Home Residential Services Resource Center Understanding Your Bill Arizona Bills & Gas Prices FAQ
What You Need to Know
There are three main factors that could be affecting your bill this season:
- Changes in usage
- Changes in the cost of gas
- Changes in the delivery charge
If your usage is similar to previous years but your bill has increased, the difference is most likely due to the change in the delivery charge and cost of gas.
Year-over-year, increases in our gas costs have resulted in an increase in the cost of gas customers pay by 51%. We purchase gas on your behalf, and your cost of gas recovers the actual purchase gas cost we made.
To protect our customers from experiencing dramatic changes in gas costs, our regulators allow price changes to adjust monthly and reflect an average of gas costs over a 12-month period of time. This design means that it takes time to pay off higher balances of gas costs. We have some good news, gas costs have stabilized and are lower this year, and we are projecting that these amounts will start to be reflected in customer bills by the end of the year.
The delivery charge (the cost of providing safe and reliable service) was adjusted in February 2023 and reflects the cost of operating the natural gas utility in Arizona and recovering our investment in the natural gas distribution system in the state. This rate only changes as a result of a base rate increase, which is scrutinized and approved by our regulator, and occurs approximately every two years.
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If you find yourself in need of aid to cover utility bills or are seeking more effective ways to manage your budget, we're
here to help
Learn more about changes in residential natural gas pricing history at U.S. Energy Information Administration.
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View historical gas costs and average bills for Arizona in the charts below.
Arizona Average Bill
The Delivery Charge and the Gas Cost comparison for the average single-family residential monthly bill in Arizona from 2012-2024. The Delivery Charge has remained stable while the Gas Cost has fluctuated over the last 12 years.
Historical And Projected Gas Cost
The trend of gas costs from January 2021 and the projected future costs through November 2025; reflecting the price Southwest Gas paid, which is passed on to our customers.
Purchased/Monthly Cost Comparison
The monthly price of gas paid by Southwest Gas from January 2017 through Present and the associated adjusted monthly gas cost rate recovered by customers.
We hope this helps explain what can be a very complicated process and helps provide you with information to better understand what could be affecting the fluctuations you see on your bill.
Understanding Your Bill
Why has my bill increased compared to last year?
There are three main factors that could be affecting your bill this season: changes in usage, changes in the cost of gas, and changes in the delivery charge.
Your usage can depend on several factors. Wintertime and cooler temperatures will be a primary contributor to increased usage–things like your thermostat setting, number of family members of guests in your home, increased water heater usage, or use of natural gas appliances such as fireplaces or pool heaters. Your home's energy efficiency is another factor. Leaks and cracks around windows and doors may contribute to increased gas usage to maintain your home's comfortable temperature.
If your usage is similar but your bill has increased, the difference is most likely the change in the cost of gas and the change in the delivery charge. The price of natural gas, like other commodities, is affected by supply and demand. We purchase gas on behalf of our customers – your cost of gas recovers the actual purchase gas cost we made, with no markup or profit to the Company. The gas cost adjusts monthly and reflects an average of gas costs over a 12-month period of time. This design protects our customers from experiencing dramatic changes in gas costs, meaning that it takes time to pay off higher balances of gas costs. Year-over-year, the gas cost component of customer rates has increased 51% to recover these costs.
The delivery charge was adjusted in February 2023 and reflects the cost of operating the natural gas utility in Arizona and recovering our investment in the natural gas distribution system in the state. This rate only changes as a result of a base rate increase, which occurs approximately every two years.
What are the different charges I see on my bill?
There are two primary charges on your bill: the Gas Cost and the Delivery Charge (the cost of providing safe and reliable service).
Your Gas Cost is based on your usage. Southwest Gas bills customers on a per-therm basis, which is the amount of energy contained in the natural gas delivered to your home. Based on your natural gas usage, your total therms used each month may increase or decrease.
A therm is a unit of heat measurement (one therm is equal to 100,000 British thermal units) used to measure energy.
The Delivery Charge primarily reflects a base rate for recovering the cost of providing safe and reliable natural gas service to your home or business. These base rates are only adjusted after they have been scrutinized and approved through the regulatory process of a general rate case.
The remaining costs are comprised of surcharges for specific previously approved programs and federal, state, and local taxes.
Gas Costs
Why does the cost of gas change?
The price of natural gas, like other commodities, is affected by supply and demand. Increases in the natural gas market from 2021 – 2023 are now reflected in the gas cost component of customer rates. Year-over-year, the gas cost component of customer bills is 51% higher due to the higher costs in the market over the last two years.
The price of natural gas, like other commodities, can rise and fall affected by supply and demand and other external factors like weather events, policy changes, and other economic factors. We purchase gas on behalf of our customers – your cost of gas recovers the actual purchase gas cost we made, with no markup or profit to the Company. The gas cost adjusts monthly and reflects an average of gas costs over a 12-month period of time. This design protects our customers from experiencing dramatic changes in gas costs, meaning that it takes time to pay off higher balances of gas costs.
