CARSON CITY – NV Energy south filed a general rate request with the Nevada Public Utilities Commission on Friday that reflects one of the smallest increases to customers in more than a decade.
The increase, if approved by the commission after public hearings, seeks a 0.9 percent overall increase across all rate classes, or about $20.8 million. It would take effect Jan. 1 if approved by the regulatory agency.
The effect of the increase would be about 1.85 percent, or $2.82 a month for an average residential customer in Southern Nevada. This is based on a typical residential customer bill of $152.97 with an average use of 1,136 kilowatts a month.
The last rate increase approved by the PUC for the company was 8.26 percent.
“I am very pleased with this modest rate request,” said Paul Caudill, president of NV Energy. “The team at NV Energy has worked very hard to implement programs that help us from an efficiency perspective and our customers will be the benefactors of that.”
But one element of the filing, a proposed increase in the basic service charge from $10 to $15.25 a month, concerns Nevada Consumer Advocate Eric Witkoski because of the effects on low-income power customers.
Low income customers who try to reduce their bills by using less electricity will not get as much benefit with the more than 50 percent hike in the fixed charge, he said.
Dan Jacobsen, technical staff manager for the office, said the decision by NV Energy to raise the fixed charge is completely subjective. The company could choose to cover its increased costs through a kilowatt hour increase, he said.
“For a lot of customers who have very high consumption it may not be that big of a deal,” Jacobsen said. “But for the poorest customers who are trying to reduce their electricity use, no matter how much they conserve, they will still pay more.”
Witkoski said it will be an issue for the office as the PUC reviews the filing. He noted that service charges in other states are lower because of the effects on low-income customers.
Shawn Elicegui, vice president of regulation for NV Energy, said the effect of the service charge increase for residential customers will be to stabilize customer bills, with slightly higher charges in the winter and slightly lower charges in the summer.
The justification for the rate increase includes large investments to enhance efficiency and improve customer service, Caudill said.
The company has also added nearly $1 billion of gross plant since the last general rate case filed three years ago, yet the increase is less than 1 percent. The improvements include the One Nevada Transmission Line connecting Northern and Southern Nevada, the NVEnergize smart meter/smart grid program and the Beltway Operations Center.
Despite the investment, Elicegui said efficiencies, such as the smart-meter program called NVEnergize by the company, have allowed for the modest rate request.
The company has saved $25 million across the state with the smart-meter program because of lower operating expenses for labor, fleet and fuel, he said.
Southern Nevada businesses will be affected differently based on their size. The utility’s 77,000 general service customers will see a 1.86 percent increase in rates, while the 27,250 large general service customers that have larger demand will see a 2.1 percent reduction.
The utility’s single family residential customers total 506,000, and multifamily residential total 250,500.
The impact of the rate proposal varies by the multiple different customer classes.
NV Energy Inc. provides a wide range of energy services to 1.3 million customers throughout Nevada and nearly 40 million tourists annually.
NV Energy is a holding company whose principal subsidiaries, Nevada Power Co. and Sierra Pacific Power Co., are doing business as NV Energy. The company is headquartered in Las Vegas.
Contact Capital Bureau reporter Sean Whaley at firstname.lastname@example.org or 775-687-3900. Follow him on Twitter @seanw801.