New rates could give electric shock

Electric rates for Nevada residential customers have doubled over the past 16 years, and there’s little relief in sight.

Nevada Power Co. is asking state regulators for rate increases that would propel residential bills to record highs in Southern Nevada starting June 1 — just in time for heavy power use during the summer air conditioning season.

Southern Nevada “certainly has the potential to have the highest rates we’ve ever had for the residential customer,” said state consumer advocate Eric Witkoski.

“We’re still waiting on a couple of decisions from the (Public Utilities Commission),” Witkoski said.

The year-round average bill for a residential customer using 1,250 kilowatt hours will climb by $18.22 to $154.71 if the commission approves the rate changes as Nevada Power requests. That’s a 13 percent increase.

The same percentage of increase results in dramatically higher bills when air conditioners are in use during the summer.

If the commission approves Nevada Power’s rate increase applications as filed, a typical single-family resident will pay $242.74 for 2,000 kilowatt hours a month during the summer air conditioning months, up from $214.78 previously, according to the utilities commission.

That’s an increase of 13 percent or $27.94. The commission reported the average cost per kilowatt hour of 12 cents.

“Nevada runs on air conditioning,” said Michael Yackira, president and chief operating officer of Nevada Power Co. parent Sierra Pacific Resources. “The summer time bills are definitely higher than a lot of other places in the United States because we live in a desert. It gets 115 degrees here.”

Nevada electric rates are also rising faster than in other states. Nevada’s electric rates soared 94 percent from 1990 to 2006 even though the state continued to regulate the power industry.

While an Associated Press analysis of federal data shows consumers in 16 states and the District of Columbia — which deregulated power since the late 1990s — paid an average of 30 percent more for power in 2006 than their counterparts in regulated states, Nevada power costs were up sharply because of the California energy crisis and the rising cost of natural gas, industry experts said.

Nevada’s electrical rates nearly doubled from 5.7 cents per kilowatt/hour in 1990 to 11.07 cents per kilowatt/hour in 2006, according to figures released by the U.S. Department of Energy.

Public Utilities Commission Chairman Don Soderberg attributed the high rates to two things. He mentioned reliance on temporarily cheap wholesale power during the 1990s, rather than company-owned power plants, and the skyrocketing price of natural gas in recent years.

“That Nevada Power rates have doubled can be attributed to two factors: The failure to build power plants in the Nineties and the overwhelming reliance on natural gas as a fuel,” Soderberg said.

During the 1990s, Nevada utilities and officials decided to buy power on the wholesale market while utilities in Arizona, Utah and Southern California built more power plants, Soderberg said. Some of the out-of-state utilities were charging twice the rates that Nevada Power customers paid, Soderberg said, but they enjoyed some insulation from a later surge in wholesale power prices.

Then, California deregulated its retail power markets and wholesale prices soared amid allegations of market manipulation by companies such as Enron Corp.

After seeing the rolling blackouts and price-gouging caused by deregulation in California, Nevada lawmakers in 2001 abandoned the idea of deregulating the electric power industry in the Silver State.

Yet, utility executives “didn’t do any long-term planning,” Witkoski said. “We turned the ship and we’re trying to patch everything up and deal with a lot of those issues. We’re still paying off what happened in California.”

Yet, utilities that built power plants during the 1990s were less exposed to the jump in Western power prices, Soderberg said.

Nevada felt a second round of rate increases when natural gas prices starting climbing. The price of natural gas rose from $1.70 per thousand cubic feet in 1990 to $7.16 per million cubic feet, said Nevada Power spokeswoman Andrea Smith, citing figures from the Energy Information Administration. After Hurricane Katrina, the price reached as high as $15 per thousand cubic feet, Soderberg recalled.

That stung because Nevada Power gets three quarters of its power from gas-fired generation plants it owns or from gas-fired plants owned by wholesale power suppliers, Soderberg said.

The regulator said most of the Nevada Power rate increases have been for fuel and wholesale power expenses while so-called general rate increases for maintenance, operations and profits have basically kept pace with inflation over the last 16 years.

In recent years, officials have sought to diversity Nevada Power’s fuel mix for power generation. The utility is developing renewable power facilities, such as solar, and geothermal energy, as well as a $3.8 billion coal-fired plant near Ely.

Nevada Power also has built and bought new gas-fired power plants that are 20 percent to 40 percent more efficient than older gas-fired power plants, Yackira said.

“The types of expenditures we are making will, in the long run, improve the prices for customers,” Yackira said.

The utility executive declined to predict when rates would come down, saying that depends on natural gas prices. Gas will remain a key fuel for Nevada Power as the utility struggles to keep pace with explosive population growth, he said.

“We see leveling off (of power rates) in the next few years if natural gas prices stay where they are supposed to,” Soderberg said.

Rates are likely to keep increasing to pay for new generating capacity that will be needed due to Nevada’s growing population, Witkoski said.

“It’s not a pretty story for the ratepayer because rates just keep going up,” he said.

The Associated Press contributed to this report.

