TO: EDITORS, NEWS DIRECTORS

DATE: April 18, 2001

FOR: IMMEDIATE RELEASE

Southwest Gas Rate Case Update

Arizona Corporation Commissioner Marc Spitzer and Commission Chairman Bill Mundell today rejected a settlement to the Southwest Gas Rate Case filed in May of 2000. The amended settlement would have resulted in average rate increases of $1.59 in the summer and $2.80 in the winter. Chairman Bill Mundell stated, "We don't feel comfortable voting on a rate increase based on the information we have in front of us today."

Commissioner Spitzer said, "In spite of vigorous debate and the amendments we passed, I cannot vote for this rate increase in its current form. There are unresolved issues that need to be addressed in the context of a full hearing."

The Commissioners directed Staff and the parties in the proceeding to conduct a full hearing before an administrative law judge. The administrative law judge will then draft a new Recommended Opinion and Order. The Commissioners will take the matter up at a subsequent date. A timeline for these steps is unknown at this time.

Staff and the parties were directed by the Commissioners to work on a rate structure that will provide incentives for conservation while still providing the utility with the revenue it needs. The Commissioners also asked the parties to address issues related to the company's rapid growth, the failed merger with ONEOK and the revenue effect of warmer than normal temperatures.