SOUTHWEST GAS CORP

Previous wording

As of June 30, 2026, Southwest Gas had approximately 2,293,000 residential, commercial, industrial, and other natural gas customers, of which 1,231,000 customers were located in Arizona, 854,000 in Nevada, and 208,000 in California. Residential and small commercial customers represented over 99% of the total customer base. During the twelve months ended June 30, 2026, approximately 52% of Operating margin (Regulated operations revenues less the net cost of gas sold) was earned in Arizona, approximately 34% in Nevada, and approximately 14% in California. During this same period, Southwest Gas earned approximately 85% of its Operating margin from residential and small commercial customers, approximately 4% from other sales customers, and approximately 11% from transportation customers. These patterns are expected to remain

Current wording

As of September 30, 2026, Southwest Gas had approximately 2,298,000 residential, commercial, industrial, and other natural gas customers, of which 1,233,000 customers were located in Arizona, 857,000 in Nevada, and 208,000 in California. Residential and small commercial customers represented over 99% of the total customer base. During the twelve months ended September 30, 2026, approximately 52% of Operating margin (Regulated operations revenues less the net cost of gas sold) was earned in Arizona, approximately 34% in Nevada, and approximately 14% in California. During this same period, Southwest Gas earned approximately 86% of its Operating margin from residential and small commercial customers, approximately 4% from other sales customers, and approximately 10% from transportation customers. These patterns are expected to remain materially consistent for the foreseeable future subject to the ultimate outcome of the Great Basin 2028 expansion project. Refer to Great Basin 2028 Expansion Project discussion below.

Previous wording

•If Southwest Gas has under-recovered costs, it records a regulatory asset on the Condensed Consolidated Balance Sheets as deferred purchase gas costs and interest income on the Condensed Consolidated Statements of Income within the Other income (deductions) line item.

Current wording

•If Southwest Gas has under-recovered costs, it records a regulatory asset on the Condensed Consolidated Balance Sheets as deferred purchased gas costs and interest income on the Condensed Consolidated Statements of Income within the Other income (deductions) line item.

Previous wording

The demand for natural gas is seasonal, with greater demand in the colder winter months and decreased demand in the warmer summer months. All of Southwest Gas’ service territories have decoupled rate structures (alternative revenue programs), which are designed to eliminate the direct link between volumetric sales and revenue, thereby mitigating the impacts of weather variability and conservation on Operating margin, allowing Southwest Gas to pursue energy efficiency initiatives. Nearly all of our customers, and resulting revenue and margin, are included as part of mechanisms that reduce the impact of weather and volume variability on our earnings.

Current wording

The demand for natural gas is seasonal, with greater demand in the colder winter months and decreased demand in the warmer summer months. All of Southwest Gas’ service territories currently have decoupled rate structures (alternative revenue programs), which are designed to eliminate the direct link between volumetric sales and revenue, thereby mitigating the impacts of weather variability and conservation on Operating margin, allowing Southwest Gas to pursue energy efficiency initiatives. Nearly all of our customers, and resulting revenue and margin, are included as part of mechanisms that reduce the impact of weather and volume variability on our earnings.

Previous wording

(2)Historically, Southwest Gas Corporation’s operating results have corresponded to the operating results of the Natural Gas Distribution Segment. The amounts reported in the table above differ from the Natural Gas Distribution segment for the six months ended June 30, 2025 due to the revision described in our 2025 Annual Report on Form 10-K.

Current wording

(2)Historically, Southwest Gas Corporation’s operating results have corresponded to the operating results of the Natural Gas Distribution Segment. The amounts reported in the table above differ from the Natural Gas Distribution segment for the nine months ended September 30, 2025, due to the revision described in our 2025 Annual Report on Form 10-K.

Previous wording

2nd Quarter 2026 overview and other recent developments

Current wording

3rd Quarter 2026 overview and other recent developments

Previous wording

•Finished the second quarter of 2026 with $270.5 million of Cash and cash equivalents on a consolidated basis and nearly $1.0 billion in available liquidity; the Company does not expect to issue equity in 2026.

Current wording

•Finished the third quarter of 2026 with nearly $657.4 million in available liquidity; the Company does not expect to issue equity in 2026.

Previous wording

•Invested $211.5 million into Southwest Gas for capital projects.

Current wording

•Invested $417.3 million into Southwest Gas for capital projects.

