NV Energy to change the way it bills customers, starting in April

Southern Nevadans will pay a first-of-its-kind demand charge on electric bills beginning in April.

NV Energy received approval Tuesday from the Public Utilities Commission of Nevada to implement a residential and small commercial daily demand charge, which will appear on bills beginning April 16. NV Energy will become the first investor-owned utility to impose a mandatory demand charge on residential and small commercial customers. Currently, only larger customers like casinos have to pay demand charges.

The public utility also received approval to increase its annual revenue of $2.42 billion by “less than two-thirds” of the originally requested $224 million. NV Energy requested an increase to recover investments it made into its infrastructure.

NV Energy has until Oct. 1 to calculate final rate adjustments, said an NV Energy spokesperson.

Demand charge

Normally, utilities charge customers per kilowatt hour, amounting to the bill at the end of the month.

The demand charge would completely change that, using a two-pronged billing strategy: how many kilowatts a customer used during their highest 15-minute period of usage combined with the typical per kilowatt hours used each month. But, in April, the per kilowatt hour charge will go down to account for the demand charge.

For example, a customer could use 8 kilowatts one day between 6:15 p.m. and 6:30 p.m. by running the air conditioner, fans and washing machine all at once. According to the draft order from the PUCN on the demand charge, NV Energy plans to charge 18 cents per kilowatt for residential customers. So, in multiplying 18 cents by 8, that equals $1.44, which will be the demand charge for that day.

At the end of the month, each daily demand charge will be added together to get the total demand charge for the entire month.

According to the utility, the new charge would encourage customers to spread energy usage of high-demand appliances, such as clothes dryers and pool pumps, throughout the day. If a customer uses too much energy at one point in the day by using a high-demand item, the demand charge for that day will increase.

Customers and energy activist groups have admonished NV Energy for the demand charge, calling it “complex” and “convoluted.”

“Many Nevadans are already struggling to make ends meet, let alone deciphering increasingly convoluted utility bills,” said George Cavros, Nevada clean energy manager and senior attorney at Western Resource Advocates. “A mandatory residential demand charge is a blunt instrument for designing bills, not well understood by customers, and one that will set back smart rate design and decarbonization efforts in Nevada.”

During a consumer session on June 5, Marlon Anderson, an NV Energy customer of 17 years, said the demand charge “seems designed to confuse and punish regular people.”

“Bills are already hard to predict,” said Anderson. “Adding a new layer of complexity will make things worse, especially for senior citizens, low-income families and people living paycheck to paycheck, raising our bills to boost shareholder profits while undercutting solar access is the definition of corporate greed.”

The utility will hold “robust customer education and communications plan” in regards to the demand charge, said the utility in a news release.

Contact Emerson Drewes at edrewes@reviewjournal.com. Follow @EmersonDrewes on X.