Who should pay the biggest share of a rate increase in local power bills?
A group of attorneys, business executives and state regulators met Monday inside offices of the state’s Public Utilities Commission to decide just that, as hearings in the NV Energy rate case entered their final week.
The agenda: to pinpoint whether consumers or commercial users will pony up the larger portion of any rate gain.
Hot topics in early testimony included the number of consumers who might qualify for a rate freeze, why water-pumping stations could see rate increases of nearly 50 percent and how NV Energy came up with the residential increases it suggested.
The case outlines 32 different rates for various classes of power users, ranging from apartments and mansions to streetlights and water-pumping stations. The overall increase request is 13.6 percent, though single-family homes would see a boost of 16.7 percent, or $24 a month on the average bill.
NV Energy officials say they need higher rates to help recover $1.5 billion they’ve spent purchasing and building power plants to secure energy independence for the state.
However, nine interveners asked to intercede in the case because they want a say in how the utilities commission ends up splitting the pie. In early questioning Monday, they began trying to prove their cases before a panel featuring an NV Energy engineer, a company economist and a consultant who helps the power utility design rate structures.
Much of the question-and-answer session involved technical details such as how peak power use determines rates and whether NV Energy has added more reserve capacity than it needs. Representatives of the Southern Nevada Water Authority and the Las Vegas Valley Water District pointed out that their class faces the highest increases by far under NV Energy’s design, with some of their pumping stations staring at rate gains of nearly 50 percent
But less arcane issues came up, too. Several interveners seemed concerned about how many consumers would apply for the rate freeze NV Energy wants to offer to low-income families. The freeze would apply to any household earning less than 150 percent of the federal poverty level, which is $10,830 for a single-person household and $22,050 for a family of four.
Interveners’ attorneys noted that NV Energy’s estimate of poor households that might apply came from 2000 Census numbers. With the local economy in a deep recession, they wondered whether it is possible that those older numbers mean utility executives might have underestimated the subsidy they’ll need to cover participation in the rate freeze?
NV Energy officials replied that they were confident their analysis would hold up in practice.
And attorney Bill Stanley of the state’s Bureau of Consumer Protection said his calculation of residential increases showed that local consumers would pay nearly $100 million to subsidize lower rates for commercial power users.
NV Energy officials said their method for determining rates showed no such subsidy.
In addition to the water authority and the Bureau of Consumer Protection, interveners in the case include the U.S. Department of Energy; the Colorado River Commission; Smith’s Food and Drug parent Kroger Co.; Wal-Mart; the Southern Nevada Hotel Group; the Nevada System of Higher Education; a power provider called Nevada Cogeneration Associates Nos. 1 and 2; and Nevada Caregivers, a coalition including St. Rose Dominican Hospitals and the Valley Health System.
Individual consumers can’t intervene because they’re represented by the Bureau of Consumer Protection and staffers of the Public Utilities Commission.
Testimony is scheduled to continue through Friday.
The public can attend hearings but can’t comment. The hearings happen at 101 Convention Center Drive, Suite P111.
To see NV Energy’s rate application, visit www.nvenergy.com/company/rates/filings, or stop by any NV Energy office to pick up a copy. To view all filings, including documents from interveners and the Bureau of Consumer Protection, visit http://pucweb1.state.nv.us/PUCN, and scroll down to case 08-12002. To comment on the case, write to the commission at 101 Convention Center Drive, Suite 250, Las Vegas, NV, 89109.
Utilities commissioners plan to issue a decision on the case in a special-agenda meeting at their offices at 9:30 a.m. June 24.
Contact reporter Jennifer Robison at firstname.lastname@example.org or 702-380-4512.