Previous wording

•Year-to-date Utility gross margin of $457.3 million and Operating margin of $796.7 million.

Current wording

•Year-to-date Utility gross margin of $571.1 million and Operating margin of $1.1 billion.

Previous wording

•$506.9 million capital investment year-to-date.

Current wording

•$787.2 million capital investment year-to-date.

Previous wording

Historically, the Natural Gas Distribution segment operating results have corresponded to the operating results of Southwest Gas Corporation. The amounts reported in the table below differ from Southwest Gas Corporation for the three months ended June 30, 2025 period due to the revision described in Note 6 - Previously Issued Condensed Consolidated Financial Statement.

Current wording

Historically, the Natural Gas Distribution segment operating results have corresponded to the operating results of Southwest Gas. The amounts reported in the table below differ from Southwest Gas for the nine months ended September 30, 2025, due to the revision described in Note 6 - Previously Issued Condensed Consolidated Financial Statements.

Previous wording

•$16.2 million higher Income tax expense primarily due to a $12.0 million state income tax benefit recognized in the prior year’s quarter related to a change in state apportionment rates that did not reoccur in the current quarter. The increase was also driven by higher pre-tax income differences and lower amortization of excess accumulated deferred income taxes in the current quarter.

Current wording

•$3.4 million higher Income tax benefit primarily due to a $3.4 million higher deferred state income tax benefit recognized in the current year’s quarter related to a change in state apportionment rates when compared to the prior year’s quarter combined with higher amortization of excess accumulated deferred income taxes.

Previous wording

•$3.7 million lower Operations and maintenance expense primarily due to lower net insurance cost of $2.5 million, outside services costs of $1.7 million, and bad debt expense. These decreases were partially offset by increases in employee-related labor costs and leak survey and line locating expense.

Current wording

•$2.0 million higher Operations and maintenance expense primarily due to increases in employee-related labor costs of $2.7 million, inclusive of a one-time incentive award of $2.0 million, and bad debt expense of $1.7 million. These increases were partially offset by lower net insurance cost of $2.1 million and lower leak survey and line locating expenses.

Previous wording

•$8.7 million, or 13%, higher Depreciation and amortization expense reflecting a $726.7 million, or 7%, increase in gas plant in service since the corresponding second quarter of 2025, in addition to $4.9 million in higher amortization related to regulatory account balances noted below. The increase in plant was attributable to pipeline capacity reinforcement work, franchise requirements, scheduled pipe replacement activities, and new infrastructure.

Current wording

•$1.8 million, or 2%, higher Depreciation and amortization expense reflecting a $788.2 million, or 7%, increase in gas plant in service since the corresponding third quarter of 2025. The increase in plant was attributable to pipeline capacity reinforcement work, franchise requirements, scheduled pipe replacement activities, and new infrastructure. Also contributing to the increase was a $1.8 million higher amortization of regulatory account balances which is offset in Operating margin. This increase was partially offset by a $5.8 million cumulative adjustment related to certain regulatory assets.

Previous wording

In the six months ended June 30, 2026 compared to the same period in 2025, thedecrease in net income of $10.1 million was primarily due to:

Current wording

In the nine months ended September 30, 2026 compared to the same period in 2025, thedecrease in net income of $3.1 million was primarily due to:

Previous wording

•$22.6 million higher Income tax expense due to a$12.0 million state income tax benefit recognized in the prior year’s period related to a change in state apportionment rates that did not reoccur in the current period . The increase was also driven by higher pre-tax income differences, lower amortization of excess accumulated deferred income taxes, and lower nondeductible executive compensation in the current period when compared to the prior year’s period.

Current wording

•$19.2 million higher Income tax expense due to an $8.6 million higher deferred state income tax benefit recognized in the prior year’s period related to a change in state apportionment rates when compared to the current year’s period. The increase was also driven by $5.1 million due to higher pre-tax income differences, $3.9 million due to lower amortization of excess accumulated deferred income taxes, and $2.1 million due to larger nondeductible executive compensation partially offset by $0.5 million due to other nontaxable and nondeductible items in the current period when compared to the prior year’s period.

