Major power users seek to speak out in rate case

NV Energy's biggest general rate case in history is attracting a slew of major power users seeking to testify when hearings begin on the $323.9 million rate increase proposal.

A group representing MGM Mirage, Wynn Resorts Ltd., Station Casinos and Boyd Gaming Corp. was one of the major parties that showed up Wednesday for a preliminary hearing on the rate case, which calls for a 17.5 percent increase in residential rates.

Public Utilities Commissioner Sam Thompson said it is the largest general rate case in the history of Nevada Power Co., which now does business as NV Energy. The $922 million energy rate case decided in 2002 was larger, but that case dealt only with the cost of fuel and wholesale power which skyrocketed during the energy crisis, not the cost of plants, operations and profits.

Because the commission's offices are too small to accommodate everyone who wants to attend hearings on the rate case, Thompson asked NV Energy to find a bigger location for the next meeting. The commissioner tentatively scheduled a consumer comment session at the Las Vegas Convention Center on April 6.

"I expect and would like to have full public participation," Thompson said.

State consumer advocate Eric Witkoski, noting the state's 9.1 percent unemployment rate, said: "Because of the economic times, there's significant interest and concern about the rates."

Among the large power users seeking permission to participate in the rate case is the Southern Nevada Hotel Group, which includes the four major casino-hotel operators.

Public Utilities Commission Chairwoman Jo Ann Kelly, who is a member of the Boyd family and holds common stock in Boyd Gaming, said she would not participate in the rate case because she wants to avoid concerns about conflicts of interest.

"It's important that people have confidence in the system," Kelly said.

She said she was sure that Thompson and Commissioner Rebecca Wagner will decide the case fairly and professionally.

Other large parties that want to participate are the Southern Nevada Water Authority; Kroger Co., which does business in Las Vegas as Smith's Food & Drug Stores; the Department of Energy; Wal-Mart and Sam's Club; the Nevada System of Higher Education; hospital operator Valley Healthcare Systems; and the city of Henderson.

Many of the groups want to argue about the design of the proposed rates, which determines how much each class of customer will pay of the rate increase.

The city of Henderson, however, hired attorney Robert Marshall to oppose a commission staff proposal to collect a surcharge from Henderson customers to offset a fee that the city charged the utility.

When the electric utility company sought a permit for a transmission line, Henderson officials required a $2 million payment for park improvements, although the park was unrelated to the power line, according to written testimony of Anne-Marie Cuneo, an analysis manager at the commission.

Henderson was the only local government that demanded a payment for the power line, she said.

"It is unfair to citizens located in the other areas of (NV Energy's) territory who didn't attempt to wring additional funds (from the utility)," Cuneo wrote.

Cuneo proposed that NV Energy collect surcharges totaling $3.02 for each of Henderson's 120,000 customers. The surcharges would offset $360,000 of the fee, and the commission could impose another surcharge for the balance in the next utility rate case.

At the Wednesday conference, Thompson said he wanted legal analysis from rate case participants on NV Energy's proposal to delay the rate increase from the July 1 rate case implementation date specified in state law to Sept. 1. The presiding officer also sought legal opinions on discounted rates for low-income customers.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.