Nevada Legislative Package

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Southwest Gas Corporation
R
February 16, 2001
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Southwest Gas CorporationUpdate on
FactorsAffecting Gas Prices

• Storage
• Storage levels continue below recent years
• Deliverability
• Rig count at over 800
• Power generation
• High power demand keeps pressure on prices
• Crude oil
• Futures below 30
• Industry structure
• No recent changes

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Southwest Gas CorporationShort Term Influences

• Capacity allocations on El Paso
• Weather

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Southwest Gas CorporationService
TerritoryArizonaNevada California
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(No Transcript)
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Southwest Gas Corporation

• Customers served
• Arizona 748,000
• Nevada 455,000
• California 124,000
• Total 1,327,000

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Southwest Gas Corporation

• What demand (or load) growth rate are you
  currently experiencing?

• Growth rate exceeds 5/annum

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Southwest Gas Corporation

• What are your load projections for the next two
  years?

• Southwests extreme peak day sales
  
  
  forecast in dekatherms
• Arizona 2001 653,000 2002 685,000
• Total System 2001 1,180,224
  2002 1,238,161

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Southwest Gas Corporation

• What is your projected annual sales for 2001 and
  2002?

• Southwests annual sales forecast in dekatherms
  for the 12-month period ending October of each
  year
  
  
• Arizona 2001 70,567,464
  2002 69,110,180
• Total System 2001 118,550,913
  2002 118,254,078
• Includes increased power plant sales that are
  not forecasted in future years

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Southwest Gas Corporation

• Do you have firm contracts in place to meet
  customer demand?
• YES

• Each year, Southwest Gas holds portfolio
  selection process
• Fixed-price solicitations
• Indexed solicitations

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Southwest Gas Corporation

• Are you making any spot purchases on the
  commodities market to meet local demand?
• YES

• Southwest buys spot supplies in lieu of firm
  contract supplies when those spot purchases
  result in lower gas costs for customers

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Southwest Gas Corporation

• What is the wholesale and retail supply
  availability for Arizona for 2001 and 2002?

• To date, Southwest has been able to enter into
  firm contracts with suppliers to provide adequate
  supplies for our customers
• We do not foresee problems obtaining future
  commodity contracts, however, large numbers of
  natural gas fired generation will create greater
  competition

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Southwest Gas Corporation

• What is the interstate pipeline capacity for
  Arizona for 2001 and 2002?
• Is that capacity going to be sufficient to meet
  the projected needs of both retail and wholesale
  gas consumption?

• Full requirements contracts
• Non-coincidental peaks
• Allows growth
• Staffs support in EPNG rate cases
• May not be able to hold full requirements in next
  EPNG rate case
• Expect capacity expansion will be required to
  meet power plant growth

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Southwest Gas Corporation

• With the new power plants planned or approved for
  Arizona, are there steps that you would take
  today to prepare for future demands on the
  infrastructure?

• With regulatory support, Southwest would purchase
  additional capacity now and hold for future use
  to ensure that a portion of todays remaining
  capacity or a portion of a less expensive
  expansion is available for retail customers

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Southwest Gas Corporation

• What effect, if any, will the cost of natural gas
  have on your supply plan?

• Increase existing price volatility mitigation
• Develop multi-year mitigation program
• Work with Staff to develop plan to ensure retail
  customers have access to interstate capacity

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Questions?
R

February 16, 2001