Previous wording

•$14.7 million, or 9%, higher Depreciation and amortization expense reflecting a $726.7 million, or 7%, increase in gas plant in service since the corresponding period of 2025, in addition to $6.0 million in higher amortization related to regulatory account balances noted below. The increase in plant was attributable to pipeline capacity reinforcement work, franchise requirements, scheduled pipe replacement activities, and new infrastructure.

Current wording

•$16.5 million, or 7%, higher Depreciation and amortization expense reflecting a $788.2 million, or 7%, increase in gas plant in service since the corresponding period of 2025. The increase in plant was attributable to pipeline capacity reinforcement work, franchise requirements, scheduled pipe replacement activities, and new infrastructure. In addition, there was an increase of $7.8 million due to higher amortization related to regulatory account balances, which is offset in Operating margin. This increase was partially offset by a $5.8 million cumulative adjustment related to certain regulatory assets.

Previous wording

•$13.0 million lower Other income, which is net of other deductions, primarily driven by lower interest income earned on money market accounts of $5.9 million, lower net periodic benefit gain related to pension non-service components of $4.3 million, the absence of a prior year gain on the sale of certain miscellaneous assets of $1.6 million, and higher contributions to the Southwest Gas Foundation of $1.9 million primarily due to timing differences as the 2025 contribution was made in 2024. These decreases were partially offset by an increase in Equity AFUDC of $1.6 million related to the commencement of the Great Basin 2028 expansion project.

Current wording

•$13.1 million lower Other income, which is net of other deductions, primarily driven by lower interest income earned on money market accounts of $8.0 million, lower net periodic benefit gain related to pension non-service components of $6.5 million, the absence of a prior year gain on the sale of certain miscellaneous assets of $1.6 million, and higher contributions to the Southwest Gas Foundation of $1.9 million primarily due to timing differences as the 2025 contribution was made in 2024. These decreases were partially offset by an increase in Equity AFUDC of $3.9 million related to the commencement of the Great Basin 2028 expansion project and $1.8 million higher COLI policies gains.

Previous wording

•$1.8 million higher Taxes other than income taxes due primarily to increase in property taxes across all of Southwest Gas’ jurisdictions.

Current wording

•$3.1 million higher Taxes other than income taxes due primarily to increase in property taxes across all of Southwest Gas’ jurisdictions.

Previous wording

•$40.7 million higher Operating margin primarily driven by updated rates that better align with Southwest Gas’ cost of service and capital investments across all territories adding approximately $32.7 million of incremental margin, approximately $20.2 million of which was attributable to the revenue recognized in connection with final approval of the All-Party Settlement, before adjustments to cost of capital, associated with the California general rate case, and $4.5 million attributable to customer growth for all territories. Also contributing to the increase were $4.9 million attributable to nondecoupled billed margin across Arizona and Nevada and $6.0 million related to the combined impacts of increases in recovery/return, offset by a comparable increase in depreciation and amortization expense in regulatory account balances noted above. Partially offsetting the increase is $4.7 million attributable to the absence of recovery in the current period, as recovery under the Vintage Steel Pipeline Program was concluded during the first quarter of 2025.

Current wording

•$44.5 million higher Operating margin primarily driven by updated rates that better align with Southwest Gas’ cost of service and capital investments across California and Arizona adding approximately $35.9 million, of which approximately $23.4 million was attributable to the revenue recognized in connection with final approval of the California general rate case and related cost of capital proceedings. Also, there was a $7.8 million increase related to recovery on regulatory account balances, with a comparable increase in Depreciation and amortization expense, $6.1 million attributable to customer growth for all territories, and $1.5 million increase related to Arizona SIM. Partially offsetting these increases was a $4.7 million decrease attributable to the absence of recovery in the current period, as recovery under the Vintage Steel Pipeline Program was concluded during the first quarter of 2025.

Previous wording

•$36.7 million lower Income tax expense due a $39.2 million state income tax expense recognized in the prior year’s quarter related to a change in state apportionment rates that did not reoccur in the current quarter. The decrease was partially offset by higher pre-tax income differences in the current quarter when compared to the prior year’s quarter and changes to state net operating losses to reflect expected utilization.

Current wording

•$8.4 million higher Income tax benefit compared to an Income tax expense in the same period in 2025 primarily due to an $8.7 million deferred state income tax expense recognized in the prior year’s quarter related to a change in state apportionment rates. The decrease was partially offset by lower pre-tax loss differences in the current quarter when compared to the prior year’s quarter.

