Southern Nevada electricity consumers will not see a rate hike next year, marking the first time in decades that ratepayers have managed to duck an NV Energy-proposed rate increase.
Regulators and consumer advocates on Thursday cut a deal with the Las Vegas-based utility that will see consumers avoid some $37 million in company-requested new rate revenue, a monthly savings of almost $4 on what would have been the average Southern Nevada resident’s bill.
NV Energy officials had sought a relatively meager 1.85 percent rate hike in May, down 6 percent from the company’s last approved rate increase.
That was before the utility proposed plans to pay down an estimated $300 million in sunk costs associated with the 2017 shutdown of the Reid-Gardner coal-fired power plant near Moapa, tacking requests for an additional $17.8 million in revenue on to a rate request amendment filed last month.
Regulators and consumer watchdogs have spent the past several weeks fighting that amendment, eventually talking utility officials all the way down to a deal that “should not result in a bill change” for the average residential consumer, according to Dan Jacobsen, technical staff manager for the Nevada Bureau of Consumer Protection.
“I don’t think there is any bad news here for consumers,” Jacobsen said Thursday. “I think the company realizes that people are still struggling in Southern Nevada and they don’t want to put more pressure on them.
“This hasn’t happened in Southern Nevada since the 1970s, so it’s a very positive thing.”
NV Energy declined to comment on the agreement until after the Nevada Public Utilities Commission sits down to review the proposal next week.
Ratepayers may still have to pick up some of the tab for the company’s gradual, state-mandated exit from Reid Gardner, though perhaps not until utility officials file another rate request in 2017.
General rate cases are brought before the state utilities board every three years.
Meanwhile, residential consumers look likely to pay an extra $2.75 a month in fixed monthly fees, an uptick expected to be offset by a proportional decrease in per-kilowatt-hour charges.
The typical household customer’s bill, based on average use of 1,141 kilowatt hours a month, had been in line for a $5 bump in fixed monthly charges.
NV Energy will recover more than $43 million in costs associated with fixing its legally troubled One Nevada transmission line to Northern Nevada as part of a preliminary deal filed with the state utilities board on Thursday.
A proposed prepayment program known as “FlexPay” also survived the settlement submitted to utilities commissioners.
Jacobsen and other consumer advocates say the program, if approved, would allow consumers to skip a customary utility service deposit but would also allow NV Energy to cut off service to enrollees who are in arrears.
Utility officials use the average of the previous year’s service charges to determine deposits on residential accounts. They charge a flat $100 deposit on accounts without a previous service history.
FlexPay critics fear such a program could have a disproportionately negative effect on poor ratepayers more susceptible to late payment charges and back-end fees. Company officials have agreed to put the fledgling program on hold pending a utilities board investigation into the effort.
The company, if deprived of additional ratepayer revenue until 2017, will have to look to concessions and operational efficiencies to chip away at costs associated with its transition away from coal-fired electricity production.
A copy of the utility’s proposed settlement with consumer advocates indicates executives may have to absorb millions of dollars invested in its smart grid and transmissions program.
Nevada Consumer Advocate Eric Witkoski said NV Energy officials also plan to pony up around $10 million a year to help chip away at the unrealized $300 million investment in Reid Gardner.
Those contributions will come in handy, he said, when it comes time to again hash out proposed rate hikes with utility officials in 2017.
“Reid Gardner will get paid for over time,” Witkoski said Thursday. “Some of will be paid for now, some of it later, but that $10 million a year will make it a lot more manageable.
“I don’t want to speculate on whether or not there will be a rate increase in 2017. … In a rate case, some things go up and other things go down, but a zero revenue increase is always one of our goals.”
State utility commissioners still must approve the proposed settlement between NV Energy and consumer advocates, a decision Witkoski said the three-member governor-appointed board could take on as soon as Wednesday.
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