Nevada Power electric rate increase criticized

Thursday, Oct. 28, 1999 | 10:33 a.m.

The three-member commission should stick with Nevada Power's original request to raise rates by only $44.3 million, or 4.9 percent, according to a motion filed by the commission's staff.

Nevada Power originally sought PUC approval in July to raise rates by $44.3 million to compensate for higher fuel costs used in electrical generation.

The Las Vegas-based utility based its arguments on expenses it had during the year ending May 31.

The $44.3 million rate case was to be the last allowed before electric markets in Nevada are deregulated and competition begins in March. Nevada Power then said it would cap its rates for three years for customers who don't switch to a competitor.

But in September the utility changed its mind and asked the commission to consider a $110 million increase. It pointed to a jump in fuel prices and said it should be allowed to recover other expenses as well.

"We think we should be made whole for the money we spent" to keep air-conditioners running and lights burning, said Steve Rigazio, senior vice president of Nevada Power.

Consumer Advocate Fred Schmidt called the $110 million request "simple greed, plain and simple greed."

"Anything and everything they can think of they're throwing in there," Schmidt Schmidt said. "I wouldn't be surprised if we find a kitchen sink in there."

The PUC staff argues that the commission should refuse to consider Nevada Power's request to boost the total request to $110 million because of promises that Nevada Power made to state legislators.

The utility last spring told the state legislators it would stop seeking fuel rate increases for periods after May 31. The promise was part of a compromise on electric industry deregulation, according to the PUC staff.