Previous wording

•$18.3 million lower Net interest deductions primarily driven by the repayment of the $550.0 million term loan in the summer of 2025 as well as the decrease in the balance that was previously outstanding on the revolving credit facility.

Current wording

•$2.8 million lower Net interest deductions primarily driven by the repayment of the remaining $225.0 million term loan in the prior year’s quarter as well as the repayment of the previously outstanding balance on the revolving credit facility.

Previous wording

In the three months ended June 30, 2026, net income improved by $47.7 million compared to a net loss in the same period in 2025; the improvement was primarily due to:

Current wording

In the nine months ended September 30, 2026, net income improved by $66.5 million compared to a net loss in the same period in 2025; the improvement was primarily due to:

Previous wording

•$31.1 million lower Income tax expense due a $39.2 million to state income tax expense recognized in the prior year’s period related to a change in state apportionment rates that did not reoccur in the current period. The decrease was partially offset by higher pre-tax income differences in the current period when compared to the prior year’s period and changes to state net operating losses to reflect expected utilization.

Current wording

•$39.5 million lower Income tax expense due to a $47.9 million deferred state income tax expense recognized in the prior year’s period related to a change in state apportionment. The decrease was partially offset by higher pre-tax income differences in the current period when compared to the prior year’s period and changes to state net operating losses to reflect expected utilization.

Previous wording

•$8.6 million lower Net interest deductions primarily driven by the repayment of the $550.0 million term loan in the summer of 2025 as well as the decrease in the balance that was previously outstanding on the revolving credit facility.

Current wording

•$21.1 million lower Net interest deductions primarily driven by the repayment of the $550.0 million term loan in the summer of 2025 as well as the decrease in the balance that was previously outstanding on the revolving credit facility.

Previous wording

•$2.6 million higher Other income, which is net of other deductions, primarily driven by an increase in interest income earned on money market accounts.

Current wording

•$6.5 million higher Other income, which is net of other deductions, primarily driven by an increase in interest income earned on money market accounts.

Previous wording

In the three months ended June 30, 2026, compared to the same period in 2025, the decrease in net income of $4.9 million was consistent with the Natural Gas Distribution segment.

Current wording

In the three months ended September 30, 2026, compared to the same period in 2025, the increase in net income of $6.9 million was consistent with the Natural Gas Distribution segment.

Previous wording

In the six months ended June 30, 2026, compared to the same period in 2025, the decrease in net income of $9.7 million was consistent with the Natural Gas Distribution segment except for:

Current wording

In the nine months ended September 30, 2026, compared to the same period in 2025, the decrease in net income of $2.8 million was consistent with the Natural Gas Distribution segment except for:

Previous wording

•$38.6 million higher Operating margin consistent with the Natural Gas Distribution segment explanation combined with a decrease in Operating margin of $2.1 million due to revisions. See Note 6 - Previously Issued Condensed Consolidated Financial Statementfor additional information.

Current wording

•$42.4 million higher Operating margin consistent with the Natural Gas Distribution segment explanation combined with a decrease in Operating margin of $2.1 million due to revisions. See Note 6 - Previously Issued Condensed Consolidated Financial Statementsfor additional information.

Previous wording

•$20.2 million higher Income tax expense consistent with the Natural Gas Distribution segment explanation combined with a decrease in income taxes of $2.4 million related to the prior year adjustments described in our 2025 Annual Report on Form 10-K.

Current wording

•$16.8 million higher Income tax expense consistent with the Natural Gas Distribution segment explanation combined with a decrease in income taxes of $2.4 million related to the prior year adjustments described in our 2025 Annual Report on Form 10-K.

Previous wording

The application also proposes a formula-based RAM, which is an annual adjustment intended to reduce regulatory lag by more closely aligning customer rates with authorized returns between rate cases. The proposed RAM contemplates an approved formula to adjust customer rates based on Southwest Gas’ earned return on common equity compared with its authorized return on common equity, subject to a Deadband. Approval of the RAM would eliminate the need for certain existing regulatory tracker mechanisms, including the TEAM and the SIM. New rates from this filing are expected to become effective by April 2027, subject to regulatory approval.

