Tuesday, April 7, 1998 | 12:54 p.m.
If the Las Vegas-based utility's request is approved by the Public Utilities Commission, residential rates would increase starting Aug. 1 by 3.5 percent yearly, or $2.42 a month for the typical customer.
Commercial and other nonresidential customers would face a 7.4 percent rate increase, said Steven Rigazio, Nevada Power's chief financial officer.
The application is causing controversy because of questions of its legality and a rate cap that Nevada Power offered but said it may need to break.
The company said it's offering to cap rates until midyear 2000, about six months after the planned start of competition under deregulation ordered by the state Legislature.
Rigazio said the company is retaining the right to seek higher rates if costs increase substantially before that date.
He declined to say how much costs would need to rise before Nevada Power would ask the PUC to remove the cap and raise its rates.
"It would have to be significant and, even then, I'm not saying we're going to go in and ask for a rate increase," Rigazio said.
State Consumer Advocate Fred Schmidt questioned the seriousness of the rate cap offer and the timing of Nevada Power's request. He said the company missed an opportunity to file its rate increase application in January and, under state regulations, now must wait until July.
"I'm very disappointed that they're trying to get their rates up before their last rates have had any time to have any effect," Schmidt said.
Schmidt criticized the investor-owned utility for seeking almost $100 million in rate increases less than a year after the Legislature ordered state officials to start deregulating the electric utility industry.
Rigazio said the utility lowered rates by about $100 million over the previous two years. He said the rate increase will not affect Nevada Power's profits.
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