Local power rates will jump 3.4 percent July 1 after a ruling Monday from the Public Utilities Commission of Nevada.
The commission approved the rate boost to allow NV Energy to recover costs related to energy-efficiency programs. The increase will add $5.29 to the average monthly power bill, though NV Energy officials said Monday afternoon that a 1.7 percent rate decrease involving fuel and purchased-power costs will also take effect July 1, halving the rate increase’s effect on power bills.
The rate hike fell short of NV Energy’s 5.3 percent initial request. Utility officials said the company needs the higher rates to pay for $71 million in energy-conservation programs, such as low-income weatherization initiatives and collection of old refrigerators, and $35 million to cover lower electricity sales resulting from ratepayer conservation.
The average power use is 1250 kilowatt hours per month.
The rate case stemmed from a 2009 state law requiring NV Energy to separate the cost of energy-efficiency programs from general rates. Without the law, NV Energy would have included the energy-efficiency recovery plan in the general rate case it will file with the commission on June 1.
Eric Witkoski, the Nevada consumer advocate tasked with protecting ratepayers’ interests in utility rate cases, called the increase troubling but praised the commission’s decision-making process.
"We are very concerned about any rate increase, especially given the difficult times all consumers face," Witkoski said. "The commission conducted a thorough and deliberative process to address (NV Energy’s) request. Given the parameters from the Legislature, the commission took reasonable steps to reduce the impact on consumers."
A handful of local ratepayers attended the commission’s Monday meeting in the agency’s southwest Las Vegas office to register their thoughts on the decision. None approved of the rate increase.
"During a time of economic crisis, (NV Energy) is asking us to pay more," said Barry Gold, a representative of AARP. "They ask us to save energy, but the better we conserve, the more it’s going to cost us. We’re already first in foreclosures and first in unemployment. We don’t want to be first in electricity shutoffs too."
But commissioners said the law left them with little choice.
The final order was "about the only thing you could do," said Commissioner Rebecca Wagner said. "You couldn’t trim more and maintain the balance between shareholders and ratepayers."
Wagner added that "a confluence of events" made the decision difficult.
"Advocates at the Legislature push energy efficiency without recognizing that ratepayers are pretty much maxed out. We’ve had no load growth (increase in customers) and we have a high foreclosure rate," Wagner said.
In reducing the rate request, the commission pared the $71 million energy-efficiency program cost NV Energy requested to $58 million. Under the order, NV Energy will spend $25.5 million on demand-response initiatives such as in-home power-use displays, as well as $1.8 million to pick up older second refrigerators and $9.2 million on efficiency retrofits for commercial buildings.
The commission also pruned NV Energy’s $35 million lost-revenue request, shortening the sales-recovery time period, reducing the stated average number of hours per day that energy-efficient light bulbs run and nixing the utility’s attempt to offset revenue lost to one type of conserving customer by including unverified lower sales among another customer base.
The new rate will appear as a separate line item on consumers’ July power bills. It’ll be listed as "EEPR and EEIR," which stand for energy efficiency program rate and energy-efficiency implementation rate.
Commission Chair Alaina Burtenshaw wrote the order. The commission’s two other members, Wagner and Commissioner Luis Valera, approved it.
Contact reporter Jennifer Robison at jrobison@ reviewjournal.com or 702-380-4512.