Current wording

The application also proposes a formula-based RAM, which is an annual adjustment intended to reduce regulatory lag by more closely aligning customer rates with Southwest Gas’ actual cost of service and authorized returns between rate cases. The proposed RAM contemplates an approved formula to adjust customer rates based on Southwest Gas’ earned return on common equity compared with its authorized return on common equity, subject to a Deadband. Approval of the RAM would eliminate the need for certain existing regulatory tracker mechanisms, including the TEAM and the SIM. New rates from this filing are expected to become effective by April 2027, subject to regulatory approval. Staff filed testimony recommending a $58.2 million revenue increase based on a 9.75% return on equity with a 0.20% fair value increment or alternatively, a $53.7 million revenue increase with no fair value increment. Staff supports the implementation of the RAM, signaling support for a return on equity at the lower end of its recommended reasonable range of 9.5% - 9.75% should the Commission adopt the RAM.

Previous wording

•The SIM supports recovery of eligible non-revenue-producing infrastructure investments related to safety, code compliance, and system integrity. Recovery through the SIM is subject to an annual investment cap of $50 million, with surcharge updates occurring annually. The first SIM surcharge application was filed March 2026, with rates effective April 1, 2026, subject to refund. The ACC approved the SIM surcharge as filed by Southwest Gas in June 2026.

Current wording

•The SIM supports the recovery of eligible non-revenue-producing infrastructure investments related to safety, code compliance, and system integrity. Recovery through the SIM is subject to an annual investment cap of $50.0 million, with surcharge updates occurring annually. The first SIM surcharge application for the recovery of SIM eligible projects completed in 2025 was filed March 2026, with rates effective April 1, 2026, subject to refund. The ACC approved the SIM surcharge as filed by Southwest Gas in June 2026. In September 2025, Southwest Gas filed its 2026 Project Plan reflecting SIM eligible projects scheduled to be completed in 2026 along with its Notice of Intent to file a March 2027 SIM surcharge application. Southwest Gas filed its 2027 Project Plan reflecting SIM eligible projects scheduled to be completed in 2027, along with its Notice of Intent to file a March 2028 SIM surcharge application in September 2026.

Previous wording

•The DCA is Arizona’s margin decoupling mechanism and removes the direct relationship between volumes sold and revenue earned. Annual DCA filings return or recover over- or under-collected authorized margins. In August 2025, the ACC approved the Company’s 2025 DCA application, as filed, to recover the under-collected balance as of March 31, 2025, of approximately $40.7 million, which is expected to be recovered over 12 months from the time rates become effective. Southwest Gas’ most recent filing of the DCA Annual Report was made in April 2026, requesting recovery of the under-collected balance of $107.5 million existing as of March 31, 2026. To mitigate impact on customer bills, Southwest Gas proposed to calculate the DCA rates based on an extended 15-month period, seasonally adjusted, with a higher rate applicable in the summer season of May through October and a lower rate

Current wording

•The DCA is Arizona’s margin decoupling mechanism and removes the direct relationship between volumes sold and earned revenues. Annual DCA filings return or recover over- or under-collected authorized margins. In August 2025, the ACC approved Southwest Gas’ 2025 DCA application, as filed, to recover the under-collected balance as of March 31, 2025, of approximately $40.7 million, which is expected to be recovered over 12 months from the time rates become effective. Southwest Gas’ most recent filing of the DCA Annual Report was made in April 2026, requesting recovery of the under-collected balance of $107.5 million existing as of March 31, 2026. To mitigate impact on customer bills, Southwest Gas proposed to calculate the DCA rates based on an extended 15-month period, seasonally adjusted, with a higher rate applicable in the summer season of May through October and a lower rate applicable in the winter season of November through April. The ACC approved Southwest Gas’ application with a minor modification to the seasonal rates as proposed to recover the $107.5 million under-collected balance.

Previous wording

•On January 27, 2025, Southwest Gas filed a requested modification to the PGA mechanism to increase the GCBA adjustment to allow for a greater credit rate to be implemented than otherwise allowed under existing framework to facilitate the more timely return of the existing over-collected balance to customers. The ACC approved Southwest Gas’ request to implement a credit rate of $0.08138 per therm effective the first quarter 2025 and terminates when the GCBA balance is reduced to less than $10.0 million. Additionally, Southwest Gas filed a new request in April 2026 for ACC consideration to increase the applicable Deadband within which Southwest Gas may adjust the GCBA rate from the currently authorized 10 cents per therm to a proposed 20 cents per therm with a requested effective date of August 2026.

