incentives. 
Adding battery storage to a solar setup is one of the best ways to protect your home during outages, save money on energy, and go off-grid. EnergySage provides information on home battery storage options and competitive installation estimates.
With Southwest Gas rebuttal testimony due Nov. 2 and intervenor responses due Nov. 20, ACC staff witness Michael Deupree of Acadian Consulting Group cited one of the central concerns.
“Formula rate plans have resulted in large rate increases with very few rate decreases and no measurable improvement in reliability of service.”
These stories show how utility decisions in several states affect what customers pay. They cover Arizona efficiency rollbacks, utility cost-recovery fights, and surging power bills.
• Arizona regulators gutted energy efficiency standards that had saved ratepayers $1.7 billion.
• In Oregon, lawmakers weighed major changes to how utilities operate as bills rise.
• PacifiCorp sought approval to bill customers for $1.7 billion in wildfire damages.
• In Missouri, cities fought pollution, then watched their power bills soar 191%.
Get TCD’s free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.
© 2025 THE COOL DOWN COMPANY. All Rights Reserved. Do not sell or share my personal information. Reach us at hello@thecooldown.com.

source