Nevada Power to reduce rates 7.5 percent Aug. 1

Southern Nevadans will see their power bills drop about 7.5 percent beginning Aug. 1, the Public Utilities Commission disclosed Tuesday.

The rate decrease, which was made by Public Utilities Commissioner Sam Thompson on Friday but wasn't posted until Tuesday, will reduce the typical residential customer's electric power bill about 7.5 percent, or $19.32 per month, based on use of 2,200 kilowatt hours of electricity per month.

The reduction will mean the typical customer's bill will be $239.64 in August when air conditioning use drives up power consumption, according to calculations by the attorney general's Bureau of Consumer Protection.

Bureau chief and consumer advocate Eric Witkoski said the reduction will help consumers this summer when power bills are typically at their highest and while Southern Nevada is in the midst of an economic slump.

"According to your economic definition, we're either in a recession or bordering on a recession," Witkoski said. "We're trying to do the best we can to help people manage their bills" as prices for gasoline and food skyrocket.

Witkoski's bureau had urged the commissioner to lower rates a month earlier to help consumers.

Nevada Power wanted to delay the rate reduction until Oct. 1, because natural gas prices are soaring and the company will need to raise rates later to compensate for the higher fuel costs, said Michael Yackira, CEO of Nevada Power parent Sierra Pacific Resources.

"We didn't want (rates) to go down and up again (later)," Yackira said.

Thompson, however, rejected both motions and decided to stick with the Aug. 1 start date that the commission had approved earlier.

Had the higher rates been continued until Oct. 1, Nevada Power would have collected $93 million more than its actual past fuel and power expenses, according to commission staff calculations.

By Aug. 1, the company is expected to have collected $55 million more for past expenses than it has spent for fuel and power, according to the commission's staff.

Even if the rate reduction began July 1, the utility would have collected $36 million more than it spent on fuel and power in earlier periods.

While customers would benefit from the over collections through lower bills later if the rate cut was delayed, Witkoski argued that consumers needed relief from high summertime rates as soon as possible.

He noted that quarterly rate changes made to reflect fuel and power expenses will decline $1.10 on July 1 for the typical consumer. Then, on Aug. 1, the additional $19.32 rate reduction will become effective.

Regulators now require Nevada Power to adjust the portion of its rates that is based on past fuel expenses every three months.

Yackira and other executives said the Aug. 1 rate adjustment is part of a bigger case on rates for fuel and purchased power, which remains pending. Power rates are expected to be adjusted again on Oct. 1.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.