PUC to review rate hike rulings

Monday, May 20, 2002 | 10:16 a.m.

The state Public Utilities Commission will meet Thursday in Las Vegas to decide whether to change its March decisions in two Nevada Power Co. rate cases.

One decision involved the granting of only $485 million of the $922 million Nevada Power sought from ratepayers for energy used last year. The other resulted in a $42.9 million reduction in the general rates the utility was allowed to charge to recover administrative costs.

If the PUC revises its decision in either case, customer rates that went into effect April 1 could change again.

In both cases Nevada Power and intervening parties that represent customers had 15 days to challenge the rulings. Nevada Power, declining an opportunity to file a motion for reconsideration in the $922 million case, chose instead to sue the PUC in District Court in Carson City in an effort to recover the full amount.

The PUC will consider motions by interveners to reduce the $485 million that was granted to the utility. One motion by the state Bureau of Consumer Protection requests that the PUC disallow the remaining $485 million or at least reduce that amount by an additional $94 million to $128 million. The state bureau based its recommendations on what it termed "inept" energy purchasing practices dating back to 1999.

The Nevada Coalition of Commercial Energy Consumers has also requested a reduction in the amount of money granted to Nevada Power. The PUC subtracted $180 million from the $922 million request based on a 1999 long-term, low-cost energy contract state regulators felt the utility should have signed with Merrill Lynch. The coalition says $12.7 million more should be subtracted based on the failed Merrill Lynch deal.

Nevada Power did file for reconsideration in the general rate case. The company, which had sought a general rate increase of $22.9 million, wants the PUC to reconsider the way it calculated the new rate. The PUC reduced the general rate by 3 percent, but Nevada Power disputes the way regulators calculated such items as capital investment costs, depreciation expenses and costs associated with the 1999 merger of Nevada Power into Sierra Pacific Resources.