Updated June 9, 2023 - 4:12 pm
NV Energy is requesting regulators’ approval to raise all Southern Nevada customers’ electric rates by an average of 3.3 percent starting in 2024.
The rate for the average single family home would increase by 2.68 percent, or $5.52 monthly, under the general rate case application filed this week with the Public Utilities Commission. Multi-family residential customers would see a 1.21 percent increase, which would boost their monthly bill by $1.36.
NV Energy is also proposing to increase the basic service charge for customers by $6 from $12.50 a month to $18.50. In a news release NV Energy stated the increased basic service charge increase would “better align” the costs incurred by providing electric service to customers.
While NV Energy is proposing an average rate increase of 2.52 percent across all classes of residential customers, distribution-only customers — those who buy their power outside of NV Energy but still pay the utility for transmission services — could see a much heftier increase of 81.01 percent across its classes. Some distribution-only customers include Switch Inc., MGM Resorts International and Caesars Entertainment.
NV Energy is also proposing to increase its street lighting rates by 44.24 percent.
The increases, if approved, would net NV Energy an additional $92.7 million in annual revenue, according to its filing.
NV Energy is also requesting the PUC increase its return on equity, or how much the company can profit, from 9.4 percent to 10.2 percent.
NV Energy defended the proposed increase to its return on equity as necessary to meet the capital investment needs for state renewable energy goals and to respond to the current economic environment of increased inflation and rising interest rates.
“A higher (return on equity) mitigates the risk of financial and operational pressures as it generates more liquidity to support the invest needs,” Mike Behrens, the chief financial officer for NV Energy, said in filed testimony. “Lack of liquidity and resulting cash constraints could pose an operational risk.”
The utility stated the increases it is requesting would modernize its infrastructure, support growth and protect against threats.
“The investments we make to provide power for our customers are critical to ensuring that families and businesses have reliable, affordable and sustainable power, especially during the hot summer months,” Doug Cannon, NV Energy CEO, said in a statement.
“NV Energy’s request is the first Southern Nevada increase since 2011 and is significantly less than the current cost of inflation,” Cannon added. “The upgrades we’ve made to our system in Southern Nevada improve reliability, modernize our infrastructure and support growth. NV Energy works hard to provide our customers low-cost energy services that are below national average electric rates and more than 50 percent cheaper than those paid in California.”
By Nevada law, a general rate case application like the one NV Energy filed must be sorted out within 210 days, meaning the PUC would have to issue an order on the application before the end of the year. NV Energy wants the PUC to issue a ruling by Dec. 12.
The general rate case process does allow for public comment and intervenors to provide testimony on the prudency of the application.
The changes sought in a general rate case cover the company’s capital costs and undergo a more intensive review than quarterly rate changes made for recouping energy costs. NV Energy has filed numerous quarterly rate increases over the last year, although it has requested a slight rate decrease for the upcoming quarter.