Melvin Dummar dead at 74
Melvin Dummar has died at 74. Dummar was famous for claiming to have saved Howard Hughes in a Nevada desert in 1967. Dummar claimed to have been left $156 million in Hughes’ will. The will mysteriously appeared after Hughes’ death in 1976. It was dismissed as a fake two years later. Dummar never saw a dime of the billionaire's fortune. Dummar died Saturday in Nye County.
Officer-involved shooting in Nye County
The Nye County Sheriff's Office gives information about a shooting in Pahrump on Thursday night after a man began firing shots outside of his home. (Nye County Sheriff's Office)
Law Enforcement Active Shooter Training Exercise
Multiple Las Vegas Valley law enforcement agencies held an active shooter drill at the Department of Public Safety’s Parole and Probation office on December 6, 2018. Officials set up the training exercise to include multiple active shooters, a barricaded suspect and multiple casualties. (Katelyn Newberg/ Las Vegas Review-Journal)
Public memorial service for Jerry Herbst
Archiving effort hits milestone at Clark County Museum
The Clark County Museum catalogs the final item from the bulk of Route 91 Harvest festival artifacts. (John Przybys/Las Vegas Review-Journal)
Pearl Harbor survivor Edward Hall talks about his memories of Dec. 7, 1941
U.S. Army Corps Edward Hall, a 95-year-old survivor of Pearl Harbor talks about his memories of that horrific day. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Final Route 91 Harvest festival remembrance objects catalogued at Clark County Museum
The last of the more than 17,000 items left at the makeshift memorial near the Las Vegas sign after the Oct. 1 shootings have been catalogued at the Clark County Museum in Las Vegas. The final item was a black-and-white bumper sticker bearing "#VEGASSTRONG. An additional 200 items currently on display at the museum will be catalogued when the exhibit comes down. (K.M. Cannon Las Vegas Review-Journal)
Dozier execution timeline
Scott Dozier was set to be executed July 11, 2018, at the Ely State Prison. Judge Elizabeth Gonzalez delayed the execution.
Grand Jury Indicts Constable for theft
A Clark County grand jury indicted Henderson Constable Earl Mitchell. A Las Vegas Review-Journal investigation prompted the criminal probe. The newspaper found Mitchell wrote himself thousands in checks, took out cash at ATMs and traveled on county funds. He faces four felony counts of theft and a county of public misconduct. Mitchell and his attorney could not be reached for comment.
93-year-old WWII veteran arrested during visit to VA hospital
Dr. S. Jay Hazan, 93, a World War II veteran, talks about his arrest during his visit to VA hospital on Friday, Nov. 30. (Erik Verduzco Las Vegas Review-Journal @Erik_Verduzco_
Pearl Harbor survivor struggles in her senior years
Winifred Kamen, 77, survived the attack on Pearl Harbor as an infant, works a 100 percent commission telemarketing job to make ends meet. (K.M. Cannon Las Vegas Review-Journal)
Las Vegas Metropolitan Briefing 18th street gang
Las Vegas Metropolitan briefs the media on the recent arrests made regarding the 18th street gang.
Man shot in Las Vegas traffic stop had knife, police say
Police said the man fatally shot by an officer during a traffic stop in downtown Las Vegas had a “homemade knife.” Demontry Floytra Boyd, 43, died Saturday at University Medical Center from multiple gunshot wounds after officer Paul Bruning, 48, shot him during a traffic stop. Bruning pulled Boyd over on suspicion of driving recklessly at 7:41 a.m. near Sunrise Avenue and 18th Street.
Catahoula dogs rescued from home in Moapa Valley
Catahoula dogs were brought to The Animal Foundation after being rescued from home in Moapa Valley.
Intuitive Forager Kerry Clasby talks about losses in California wildfire
Intuitive Forager Kerry Clasby talks about losses she suffered in California's Woolsey Fire in Malibu in November. (Al Mancini/Las Vegas Review-Journal)
Benefit dinner for Kerry Clasby, the Intuitive Forager
Sonia El-Nawal of Rooster Boy Cafe in Las Vegas talks about having a benefit for Kerry Clasby, known as the Intuitive Forager, who suffered losses on her farm in California’s Woolsey Fire in Malibu. (Al Mancini/Las Vegas Review-Journal)
Former President George H.W. Bush dies at 94
Former President George H.W. Bush has died at the age of 94. He died Friday night in Houston, about eight months after the death of his wife, Barbara.
Las Vegans Celebrate Big Snowfall
Las Vegans celebrate big snowfall at Lee Canyon.
Exploring old mines for denim jeans and other vintage items
Caden Gould of Genoa, Nev. talks about his experiences looking for vintage denim jeans and other items in old mines and other places areas across Nevada and the west.
Officers share photo of dead gunman after Las Vegas shooting
A little over an hour after SWAT officers entered Stephen Paddock's suite at Mandalay Bay, Las Vegas police officers far from the scene were already sharing cell phone photos of the dead Oct. 1 gunman.
Frontier jet safely returns to Las Vegas after losing engine piece
Frontier jet safely returns to Las Vegas after losing engine piece. (@FlightAlerts_)
Park Service plans ahead for lower lake levels
National Park Service releases new plans to maintain access to the water as Lake Mead continues to shrink.
Women claim abuse at Florence McClure Women's Correctional Facility
Current and ex-inmates, including Merry West, are suing Florence McClure Women’s Correctional Facility, claiming abuse and inadequate medical care. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Butte County Sheriff's Office Body Cam Footage
Bodycam video from Butte County (Calif.) Sheriff's Office Deputy Aaron Parmley, who was in Paradise November 8 helping with evacuations. (Butte County Sheriff's Office)
NDOT construction blasting along State Route 106
NDOT construction blasting along State Route 160, near Mt. Potosi Road, in Clark County as part of a $59 million, 6-mile-long highway widening project that began this summer. (Nevada Department of Transportation)
Car crashes into Papa Murphy's Pizza shop
A driver crashed a car into a western Las Vegas Valley pizza shop on Tuesday morning, police said. (Joe Stanhibel/Special to Las Vegas Review-Journal)
Low-lake-level pumping station nears completion
Barnard Construction and the Southern Nevada Water Authority give one last tour before the new low-lake-level pumping station is activated.
Trailer: Valley of Fires
Sultan’s Playroom from Make-A-Wish Southern Nevada
Make-A-Wish Southern Nevada’s Scott Rosenzweig talks about granting Sultan Bouras Souissi’s wish, and what went into building it. (John Hornberg/Las Vegas Review-Journal)
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like