Current wording

•On January 27, 2025, Southwest Gas filed a proposed modification to the PGA mechanism to increase the GCBA rate to allow for a greater credit rate to be implemented than otherwise allowed under existing GCBA framework to facilitate the more timely return of the existing over-collected balance to customers. The ACC approved Southwest Gas’ request to implement a credit rate of $0.08138 per therm effective the first quarter 2025, requiring that the credit rate will terminate when the GCBA balance is reduced to less than $10.0 million. In April 2026, in response to the continued over-collected GCBA balance, Southwest Gas filed a new application with the ACC to increase the applicable Deadband within which Southwest Gas may adjust the GCBA rate from the currently authorized 10 cents per therm to a proposed 20 cents per therm with a requested effective date of August 2026 to continue the more timely return of the over-collected balance to customers. In August 2026, the ACC modified and approved Southwest Gas’ application. The currently effective GCBA credit rate of $0.08138 per therm will remain in place through October 2026 and will increase to a credit of $0.10000 in November 2026, $0.12000 in December 2026 through February 2027; then reducing to $0.10000 in March 2027, $0.08000 in April 2027 and zero in May 2027.

Previous wording

Arizona Affiliate Rules Waiver. In February 2026, Southwest Gas filed an application with the ACC seeking a waiver of certain affiliate rules to allow Southwest Gas Holdings and Southwest Gas to issue financing to Great Basin for the 2028 expansion project. On April 8, 2026, the ACC approved the limited waiver to allow for funding of up to $1.7 billion. Southwest Gas would be required to seek an additional waiver if the project costs are anticipated to exceed this amount.

Current wording

Arizona Affiliate Rules Waiver. In February 2026, Southwest Gas filed an application with the ACC seeking a waiver of certain affiliate rules to allow Southwest Gas Holdings and Southwest Gas to issue financing to Great Basin for the 2028 expansion project. On April 8, 2026, the ACC approved the limited waiver for a period of three years and a $1.7 billion cap on the investment in the 2028 expansion project. Southwest Gas is required to seek a modification to the ACC’s final decision if the project costs are anticipated to exceed this amount.

Previous wording

Nevada General Rate Case. On March 18, 2026, Southwest Gas filed a general rate case application with the PUCN, seeking an increase of approximately $71.3 million, or 10.8% of incremental annual revenues to reflect infrastructure investments and operating costs through November 30, 2025. The initial request was updated to seek an increase of approximately $74 million, to update plant in service and adjust for known changes in labor and pension costs for the certification period ended May 31, 2026. The filing requests a 10.0% return on common equity and an actual equity layer of 51.35% at the end of the certification period and proposes to maintain the existing decoupled rate design and basic service charges along with the continuation of the regulatory accounting treatment approved in 2025 to track the actual costs incurred for line location expenses to the level of expense to be established in the general rate case. New rates are expected to become effective in October 2026, subject to regulatory approval.

Current wording

Nevada General Rate Case. On March 18, 2026, Southwest Gas filed a general rate case application with the PUCN, seeking an increase of approximately $71.3 million, or 10.8% of incremental annual revenues to reflect infrastructure investments and operating costs through November 30, 2025. The initial request was updated to seek an increase of approximately $74.2 million, to update plant in service and adjust for known changes in labor and pension costs for the certification period ended May 31, 2026. The filing requested a 10.0% return on common equity and an actual equity layer of 51.35% at the end of the certification period and proposes to maintain the existing decoupled rate design and basic service charges along with the continuation of the regulatory accounting treatment approved in 2025 to track the actual costs incurred for line location expenses to the level of expense to be established in the general rate case. Following a hearing held in August 2026, the PUCN issued an order on October 14, 2026 maintaining the previously authorized 9.5% return on equity and approving the actual equity layer of 51.35%, as proposed, along with an approximately $47.8 million increase in incremental annual revenues with new rates effective in October 2026. The Commission's decision excluded approximately $50.0 million of Certification Plant from rate base. While excluded from rate base in this proceeding, the Commission did not determine that these costs were imprudent or unrecoverable. Accordingly, Southwest Gas filed a petition for reconsideration of this matter on October 28, 2026. The Commission will grant or deny the petition within 40 days after the date of filing; if no action is taken within that period, the petition will be deemed denied. If the petition is denied, Southwest Gas will request recovery of this in the next GRC or alternative ratemaking adjustment filing, subject to approval of an alternative ratemaking plan.

