Spring Creek Expansion Status Spring Creek Association September

Spring Creek Expansion – Status Spring Creek Association September 2019

Filing - Procedural Information Southwest Gas filed an Application for authority to expand natural gas service to Spring Creek and the surrounding area with the Public Utilities Commission of Nevada on June 13, 2019. The Commission has 210 days to review and act on the application January 2020 Public sessions to hear from interested consumers were held in Spring Creek (September 12 th) and Carson City (September 16 th). Notice was provided to all existing Southwest Gas Customers via bill inserts/postcard and potential customers via publication. Upcoming Dates: Continued Pre-hearing conference – October 21 st Testimony from the PUCN Staff and the Consumer Advocate – October 23 rd Company Rebuttal Testimony – November 6 th Hearings scheduled for November 19 th and November 20 th in Carson City

Filing – Expansion Details Our application proposes to invest approximately $61. 9 million to serve existing Intent to Request Natural Gas Service Forms received from residents, businesses and schools in the Spring Creek area. 12. 1 miles of high pressure approach main 22 miles of backbone distribution facilities 168 miles of distribution main/services Line extension analysis determined approximately $60. 3 million of the $61. 9 million is considered to be uneconomic. Estimated project costs/proposed customer loads/build out periods are inputs to develop an allowable (economic) utility investment The difference between total project costs and the allowable economic investment are considered to be uneconomic Our application proposes an alternative cost recovery method for the uneconomic portion of the project based on existing Intent to Request Natural Gas Service forms and a six year build out period.

Filing – Cost Recovery Details Our cost recovery proposal is based upon those receiving direct and indirect benefits from the expansion project as required in the legislation allowing alternative cost recovery methods to expand service into unserved and underserved areas – Senate Bill 151 (2015). Utilized the Economic Contribution & Impact Study Estimates of energy savings from conversions to natural gas Our application proposes an alternative cost recovery method to collect the $60. 3 million in uneconomic project costs. An Infrastructure Expansion Rate based upon usage from all Northern Nevada customers including new expansion customers designed to collect approximately $52. 5 million. A Local Area Expansion Charge consisting of an additional rate based upon usage from Elko District customers and new expansion customers and a fixed monthly surcharge from new expansion customers designed to collect $7. 8 million.

Estimated Average Bill Description Average Monthly Bill Proposed IER/LEAC and Monthly Surcharge Estimated Average Monthly Bill Northern Nevada Customers Outside Spring Creek Expansion Area $71. 34 $0. 98 $72. 32 Elko District Customers $70. 35 $2. 55 $72. 90 Spring Creek Expansion Area Customers $70. 35 $3. 50 $30. 00 $103. 85

Project – FYI Southwest Gas has met with several broadband providers to discuss our requirements and proposed timelines to allow for the opportunity for a joint trench approach in bringing additional broadband resources to the Spring Creek area. Our proposed timeline anticipates beginning the final project engineering design and permit requirements with NDOT and BLM upon approval by the PUCN. The installation of high pressure approach main along Lamoille Highway will be the initial natural gas pipeline installation. The proposed Local Area Expansion Charge and Expansion Area surcharge will remain in place until the fixed amount of $7. 8 million is collected. Since these were designed using only the information provided by those residents, businesses and schools who completed an Intent to Request Natural Gas Service form, additional customers (both new and existing residents and businesses converting to natural gas) may allow the $7. 8 million to be collected faster.

Approach Main

General Project Timeline

Project - Support for the Spring Creek Expansion project is important. Letters and statements of support for the project have been received from: Elko County Commission Congressman Mark Amodei Assemblyman John Ellison Northern Nevada Regional Economic Development Association Elko County School District Elko Summit Homeowners Association Residents and businesses who completed Intent forms Can we add the Spring Creek Association Board to this list? Questions on the proposed Spring Creek expansion project can be sent directly to Southwest Gas by using our dedicated outreach email address https: //www. swgas. com/en/springcreek