Southwest Gas (US:SWX)2026-02-25 13:27Regulatory and Compliance - Southwest Gas filed a general rate case in California in September 2024, requesting rates effective January 1, 2026[38]. - California's legislation requires Southwest Gas to comply with the GHG Emissions Reporting Program and aims to reduce GHG emissions to 40% below 1990 levels by 2030, with an extension to 2045[64]. - Southwest Gas successfully met its three-year compliance obligation ending in 2023 by surrendering a sufficient number of allowances and carbon offsets[66]. - In December 2025, the CPUC conditionally approved Southwest Gas' purchasing agreement for RNG supplies, which was filed for approval on July 28, 2025[67]. Market and Supply - For the 2025/2026 heating season, firm fixed-price physical commodity purchases ranged from approximately $4.02 to approximately $5.37 per dekatherm[44]. - Southwest Gas acquired natural gas from 44 suppliers in 2025, ensuring competitive pricing and reliability in its supply portfolio[41]. - The natural gas market has shown stability in 2024 and 2025, with prices competitive compared to other energy forms[52]. - The company has limited market area storage services availability, impacting its operational flexibility[49]. Infrastructure and Capacity - Southwest Gas operates a 233,000 dekatherm above-ground LNG regasification facility in southern Arizona to enhance service reliability[50]. - Great Basin, a subsidiary of Southwest Gas, is undertaking an expansion project to increase system capacity and better serve customer demand[59]. Energy Initiatives and Sustainability - Southwest Gas is actively involved in energy efficiency initiatives and supports renewable energy efforts in response to state policies[57]. - The company does not anticipate any material adverse impact on operating margin from fuel switching or alternative energy initiatives over the near term[57]. - Southwest Gas is committed to providing safe, reliable, sustainable, and affordable natural gas service while supporting renewable initiatives and the use of RNG and CNG as transportation fuels[61]. - In 2025, Southwest Gas held a public hearing for its 2024 hydrogen blending application in California to establish a hydrogen injection standard[61]. - The company is actively working with California natural gas distribution companies to meet requirements for incorporating RNG produced from diverted waste into its gas supply portfolios[67]. Workforce and Culture - The average tenure of Southwest Gas employees is approximately 11 years, contributing to knowledge transfer and succession processes[73]. - As of December 31, 2025, Southwest Gas had 2,453 regular full-time equivalent employees, emphasizing the importance of a skilled workforce for safety performance and customer satisfaction[73]. - Southwest Gas is committed to a culture of continuous improvement in operations and efficiency, with safety metrics forming part of incentive compensation programs for leaders[72]. Financial Impact - The California Climate Credit, implemented in October 2018, represents a return of auction proceeds, updated annually and distributed each April, with no expected direct impact on earnings[66].