"It's a very important issue," said Swami Venkataraman, a utilities analyst for Standard & Poor's. "People are going to be paying more money."

In May, Las Vegas-based Southwest Gas Corp. asked the state Public Utilities Commission for a 2.8 percent residential rate increase to recover $11.3 million in past gas costs. That increase would push the average customer's winter bill higher by about $1.37 a month.

To meet higher natural gas costs in future months, however, the company would need to increase annual revenue by $53.5 million, pushing the average residential winter bill up by $6.50, or 13.4 percent.

Some utility experts have indicated, however, that given more recent increases in natural gas prices the utility could need an even higher increase to keep up with the market.

In November, regulators approved a $30.6 million rate increase for Southwest Gas. It was the fifth jump in Southern Nevada natural gas bills in 12 months.

In that case, the PUC elected to favor projected rates proposed by PUC staff instead of historical rates proposed by the utility. The move nearly doubled Southwest Gas' original request for a rate increase of $16.3 million, or 4.9 percent.

Hearings are expected to begin Sept. 20 in that case.

For Nevada Power Co. of Las Vegas, hearings began Tuesday on the utility's plan to raise rates to accommodate higher prices for natural gas.

In June, the Las Vegas company asked regulators for permission to raise rates by $62 million annually, citing higher natural gas costs as a leading culprit in rising expenses.

Testimony submitted prior to hearings by PUC Financial Analyst David Chairez said increases in natural gas prices since the company's initial filing indicate that the company's original filing is as much as $84.8 million too low.

Natural gas is used by the electric utility to fuel power plants. The cost of the fuel -- as well as power purchased on the open market, most of which is generated at natural gas-fired plants -- is recovered through a base-tariff energy rate. If that rate is set too low, the unrecovered balance piles up in a deferred energy account and accumulates carrying costs, such as interest.

Chairez based his higher calculations on a jump in the natural gas futures market. Prices for a thousand cubic feet of natural gas jumped from $6.57 on May 2, just after Nevada Power made its original filing, to $7.55 on Aug. 1.

Historically, summer gas prices are as little as half those prices.

"The days of $2 and $3 gas are gone," Venkataraman said.

The U.S. Energy Information Administration said that the cost of a thousand cubic feet of natural gas during the October to March 2001-02 heating season averaged $7.41. During the same period in 2004-05, the cost was $10.50.

Given those higher costs, the average U.S. household's winter hearing costs jumped from $602 to $1,010, the Energy Information Administration said.

Nevada Power's June filing would raise the average residential customer's monthly electric bill by 3.8 percent, or $4.86, to more than $128. An $84.8 million adjustment could more than double that spike, meaning a possible monthly increase of about $10.

Businesses also are struggling to keep up with rising costs. Ray Bacon, executive director of the Nevada Manufacturers Association, said utility rates are spiking along with other prices, such as gasoline.

"Do we like to see it? No," Bacon said. "But it's a fact of life right now.

"I don't see it ending anytime soon."

Venkataraman pointed out that many utilities, like Southwest Gas and Nevada Power, have pass-through mechanisms for recovering natural gas costs. While both utilities must prove to the commission that their purchases were prudent, the companies make no profit on the natural gas. Profits are made through general rates, which include the cost of building and maintaining transmission lines and a rate of return for shareholders.

As increases continue to pile up, public pressure is likely to increase. Last week a handful of consumers turned up at a consumer session urging regulators to disallow Southwest Gas' request.

"Every year, like clockwork, the utilities have come back and said 'We need an increase, we need and increase, we need and increase,' " said Southwest Gas customer John Tabor. "We are rather demanding now that you fulfill your responsibility to keep these guys in line."

PUC Commissioner Jo Ann Kelly said at the public session that consumer concerns are taken into account.

"We realize that these are frustrating issues," she said.

As rates continue to rise, public pressure will increase on utility regulators to keep monthly bills at a manageable level. Such a prospect is a concern for analysts.

"The question then becomes how do state utility commissions handle these costs and rate increases?" Venkataraman said. "Clearly these fuel costs are beyond the control of utilities."

He added that, at this point, there has been no instances of regulators rejecting valid rate requests in an effort to protect consumers.

"We have not seen that," Venkataraman said, but he said commissions could begin other efforts from utilities to protect consumers from price spikes. Those means could include hedging strategies, which would have companies buying increasing percentages of their yearly supply early to mitigate volatility. Both Southwest Gas and Nevada Power have such plans in place.

Venkataraman also said some utilities have gone as far as purchasing natural gas fields to gain direct control over supply.

"The approaches might be very different," he said.

One thing that seems certain, Venkataraman said, is that natural gas prices are likely to remain high.

"We don't see anything that indicates natural gas prices are going to decrease in any meaningful way," he said.

Kevin Rademacher covers utilities and finance for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4069 or by e-mail at kevinr@lasvegassun.com.