Las Vegas gas rate increase comes late

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By Lee Einer

The city is supposed to calculate its natural gas rate every month, taking into account such factors as the cost of gas.

But an increase in the cost of gas in October didn’t get processed until two months later. And this meant a loss in revenue for the city’s natural gas utility, an official said.               

The Optic recently published a press release from the city of Las Vegas, which announced that the city utility’s natural gas rates to residential customers were raised effective Jan. 1 because of an increase in the cost of gas.

The city’s  press release was more notable for what it did not tell its customers: Neither the old rate, the new rate, nor the amount of  its supplier’s price hike were disclosed.

Also not mentioned was the apparent delay in implementing the price change. The rate increase is the same one that was originally announced by city officials during the Oct. 1 City Council meeting and published in the Oct. 5 edition of the Optic.  

George Du Four, the city’s utilities director, said the paperwork for the rate increase was submitted to City Hall in October, but wasn’t acted upon promptly.

“This thing was languishing in the dark hole of the city manager’s office for two months,” Du Four said. “We sent it over in October, and I don’t know where it went. I kept asking and kept asking, and that was part of the frustration where my blood pressure went off the frigging wall.”

Du Four commented to the Optic a day before being placed on unpaid leave last Friday by Las Vegas Mayor Tony Marquez.

Marquez said that the rate increase should have been done automatically by the utilities department without the involvement of the City Council or others. Marquez said he could not say why the utilities department did not take action and that he would take action so that the problem does not recur. “There seems to be a breakdown in communication,” Marquez said.

Mercedes Fernandez-Wells, spokeswoman for Zia Natural Gas, the city’s gas supplier, said the city’s rates were raised on Oct. 1 from $7.24 per thousand cubic feet, or MCF, to $8.05 per MCF, an increase of 81 cents per unit.

The city’s price increase to residential customers announced in October and implemented Jan. 1 was for a total of 89 cents per unit. The city  raised the cost of service charge 13 cents,  from $2.77 to $2.90 per MCF (an adjustment reflecting a rise in the consumer price index) and raised the cost of gas charge 76 cents from $6.30 to $7.06 per MCF.

The news for city gas customers was not all bad. Although Zia’s rate hike has been passed on to customers, the amount of the city’s rate hike was lessened because of the city utility’s having reduced line loss from 11.3 percent in 2008 to 8.8 percent in 2009.

While city gas customers do not get a benefit from gas lost to line leaks, the city still must pay for gas lost to leakage,  so a reduction in line loss means savings which are passed on to customers under the city’s gas rate ordinance.