Previous wording

Existing rates are the result of Southwest Gas’ 2023 Nevada general rate case application filed in September 2023 and updated with a certification filing primarily for plant placed in service, and incremental annual leak survey costs, through November 2023. Rates became effective in April 2024, authorizing an overall annual settled rate increase of approximately $59.1 million and a return on common equity of 9.5% relative to a target 50.0% equity ratio. Included in the settled items were a continuation

Current wording

Existing rates are the result of Southwest Gas’ 2023 Nevada general rate case application filed in September 2023 and updated with a certification filing primarily for plant placed in service, and incremental annual leak survey costs, through November 2023. Rates became effective in April 2024, authorizing an overall annual settled rate increase of approximately $59.1 million and a return on common equity of 9.5% relative to a target 50.0% equity ratio. Included in the settled items were a continuation of full revenue decoupling; authority to continue tracking incremental annual leak survey costs in a regulatory asset; and refreshed depreciation rates.

Previous wording

•The GRA serves as Nevada’s margin decoupling mechanism and is updated through the ARA application. Updated rates for the GRA and other regulatory mechanisms were included in the 2025 ARA application filed in November 2025 requesting to adjust the GRA rates to recover the approximate $28.2 million balance as of September 30, 2025. In May 2026, the PUCN approved an all-party settlement recommending approval of the application as filed, with rates effective July 1, 2026.

Current wording

•The GRA serves as Nevada’s margin decoupling mechanism and is updated through the ARA application. Updated rates for the GRA and other regulatory mechanisms were included in the 2025 ARA application filed in November 2025 requesting to adjust the GRA rates to recover the approximate $28.2 million balance as of September 30, 2025. In May 2026, the PUCN approved an all-party settlement recommending approval of the application was filed, with rates effective July 1, 2026.

Previous wording

•The DEAA currently facilitates the return of previously over-collected purchased gas costs to customers and serves as the mechanism to collect under-collected purchased gas costs from customers. The implementation of a DEAA credit of $0.20000 per therm applicable to southern Nevada customers and a credit of $0.25000 per therm applicable to northern Nevada customers became effective July 1, 2025. Subsequent quarterly adjustments, including those in October 2025, January 2026, April 2026, and July 2026 have been calculated consistently with the statutory rate cap of 2.5 cents per quarter, resulting in an increased credit rate of $0.30000 in southern Nevada and $0.35000 in northern Nevada, as of July 1, 2026. The over-collected PGA balance that existed at December 31, 2025 has been reduced to an over-collected balance of approximately $166.6 million and $31.5 million in southern and northern Nevada, respectively, at June 30, 2026. The most recent modification of the DEAA is expected to impact near-term liquidity at Southwest Gas when compared to earlier projections over 2025-2026 while modestly reducing interest expense on a net basis.

Current wording

•The DEAA currently facilitates the return of previously over-collected purchased gas costs to customers and serves as the mechanism to collect under-collected purchased gas costs from customers. The implementation of a DEAA credit of $0.20000 per therm applicable to southern Nevada customers and a credit of $0.25000 per therm applicable to northern Nevada customers became effective July 1, 2025. Subsequent quarterly adjustments, including those in October 2025, January 2026, April 2026, and July 2026 have been calculated consistently with the statutory rate cap of 2.5 cents per quarter, resulting in an increased credit rate of $0.30000 in southern Nevada and $0.35000 in northern Nevada, as of July 1, 2026. The over-collected PGA balance that existed at December 31, 2025, has been reduced to an over-collected balance of approximately $163.5 million and $25.2 million in southern and northern Nevada, respectively, at September 30, 2026. The most recent modification of the DEAA is expected to impact near-term liquidity at Southwest Gas when compared to earlier projections over 2025-2026 while modestly reducing interest expense on a net basis.

Previous wording

•Line Locate Activity Expenses Application. In January 2025, Southwest Gas filed an application with the PUCN for authority to establish regulatory accounting treatment for line locate activity expenses, allowing Southwest Gas to track the actual level of line locate costs in operation and maintenance expense and to record, in a regulatory asset or liability account, the difference between amounts incurred and the level established in the most recently concluded general rate case. In July 2025, the PUCN approved regulatory accounting treatment beginning January 1, 2025. The proposal did not include carrying charges on the regulatory account balance in order to focus solely on stemming the financial attrition experienced in between rate cases related to this work. Amounts deferred in the regulatory assets are included for consideration in the recently filed general rate case, and continuation of the regulatory accounting treatment is requested.

