ALJ/BMD/tcg Mailed 5/27/2005

Decision 05-05-033 May 26, 2005

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of Southwest Gas Corporation for Approval of a Gas Cost Incentive Mechanism. (U 905)

Application 04-11-009 (Filed November 12, 2004)

OPINION ON SOUTHWEST GAS CORPORATION'S APPLICATION
FOR APPROVAL OF A GAS COST INCENTIVE MECHANISM

Summary

Our decision today approves Southwest Gas Corporation's (Southwest) application to establish a gas cost incentive mechanism (GCIM). The adopted GCIM will provide an objective standard by which to measure Southwest's gas procurement performance, an incentive to lower overall gas costs, and a sharing of gas procurement benefits between ratepayers and Southwest.