Graham County Utilities members vote to sell natural gas division to Southwest Gas

Jon Johnson Photo/Gila Herald: The GCU members voted 124-58 to approve a board of directors’ recommendation to sell off its natural gas division to Southwest Gas.

Passes by three votes

By Jon Johnson

PIMA – Members of the Graham County Utilities voted 124-58 during its annual meeting Saturday morning, to sell its natural gas division to Southwest Gas.

The action needed 122 votes (2/3 majority of voting members) to pass and still needs to be approved by the Arizona Corporation Commission.

Previously, Graham County Electric Co-op/Utilities General Manager/CEO Kirk Gray told the Gila Herald that due to heightened restrictions members would likely have seen a service fee increase of about $31.50 per month is the sale didn’t go through. However, since the sale went through, residential customers will likely see an increase of $2.05 per month while commercial users will actually see a decrease in their bills.

“The regulatory burden has gotten so great that we’ve had to put on more and more people and has just become too cost-prohibitive for a small gas distribution utility to operate,” Gray said. “Southwest Gas has 1.2 million meters, we have 5,300. So, they can spread those costs over a greater number of meters and they are in the gas business. So, they also get economy to scale on purchasing gas.”

With the sale, GCU will be able to pay off all the debt to its cooperative lender as well as the Graham County Electric Cooperative, which has been financing the gas utility. Gray said the sale will also enable them to pay off about $300,000 in capital credits that the membership has ownership on, sending money back to the membership.

The sale will likely be discussed by the Arizona Corporation Commission at an open meeting in 2021, with possible approval coming later that year as well.

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