Increase in power rates cut … barely

State regulators trimmed Nevada Power Co.'s rate increase on Thursday, but most customers probably won't notice any difference.

The Public Utilities Commission voted to cut $1 million from the $116 million annual electric power rate increase that became effective June 1. The $1 million represents less than 1 percent of the rate increase.

"It won't make much difference," said Eric Witkoski, chief of the attorney general's Bureau of Consumer Protection. Witkoski, nevertheless, thought his staff should seek the adjustment.

Commission Chairman Don Soderberg agreed and said, "A million dollars is a million dollars."

The reduction results from a decision to have Nevada Power compensate customers for profits it received from the sale of real estate on Flamingo Road over four years, rather than extending the pay-back period to five years.

The commission, however, refused to lower the return on equity that Nevada Power is allowed to earn to 10.5 percent from 10.7 percent, as suggested by the bureau. That change would have sliced another $4 million from the rate increase, Witkoski said.

Return on equity is a measure of profitability. It is calculated by dividing annual profit by stockholder's equity in the utility.

Witkoski said he has not decided whether to appeal the return on equity issue. "An administrative agency (like the utilities commission) does have a lot of latitude," he said.

The commission also:

* Approved a change in Nevada Power's Integrated Resource Plan so the utility can enter 20-year purchase power contracts with Enel North America for two geothermal power plants, which use hot underground water to generate electricity. Enel Salt Wells will produce 166.9 megawatts of electricity and Enel Saltwater will create 33.5 megawatts of power.

* Accepted an agreement among interested parties on renewable energy program from Avista, which supplies electricity to Barrick Goldstrike Mines. Avista tried but was unable to obtain all the solar power it sought to meet the state's renewable energy requirements, said Commissioner Rebecca Wagner. Barrick intends to build a 1 megawatt, solar photovoltaic plant in August so that it can comply with the law.

Soderberg, who served as commission chairman for the last eight years, attended his last commission meeting. He thanked the commission staff and other commissioners for their help during his tenure.

Commission Jo Ann Kelly becomes chairwoman today. Sam Thompson will complete Soderberg's term on the commission.