High court weighs suit over alleged utility overbillings

Thursday, Nov. 13, 2003 | 11:18 a.m.

CARSON CITY -- Nevada Power Co., accused of overbilling more than 500 customers in Clark County for 20-30 years, says this dispute should be decided by the state Public Service Commission that regulates the rates of utilities.

But an attorney for the Plaza hotel-casino and a downtown Las Vegas office building told the Nevada Supreme Court Wednesday that the issue should be settled in district court, rather than the PUC.

The Plaza's Union Plaza Operating Company and Bonneville Square Associates, in behalf of themselves and hundreds of other customers, filed suit in District Court two years ago, claiming Nevada Power Co. has been overcharging them because of the location of the meters near the transformers.

The location determines whether the customer should be charged a higher or a lower rate. In this case attorneys for the customers say they may have been overbilled by $20 million to $30 million.

Harold Morse, attorney for Nevada Power, told the court this issue should be decided by the PUC because the allegation is that one of its rules has been violated. The utility, he said, denies the allegation these customers were overcharged.

Morse said the businesses are claiming that the regulation was violated and it should be up to the PUC to decide the issue. "We didn't violate the tariff," he told the court.

If the consumers are unhappy with the decision of the PUC, Morse said they could then file suit, challenging the order of the state agency.

But Daniel Polsenberg, attorney for the customers, said the issue is the conduct of Nevada Power, not rule making.

He said Nevada Power told the customers that their "best interests" were locating the meter on the side that charged the higher rates. He alleged this was a case of deceptive trade practices.

Polsenberg argued there were 544 members of the class in the suit. The PUC, he said can't order a refund or impose sufficient sanctions on Nevada Power. He said the PUC can impose a civil penalty of only $100,000.

The suit by the customers seeks punitive damages against the Las Vegas utility.

The PUC has filed a Friend of the Court brief, saying it should decide the issue.

Steve Smith, also representing Nevada Power, said the PUC is the "consumer protector of the customers,' and that's where the case should start. He said the PUC can order refunds and can punish the utility by ordering rates to be lowered.

The court took the arguments under submission and will rule later. The power company is appealing a ruling by District Judge Kathy A. Hardcastle.