Southwest Gas Holdings Inc. Great Basin Capex Raised; Regulatory Transformation Underway; 2Q Matches

Research evidence excerpt

J P M O R G A N

North America Equity Research

05 August 2026

Southwest Gas Holdings Inc.

Great Basin Capex Raised; Regulatory Transformation

Underway; 2Q Matches

Overweight

SWX, SWX US

Price (04 Aug 26):$89.05

North American Utilities

Great Basin capex bumped; LT guidance refresh in February. As expected,

SWX delivered a meaningful Great Basin scope update, now seeing ~1 bcf/d

of contracted demand for the 2028 expansion (0.6bcf/d previously), with the

project now sized at 48-inch pipe (42-in previously). Estimated capex rises to

~$2.3bn (from $1.7bn), with projected annual incremental margin of $270–

$300mm post-ISD (versus $215–$245mm previously). The 48-inch design

decision aligns with expectations, as upsizing meaningfully expands

theoretical capacity while lowering compression requirements and preserving

phase 2 optionality for the 2029–2035 period. On that front, an additional ~1.8

bcf of expressions of interest remain outstanding for future phases, which

management continues to work toward converting into binding agreements.

The FERC CPCN application remains on track for a 4Q26 filing, with field

surveys, public outreach, and engineering work progressing as planned.

Overall, the $2.3bn project represents a step-up in capital deployment and

margin contribution versus prior expectations, and the updated figures will

flow into formal long-term guidance at the February planning refresh.

CA rate case constructive; NV and AZ regulatory execution advancing.

CPUC issued a decision approving the non-cost-of-capital components of

SWX's CA general rate case, providing ~$40mm of incremental annual

revenue and triggering recognition of ~$9.7mm of net income in 2Q related to

previously deferred 1Q revenue. The remaining cost-of-capital component

proceeds with a final decision expected in August, representing the last open

item on the CA case. In NV, SWX filed certification materials for the GRC,

increasing the requested annual revenue increase to ~$74mm (from ~$71mm

at filing) to capture additional post-test-year plant, with rates anticipated

effective October 2026. The NV Triennial Resource Plan also received PUCN

…