Power-rate session lures almost no consumers

Ratepayers had little to say Wednesday about a power-rate case that won’t change their bills.

Just two consumers showed up to testify Wednesday at a public session the Public Utilities Commission of Nevada held inside Cashman Center to discuss a pending NV Energy rate case.

The case combines multiple rate types, and its net effect on residential power bills would be zero. Among all users, including residential, commercial and industrial power users, the overall effect would be a 4.2 percent rate drop.

A staffer with the state Bureau of Consumer Protection told the Review-Journal after the meeting that consumer turnout is typically scant when rates drop or stay steady.

But Barry Gold, director of government relations, lamented the small turnout in his speech to the commission, saying no case is insignificant.

Gold also commended NV Energy for considering how the case would affect families, but he asked the commission to “judiciously consider” this case and all other actions before it.

“Nevada is first in the country for foreclosures, and first in unemployment. We do not want to become first in the country for electricity shutoffs,” he said.

The only other consumer to attend the session was more concerned about renewable energy.

Barbara Lake, of Kyle Canyon, had nothing to say about the rate case, commenting instead on the seemingly slow pace of green-energy development.

“I just wondered why we can’t get solar here in Las Vegas,” Lake said. “It’s so frustrating, I just want to scream sometimes. We have so much sunshine here. I want it so bad. I’m 78 and I’m a teacher, but I don’t think I’ll live long enough to see you guys do anything with it.”

Commissioner Rebecca Wagner told Lake there’s “movement” on solar power, but she said she understood Lake’s frustration. Nevada law requires NV Energy to add renewable energy to its portfolio every year through 2025, when it must obtain 25 percent of its electricity from green sources.

As for that more immediate rate case, it involves two separate rates that will cancel each other out.

Here’s how the filings counter each other: NV Energy owes consumers $98.7 million in fuel costs that it overcollected. Its first filing calls for refunding ratepayers that money, plus charges and rates related to renewable-energy development and programs. But its second filing calls for offsetting those differences by seeking $95.8 million in revenue the utilities commission removed from the company’s 2008 general rate case.

If it sounds confusing, keep in mind that the filings involve two separate types of rates. The first involves the cost of purchased power and fuel NV Energy buys to run its plants. The utility must pass those expenses, which make up about 60 percent of a power bill, directly to ratepayers without profiting. Because the cost of the natural gas that powers NV Energy’s generating stations has fallen since the last fuel-rate case, the company overcollected by $98.7 million.

The second application deals with revenue left over from the utility’s general rate case. General rates compose the other 40 percent of an electric bill, and cover operating expenses such as new construction, maintenance, labor costs, debt interest, taxes and investor returns. In NV Energy’s last general rate case, decided in June 2009, the Public Utilities Commission carved $95.8 million out of the company’s requested revenue increase to blunt the effect on consumers. That deferred revenue sits in a regulatory-asset account, where it’s collecting interest, until NV Energy’s next general rate case rolls around in 2011.

NV Energy said taking the deferred revenue now and balancing it against the fuel-cost refund would eliminate interest expenses that would pile up between now and its 2011 general rate case. It could also mean a smaller change in general rates later.

The commission will hold hearings in the case on Aug. 9 and render a decision by the end of September. The rates would take effect Oct. 1.

The commission was scheduled to hold a separate consumer session in Reno today, and a labor union said it planned to picket the event.

The International Brotherhood of Electrical Workers said it would join NV Energy employees and retirees to challenge “service cuts” and executive pay.

“Although we support the proposed — albeit short-term — rate reduction, the real issue is what NV Energy is doing with customers’ money,” said Randy Osborn, business representative for the union’s local chapter. “NV Energy executives are showering themselves with excessive bonuses and CEO Michael Yackira is making $4.5 million in compensation all while closing almost all local customer-service offices, reducing its work force and, in some cases, moving crews far from the local communities they are supposed to serve.”

The union bought a full-page ad in Wednesday’s Las Vegas Review-Journal and has picketed outside the utility’s headquarters on West Sahara Avenue. Its members say they’re protesting cuts in retiree health benefits and reductions in the company’s work force.

NV Energy representatives responded that they wouldn’t bargain in rate-case hearings.

“Like the one in Las Vegas, the Reno consumer session is for our deferred energy filing, which includes both electric and gas decreases of 10 percent and 5 percent, respectively, for Northern Nevada,” a representative said in a statement. “A consumer session is not a forum for contract negotiations.”

Contact reporter Jennifer Robison
at jrobison@reviewjournal.com or 702-380-4512.

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