Nevada Power submits monthly rate increase

Monday, Dec. 18, 2000 | 12:20 p.m.

CARSON CITY -- Nevada Power Co. filed its seventh rate increase request since July on Friday, though the latest request is about half the size of the last one, made in November.

The Las Vegas based utility filed a petition Friday with the state Public Utilities Commission to boost rates by $8.1 million per year, or about 46 cents extra per month for a homeowner who uses an average of 1,100 kilowatt hours monthly. This rate increase would be effective Feb. 1.

In November, the company filed a rate increase for $15.7 million, or $1.04 more to an average homeowner.

Since July the total hike has amounted to about 12 percent or $9.24 a month. Six of the increases have sought to recover the higher cost of fuel paid by the utility.

The company said the lower increase this time is because it has been able to sell some of its electricity to other states that are experiencing shortages.

Karl Walquist, public information officer for Sierra Pacific Resources Co., the parent of Nevada Power, said those six increases amount to $86 million in higher revenue for the company. But he said Nevada Power has paid $196 million in higher fuel costs to its supplier. So the company has not recovered $110 million it paid for increased energy costs.

Under the so-called "global settlement" reached between the power companies, Consumer Advocate Tim Hay, the gaming industry and the staff of the state Public Utilities Commission, rate increases to recover higher fuel costs are limited.

The agreement was approved by the Public Utilities Commission on a 2-1 vote.

While the rates receive only a partial review under the agreement, both utilities must present audits to the PUC every six months to verify that the companies are not getting more than allowed by the cap.

Under a "worst case scenario," Nevada Power would be allowed to raise its rates by 63.8 percent, or $48 a month, from last July and until February 2003. Its Northern Nevada sister, Sierra Pacific, would be permitted to boost its rates by 43.9 percent, or $24.99 a month, from November this year to February 2003.

Hay said the settlement calls for a small amount to be added each month, rather than the major increases that hit in such places as San Diego, where bills rose by more than 100 percent.

The first increase by Nevada Power effective in August was 4.7 percent and since then the hikes have been about 1.3 percent until the one Friday, which was for 0.55 percent.

Sierra Pacific Power Co., the sister of Nevada Power which serves Northern Nevada, also filed its monthly rate increase petition, which will amount to about 62 cents a month for a homeowner who uses an average of 650 kilowatt hours. This is the fourth increase by the Reno-based utility and amounts to a cumulative total of about 6.9 percent or an extra $3.93 for an average residential customer.

Walquist said Sierra Pacific did not sell as much power to other states as Nevada Power. The peak load for Northern Nevada is in the winter time, as opposed to Southern Nevada, when the use goes up in the summer due to air conditioning.

He said the company has asked for $49 million in the four applications. If there had been no limit, it would have been entitled to $66 million, or 34 percent more.