The Gas Cost rate has increased by 32 cents per therm over the last year, reflecting the significant increase in commodity costs since 2022 purchased on behalf of our customers in Arizona.
We have some good news, gas costs have stabilized and are lower this year, and we are projecting that these amounts will start to be reflected in customer bills by the end of the year.
Does Southwest Gas profit from the gas I use in my home?
No. We purchase gas on your behalf. Your cost of gas recovers the actual purchase gas cost we made - there is no markup.
We are only allowed to earn a return on the investments we make in our system to help ensure the safe and reliable delivery of natural gas service to your home or business. These investments and the return are scrutinized and approved by our regulators as part of a General Rate Case. This base rate was changed in February 2023 and increased by 13 cents per therm. Despite the significant investments we have made in the State to help support growth and the ongoing demand for natural gas service, we have managed to keep our costs of providing service relatively flat over time, and the primary drivers for volatility in customer bills is related to the cost of gas and changes in usage.
Are gas costs going to go down?
Yes, at present, market prices have stabilized and have been lower this year.
Due to the mechanics of the gas cost calculation, we are projecting that these amounts will start to be reflected in customer bills by the end of the year.
If gas costs are going down, why is my bill not going down?
To protect our customers from experiencing dramatic changes in gas costs, gas costs are adjusted monthly, and changes are gradually reflected in customers' bills over time
The gas cost adjusts monthly and reflects an average of gas costs over a 12-month period of time. Because of this timing difference, you paid lower than actual gas costs throughout much of the past two years, even though the actual cost of gas was much higher. This timing difference is intended to protect our customers by smoothing out large swings in gas costs over an extended period of time.
We have some good news. We have started seeing gas costs go down. Due to the mechanics of the gas cost calculation, changes in the cost of gas will be passed on through future monthly gas cost adjustments. We anticipate customer bills to reflect lower costs by the end of the year.
Delivery Charge
What is a General Rate Case?
Southwest Gas is a regulated utility and only earns a return on our investments that are approved by our regulators. We are not allowed to adjust our base delivery charges without regulatory approval.
Despite the significant investments we have made in the State to help support growth and to ensure our customers can rely on their natural gas service, we have managed to keep our costs of providing service relatively flat over time. Unlike traditional companies, regulated utilities can only recoup those investments after they have been scrutinized and approved through the regulatory process of a general rate case.
We will continue to prioritize our efforts to operate efficiently and find cost savings initiatives to ensure we are working on your behalf to manage expenses and ensure just and prudent costs for providing safe and reliable energy service to our communities.
How does a General Rate Case affect me?
In February 2024, we proposed a base rate adjustment to the Arizona Corporation Commission (ACC), seeking approval to adjust rates to reflect the current level of operating expense, as well as to recover the cost of the investment we have made in Arizona to improve safety and reliability and support growth in the State.
Our last base rate adjustment was effective in February 2023, and current customer rates reflect costs from 2020. The increase was reflected in the delivery charge, an increase of 13 cents per therm.
Southwest Gas is very committed to managing our costs to ensure you continue to receive safe, reliable, and affordable service. Despite the significant investments we have made in Arizona to help support growth and the ongoing demand for natural gas service, we have managed costs with the result of keeping our costs of providing service relatively flat over time, and the primary driver for volatility in customer bills is related to the cost of gas.
Will I be notified if rates change?
Southwest Gas provided several notices to customers beginning in February 2023 regarding the change in the Delivery Charge component.
We notify all customers through bill inserts, along with providing customers with tips on how to conserve energy and assistance programs available.
If you have any additional questions about this information call us at
877-860-6020
or visit
swgas.com/contactus
Customer Assistance
Is there any way I can lower my bill?
Simple efforts like being mindful of thermostat settings, installing weather stripping around doors and windows, and replacing air filters can all help keep winter bills down.
Some homeowners and renters may even qualify to receive assistance with money-saving home improvements to increase the energy efficiency of their home, at no cost.
We encourage all residential customers to take advantage of the energy savings portal through our website, where you can find personalized tips on how to lower your energy use, compare your energy use to similar or comparable homes.
For more energy-efficiency tips and information visit
swgas.com/tips
What if I need help paying my bill?
We are here to help and have a variety of payment and assistance programs available.
You can sign up for the Equal Payment Plan to help manage your payments and monthly budget. We also offer assistance programs, including a 30% per therm discount for qualified low-income customers, emergency assistance programs through Bills Assistance and Energy Share, and an Installment Plan for those with outstanding bills.
For more information about these and other programs call us at 877-860-6020 or visit swgas.com/azassist
Special Assistance Programs
Southwest Gas offers money-saving options for residential customers who qualify for assistance. To find out if you meet the criteria for these programs, choose your location below.
Energy-Saving Tips
When you're spending more time at home, your energy use may increase. On average, natural gas can save your household $879/year when compared to other homes that use electricity to heat, cook, and dry clothing.
Residential Rebates
Save money when you use high-efficiency natural gas appliances. Get rebates on qualified appliances and equipment in your area.
