Southwest Gas to buy South Lake Tahoe's Avista Utility

SOUTH LAKE TAHOE - Las Vegas-based Southwest Gas Corp. will buy South Lake Tahoe's natural gas distribution property owned by Avista Utilities for $15 million, officials from both companies disclosed Wednesday.

The deal will take six months to a year to complete and will need the approval of the California Public Utilities Commission. It will affect about 18,000 customers in the South Lake Tahoe and Meyers areas, officials said.

"This acquisition is in the best interest of the company and its customers," said Jeff Shaw, Southwest Gas chief executive officer. "Southwest Gas has been serving much of the Lake Tahoe Basin for 40 years, and the South Lake Tahoe community is contiguous to existing Southwest Gas service territories. We want to assure our new customers that they will receive our continued commitment to provide safe, reliable natural gas service."

The Nevada-based utility currently serves about 30,000 customers in the Lake Tahoe Basin and Truckee.

In 1991, Avista, based in the state of Washington, acquired the South Lake Tahoe distribution from CP National.

"As we continue our strategy to focus on our core business and rebuild our financial strength, this transaction simply makes sense," said Scott Morris, president of Avista Utilities. "As we've indicated, we are primarily focused on building our business in the Northwest. The South Lake Tahoe properties are isolated form the rest of our system and it's the only area we serve in California."

Seven Avista employees work in the South Shore office. The employees may or may not be given options to reapply for jobs with Southwest Gas, said company spokesman Roger Buehrer.

"Until we can further study what our needs will be, whether those seven individuals will be employed has not been determined," Buehrer said.

There may be job opportunities within Avista for the seven employees, but it would mean relocating, Buehrer said, adding he had heard the company is considering making the employees offers.

An Avista spokesperson was unavailable for comment.

After undergoing a 40 percent rate hike in March for its northern California gas customers, Southwest Gas says it has no immediate plans to hike rates for its South Lake Tahoe customers after the acquisition.

"We are going to assume the current rate structure of Avista. Their rates, at least at this point, will not change unless Avista has a change between now and then," Buehrer said.

The average summer bill for Avista customers is about $34.80. In winter it is $96.13.