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NV Energy customers to pay $4.27M for employee bonuses

Updated February 14, 2024 - 7:06 pm

NV Energy customers will be paying for the utility’s employee bonuses, despite concerns raised by the state consumer advocate that the level of bonuses are higher than what was earned.

In a meeting on Tuesday, the Public Utilities Commission ordered NV Energy customers in Southern Nevada to cover bonus pay for the utility’s employees that are either managers or lower level positions at a higher level than NV Energy’s internal performance metric. This decision on bonus pay was as part of changes to the NV Energy’s general rate.

The bonus pay is based on how the company meets its target goals, for example bonuses would be higher if the company meets 100 percent of its goals versus if it meets 50 percent of its goals. The approved level of bonus pay for mid and low level employees is 95 percent despite NV Energy only meeting 56.9 percent of its goals.

NV Energy originally calculated that the bonus pay level would cost about $5.75 million. That dropped to $4.27 million after Tuesday’s decision and now makes up just 0.4 percent of the revenue NV Energy receives from its Southern Nevada general rate, said Meghin Delaney, a spokesperson for NV Energy. She also said the average residential NV Energy customer will pay about 33 cents a month towards these bonus payments.

The utility hasn’t specifically disclosed the percentage or how much of a bonus an average worker could receive but said they are “performance based.”

The bonuses help build up NV Energy’s workforce, Delaney said.

“Many costs are included in rates paid by customers, including the salary and benefits for NV Energy’s workforce,” Delaney said in an emailed statement. “That is not unlike other businesses – which also factor in employee salary and benefits to costs of goods and services. To ensure NV Energy can attract and retain talent, its salary and benefit programs provide a total compensation package that is at the median level of what an employee could receive at another company.”

This approval comes after the Bureau of Consumer Protection objected that it’s not prudent for customers to pay for a higher percentage of bonuses than what percentage of goals were achieved by NV Energy.

Commissioner Randy Brown authored the order approving the bonus pay, saying it helps reward high performing employees and can help NV Energy retain a strong labor force. Brown also said NV Energy employees are under compensated in the utility industry.

“An obvious connection exists between compensation and successful recruitment and retention of qualified and talented personnel, making it reasonable for the Commission to allow recovery of the costs of modest compensation enhancements for the positions identified,” Brown said in a written draft order he wrote.

Another concern raised by Brown was that lowering the level of bonus pay could harm NV Energy’s customer experience and make it harder for the company to meet its goals in the future.

The decision to approve the higher level of bonus pay was 2 - 1, Commissioner Tammy Cordova objected to the higher level of pay due to NV Energy not meeting 95 percent of its goals.

“A large component of the cost of (bonus pay) is included in rates but the component of (bonus pay) that was not earned and should not be included in rates,” Cordova said during the PUC meeting. “NV Energy designs the scorecard, determines the scoring and issues the awards. Ratepayers should not be responsible for costs beyond those that the employees have earned.”

Commissioner Hayley Williamson approved the higher level of bonus pay and said the amount that customers pay in their rates towards bonus pay is “de minimis” and won’t have a serious impact on their bills.

Contact Sean Hemmersmeier at shemmersmeier@reviewjournal.com. Follow @seanhemmers34 on X.

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