PUC moves on exit fees, time-of-day metering

Kevin Rademacher

Friday, April 18, 2003 | 9:58 a.m.

The state Public Utilities Commission Thursday granted Nevada Power Co.'s request for reconsideration of a March ruling to allow two customers -- the Riviera Hotel and the Imperial Palace -- to leave the company's grid without paying exit fees.

The PUC initially ruled in favor of the exiting users, claiming the utility and its remaining customers would save $3 million that would have been spent buying power to serve the exiting users.

Nevada Power, however, challenged the ruling over $1.5 million those customers would have paid to maintain an existing generation system the utility built, in part, to serve those exiting users. The company said it will not be able to recover those costs until the next general rate case, which is currently scheduled for October.

That would present the cash-strapped company with a financial hardship until remaining customers absorbed those costs.

The results would also violate a 2001 state law that allows large power users to leave only if remaining customers and the utility are not harmed, company officials argued. The PUC said the $3 million savings offsets the potential $1.5 million liability for the remaining customers.

The commission voted 2-0 to grant the rehearing, with Chairman Don Soderberg abstaining. A date has not been set for the hearing.

On Tuesday, state Consumer Advocate Tim Hay filed a challenge to a similar ruling, allowing nine more large customers leave without paying exit fees. He said the decision placed remaining customers at risk.

In another PUC action, commissioners approved trial rates designed to shift residential and small commercial customers away from using power during times of peak demand, 1 p.m. to 7 p.m..

From June through September, customers will be able to sign up for the time-of-use program that will reduce rates from 8.8 cents per kilowatt hour to 7 cents during off-peak hours. From 1 p.m. to 7 p.m., rates would be raised from 8.8 cents to 15.1 cents. Those rates would be in affect seven days a week during the summer months.

As part of the trial program, if customers have paid more after one year as a time-of-use customer, the utility will refund the difference from a traditional rate schedule.

In order to sign up, customers must have a new meter installed by the utility. That would be paid for through a monthly fee increase from $5 for traditional customers to $6.88 for time-of-use customers.

"If a significant amount of load were shifted to off-peak times, the utility would avoid high priced energy and this could result in lower energy rates for all customers," said Anne-Marie Bellard, a PUC economist.