LAS VEGAS – November 04, 2026 -- Southwest Gas Holdings (NYSE: SWX) closed Nevada and California rate cases worth about $80 million in combined annual revenue increases, and its utility delivered an 8.0% return on equity for the twelve months ended September 30, 2026.
Nevada and California decisions add $80.6 million in annual revenue
Nevada regulators granted nearly $48 million of incremental annual revenue, with rates effective in October 2026. The decision keeps the 9.5% authorized return on equity and sets a 51.35% equity / 48.65% debt capital structure. Southwest Gas has petitioned for reconsideration on approximately $50 million of Certification Plant that was deferred to a future proceeding.
In California, the utility secured $32.6 million of incremental annual revenue, effective January 1, 2026. The commission approved a 10% return on equity and a 50/50 equity-debt structure. It also cut the Automatic Trigger Mechanism adjustment factor from 50 bps to 20 bps, based on changes in Moody's A-rated Utility Bond Index.
Arizona staff recommends $58 million and a formula-rate model
Commission Staff in Arizona has recommended $58 million of incremental annual revenue, a 9.75% return on equity and a move to a formula-rate model. A hearing is set for December. The company expects new rates in April 2027.
Third-quarter net income from continuing operations reaches $12.8 million
Net income from continuing operations was $12.8 million for the quarter, up $16.5 million year over year. Adjusted net income was $14.7 million, up $10.5 million. For nine months, net income from continuing operations was $193.3 million, up $63.4 million. Adjusted net income was $195.4 million, up $30.4 million.
Utility net income rose $6.9 million in the quarter. Net interest deductions fell $4.9 million, operating margin rose $3.8 million, and the income tax benefit rose $3.4 million on a change in state apportionment rates. Higher California rates added about $3.2 million of operating margin. Nondecoupled billed margin in Arizona and Nevada fell $3.9 million.
Gross margin was $115.1 million for the quarter and $571.1 million for nine months. Operating margin was $278.1 million and $1.1 billion. Year-to-date O&M was relatively flat, and the company targets flat O&M per customer. Liquidity stood at nearly $0.7 billion.
Great Basin 2028 project targets $270-300 million of annual margin
The estimated $2.3 billion cost-of-service pipeline is expected to generate $270 million to $300 million of incremental annual margin from its expected fourth-quarter 2028 in-service date. Shippers have executed binding precedent agreements and posted surety supporting 1 Bcf per day of contracted demand. After FERC approval of the certificate, they must sign transportation agreements with minimum 20-year terms. The company says that contracted volume alone fully supports the margin target.
The 48-inch design serves 1 Bcf per day and can handle nearly 2 Bcf per day with modest added investment. Extra volume within that capacity is expected to lower rates for all subscribed shippers. Capital spending is expected to run about 15% in 2026, 25% in 2027 and 60% in 2028. The company has invested about $148 million in the project so far, within nearly $806 million of total investment in the first nine months of 2026.
The FERC certificate application remains on track for filing by year-end, following draft resource reports and a draft FAST-41 application. Northern Nevada growth has generated about 1.8 Bcf per day of non-binding expressions of interest for 2029 through 2035 in-service dates. With added compression, the pipeline can reach about 4 Bcf per day. The company does not expect these requests to affect the filing schedule. It will update long-term guidance in its five-year plan in February 2027.