Current wording

•Line Locate Activity Expenses Application. In January 2025, Southwest Gas filed an application with the PUCN for authority to establish regulatory accounting treatment for line locate activity expenses, allowing Southwest Gas to track the actual level of line locate costs in operation and maintenance expense and to record, in a regulatory asset or liability account, the difference between amounts incurred and the level established in the most recently concluded general rate case. In July 2025, the PUCN approved regulatory accounting treatment beginning January 1, 2025. The proposal did not include carrying charges on the regulatory account balance in order to focus solely on stemming the financial attrition experienced in between rate cases related to this work. The approximate $2.4 million deferred regulatory assets included for consideration in the recently filed general rate case along with the continuation of the regulatory accounting treatment was approved.

Previous wording

Resource Plan. In April 2026, Southwest Gas received approval of its first triennial resource plan, filed in September 2025, pursuant to SB 281 (2023). Southwest Gas received a determination of prudency for approximately $186 million of certain significant operational or capital requirements, as defined by SB 281, during the 2026-2028 action plan period, including safety-related and system integrity management investments in southern and northern Nevada, and a proposal to commence a vintage 1984/1985 pipe replacement program in southern Nevada. The PUCN also approved the approximate $4.8 million investment over the action plan period in two new safety-related programs (the natural gas alarm pilot program and the meter protection program), including authority to establish regulatory accounting for the natural gas alarm pilot program. The natural gas alarm pilot program proposed the purchase and installation of approximately 10,000 natural gas alarms in high occupancy facilities across Southwest Gas’ southern and northern Nevada service territories. The meter protection program proposed the purchase and installation of meter snow shelters to enhance the protection of existing meters in heavy snow load areas in Southwest Gas’ northern Nevada service territory around Lake Tahoe. Southwest Gas received approval to continue its currently authorized COYL replacement program, including the annual statewide capital investment amount of $5.0 million, and associated regulatory accounting treatment beyond the current program sunset date of July 30, 2027, through the end of 2028. Southwest Gas’ customer demand forecasting methodology for the applicable three-year action plan period was approved. With respect to gas resources, the PUCN authorized a modification of Southwest Gas’ currently authorized price cap of $14/dekatherm to $18/dekatherm for RNG purchases to better align with evolving RNG market conditions and to extend its current contract term length and purchasing authority for RNG beyond the currently approved date of December 31, 2029.

Current wording

Resource Plan. In April 2026, Southwest Gas received approval of its first triennial resource plan, filed in September 2025, pursuant to SB 281 (2023). Southwest Gas received a determination of prudency for approximately $186.7 million of certain significant operational or capital requirements, as defined by SB 281, during the 2026-2028 action plan period, including safety-related and system integrity management investments in southern and northern Nevada, and a proposal to commence a vintage 1984/1985 pipe replacement program in southern Nevada. The PUCN also approved the approximate $4.8 million investment over the action plan period in two new safety-related programs (the natural gas alarm pilot program and the meter protection program), including authority to establish regulatory accounting for the natural gas alarm pilot program. The natural gas alarm pilot program proposed the purchase and installation of approximately 10,000 natural gas alarms in high occupancy facilities across Southwest Gas’ southern and northern Nevada service territories. The meter protection program proposed the purchase and installation of meter snow shelters to enhance the protection of existing meters in heavy snow load areas in Southwest Gas’ northern Nevada service territory around Lake Tahoe. Southwest Gas received approval to continue its currently authorized COYL replacement program, including the annual statewide capital investment amount of $5.0 million, and associated regulatory accounting treatment beyond the current program sunset date of July 30, 2027, through the end of 2028. Southwest Gas’ customer demand forecasting methodology for the applicable three-year action plan period was approved. With respect to gas resources, the PUCN authorized a modification of Southwest Gas’ currently authorized price cap of $14/dekatherm to $18/dekatherm for RNG purchases to better align with evolving RNG market conditions and to extend its current contract term length and purchasing authority for RNG beyond the currently approved date of December 31, 2029.