VICTOR JOECKS: Who to blame for high power bills

You should be furious with NV Energy for your high power bills. But you shouldn’t just be furious with NV Energy.

Last month, the utility requested a rate increase of 9 percent. That’s an eye-popping request, especially after Southern Nevada residents have endured massive energy bills in recent summers. NV Energy claims other savings will more than offset this base rate increase.

That rate hike includes an increase in NV Energy’s return on equity from 9.5 percent to 10.25 percent. “Return on equity” is a fancy way of describing the profit it receives on what it spends.

Yes, you read that correctly. NV Energy doesn’t earn a profit for providing a good product at a better price than competitors. It receives “profit” by spending more. Oh, the joys of being a monopoly.

In contrast, keeping costs down is imperative for most companies. While major financial investments can be necessary, profitability comes from revenue outpacing expenses. Usually, if a company built a large unnecessary project, it would hurt its bottom line. Not so with NV Energy.

This helps explain why NV Energy has been so willing to embrace the left’s push for renewable energy mandates. During the 2019 legislative session, the utility supported a bill creating a 50 percent renewable portfolio requirement by 2030.

In 2018 and 2020, Nevada voters approved Question 6, a constitutional amendment that also required a 50 percent RPS by 2030. “A ‘YES’ vote on Question 6 would save Nevadans money,” supporters of the ballot measure claimed.

In 2013, then-Gov. Brian Sandoval and the Legislature approved a law to move Nevada away from coal power. Shawn Elicegui, then-NV Energy’s associate general counsel, testified that the marginal cost of that move would be minimal.

These claims were always dubious — just look at your power bill. But note the perverse incentive for NV Energy. In another industry, having to build extraneous projects or unnecessarily closing down a plant early could bankrupt a company. In contrast, these government mandates are making NV Energy a fortune. No wonder it supported them.

And just wait until the bill for Greenlink hits. All that $4 billion-plus project will do is move unreliable renewable energy from one part of the state to another. And your great-great-great grandkids will get to pay for it.

Oh wait. It gets worse. NV Energy also wants to impose a demand charge to discourage consumers from using too much power at once. NV Energy has a monopoly on supplying power and is upset about customers using too much power.

This is a reflection of the inherent limitations of solar energy. Despite new construction projects, such as the expensive Reid Gardner battery plant, an overreliance on solar energy has left NV Energy vulnerable to the sun setting. That’s problematic because the sun goes down every single day.

This is no defense of NV Energy. If you’re angry about high power bills, however, direct your ire first at the leftists who pushed the mandates NV Energy is using to boost its bottom line.

Contact Victor Joecks at vjoecks@reviewjournal.com or 702-383-4698. Follow @victorjoecks on X.