Thursday, June 27, 2002 | 10:56 a.m.
Two downtown Las Vegas businesses filed a class-action lawsuit against Nevada Power Co. on Wednesday, alleging the power company has been over-billing and deceiving hundreds of Clark County businesses for as long as 20 years.
At issue, the lawsuit says, is Nevada Power's practice of metering electricity for large commercial customers before the electricity enters Nevada Power-owned transformers that change its voltage. The process of converting the voltage results in energy losses of 3 percent to 6 percent.
Nevada Power, the lawsuit alleges, has been over-billing commercial customers in Las Vegas by billing them for the power delivered to the transformer -- instead of the reduced amount of power coming out of the transformer that is actually used by the customer.
The suit was filed by real estate owner Bonneville Square Associates LLC and the Plaza hotel-casino. The plaintiffs, on behalf of up to 500 past and present Nevada Power commercial customers, sued Nevada Power in Clark County District Court, alleging violations of the Nevada Deceptive Trade Practices Act and over-billings of millions of dollars.
The plaintiffs are customers that are charged what Nevada Power calls the Large General Service Secondary tariff rate or LGS-S rate. They typically consume between 300 and 999 kilowatts in a month. Nevada Power said downtown casinos and shopping malls are typical of customers that are charged these rates.
Nevada Power, which classifies its customers by size and the voltage level at which service is taken, charges commercial customers the LGS-S rate for transformers provided to convert electricity from a primary voltage of about 12,000 volts to a level usable by the customer of 480 volts.
"As such, the customer is placed on the LGS-S rate that is a higher rate than customers who own their own transformer and take service at the primary voltage of about 12,000 volts. (These customers are charged the LGS-P rate)" the suit said.
"Point of service and thus placement of the meter for billing purposes should be determined by whether service is primary with the meter on the primary or 'high' side of the transformer, or secondary with the meter on the secondary or 'low' side of the transformer," the suit said.
Nevada Power was accused of improperly metering some of its customers "on the high side of the transformer" even though it knows these customers "will be charged for up to 6 percent more energy than they actually receive because of energy losses occurring when energy passes through the transformer."
The suit, filed by attorney Robert Gerard of the firm Gerard & Osuch, alleged violations of the Nevada Deceptive Trade Practices law because Nevada Power "knew or should have known that representations to plaintiffs as to the characteristics of the goods and services provided were false and misleading."
"Nevada Power knew or should have known that the service offered ... was not metered as such and thus was of a different standard, quality or grade than represented to the plaintiffs," the suit said.
Nevada Power also falsely represented to customers that they would save money by being metered on the primary or high side of the transformer, the suit said.
Nevada Power officials declined comment on the lawsuit.
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