Tim Winter

Tim Winter sought clarification on how the formula rate would work in Arizona, including the historical test year, decision timeline, and the prospective or historical basis of adjustments. He also asked about potential major obstacles for Great Basin, its earnings profile, and whether AFUDC would be recorded during construction.

Answer

Justin Brown, President of Southwest Gas Corporation, explained the general framework for Arizona's formula rate based on the policy statement, noting that nuanced details are being worked out through pending rate cases. He outlined a potential timeline for filing, decision, and an annual true-up process starting around 2028. For Great Basin, Justin stated no major obstacles other than coordinating with counterparties, confirmed AFUDC accrual during construction, and deferred detailed earnings profile discussions until the February call.

Tim Winter sought clarification on how the formula rate would work in Arizona, specifically regarding the historical test year, decision timeline, and whether adjustments would be prospective or historical. He also asked about any potential major obstacles for Great Basin and the project's earnings profile, including AFUDC and the ramp-up, assuming high-end CapEx and a November 2028 COD.

Answer

Justin Brown, President of Southwest Gas Corporation, explained that Arizona's formula rate mechanics are still being worked out, but generally involve a rate case decision followed by an annual true-up process (likely beginning in 2028) to adjust rates based on authorized versus actual experience. For Great Basin, he sees no major obstacles other than coordinating with counterparties, as it's an upsizing of an existing system. He confirmed AFUDC would be accrued during construction, with more details on the earnings profile expected in the February Q4 call.