LIOB Meeting June 7, 2006 Southwest Gas Corporation CaliforniaLow-Income Assistance Programs Overview

Southwest Gas Corporation (Southwest) Presentation Outline R  Company Overview  CARE Program  LIEE Program  Current/Proposed Budgets  Public Purpose Program Surcharge  Concerns

Southwest’s Three State Service Area 1.7 million customers in Arizona, Nevada and California as of December % 36% 54% R = California Service Territories (not to scale)

Why Southwest is a Unique California Utility R  Approximately 170,000 customers statewide Residential – 95%Residential – 95% Other – 5%Other – 5%  Multi-jurisdictional with varied climate zones Southern California: Barstow, Victorville, Big Bear and NeedlesSouthern California: Barstow, Victorville, Big Bear and Needles Northern California: Lake Tahoe and TruckeeNorthern California: Lake Tahoe and Truckee  Overlap with both large and small electric utilities  Southwest was the only Small and Multi-jurisdictional Utility (SMJU) included in the Winter Initiative

California Alternate Rates for Energy (CARE) Program R  Southwest customers qualify at 200% of the Federal Poverty Income Guidelines  20% discount to qualifying customers  CARE is a self-certification program with recertification every two years  Outreach: Applications distributed annually as bill inserts (English/Spanish)Applications distributed annually as bill inserts (English/Spanish) Targeted Mailings, Posters, Flyers, and Spanish Newspaper AdsTargeted Mailings, Posters, Flyers, and Spanish Newspaper Ads  Increased enrollment: Data share, capitation, and online applicationData share, capitation, and online application Phone enrollment (winter 2005/2006 only)Phone enrollment (winter 2005/2006 only)

CARE Participation R  Current CARE customers = 39,052  Estimated eligibility: Southern California = 35% to 40% of primary residentialSouthern California = 35% to 40% of primary residential Northern California = 8% to 10% of primary residentialNorthern California = 8% to 10% of primary residential

Low-Income Energy Efficiency (LIEE) Program R  Southwest customers qualify at 175% of the Federal Poverty Income Guidelines  Weatherization including appliance replacement and energy education completed as defined in the: California Weatherization Installation Standards manualCalifornia Weatherization Installation Standards manual California Policy and Procedures manualCalifornia Policy and Procedures manual  Southwest’s contractors assisted 738 homes in 2005 Northern California – Richard Heath and Assoc./Project GONorthern California – Richard Heath and Assoc./Project GO Southern California – Community Action Partnership of San Bernardino CountySouthern California – Community Action Partnership of San Bernardino County  Partner with additional weatherization programs  Inform and enroll customers on CARE

Current/Proposed Budgets R  Pursuant to D Southwest filed a two-year budget application for its low-income assistance programs on June 1, 2006  CARE benefits are expected to more than double from 2005 to 2007 TOTAL CALIFORNIA CARELIEETOTAL D authorized$4,113,191$941,980$5,055,171 Per Year – 2005 and 2006 A ___ proposed$8,943,330$1,080,000$10,023,330 Per Year – 2007 and 2008

Public Purpose Program (PPP) Surcharges Southwest’s PPP Surcharges Total 2005 Authorized PPP Surcharges Northern California Southern California $ $ Authorized PPP Surcharges Northern California Southern California $ $ Projected PPP Surcharges Northern California Southern California $ $ R

Southwest’s Concerns R  Administration challenges due to varied income guidelines for CARE and LIEE CARE: Southwest at 200% vs. Other Small Utilities at 175%CARE: Southwest at 200% vs. Other Small Utilities at 175% LIEE: Southwest at 175% vs. Large Utilities at 200%LIEE: Southwest at 175% vs. Large Utilities at 200%  High percentage of residential customers eligible for CARE  Southwest’s CARE portion of the PPP surcharge is increasing rapidly as non-CARE customer base that pays this portion of the surcharge decreases

R Questions