Nevada Power rate hike revisited

Kevin Rademacher

Tuesday, April 13, 2004 | 10:37 a.m.

The state Bureau of Consumer Protection on Monday asked the Public Utilities Commission to reconsider portions of its March ruling on Nevada Power Co.'s general rate case request for $133.5 million in additional annual revenue.

The PUC ultimately allowed only about $45 million of that request, but the BCP's filing could increase the disallowance. Also on Monday, however, Nevada Power asked the PUC to clarify portions of the ruling that rejected some amounts.

The BCP argued the commission's decision to allow Nevada Power to recover $2.1 million for increased federal income tax expenses was based on "mistaken facts."

The BCP also is challenging the recovery of $7 million in expenses related to the merger between Nevada Power Co. and Sierra Pacific Power Co. of Reno. It also seeks clarification of the commission's treatment of $1.6 million in rental revenue that the utility lost when it sold property along Flamingo Road last year.

Nevada Power is seeking clarification of the commission's reasoning in rejecting the inclusion of $100 million the utility received from its parent company -- Sierra Pacific Resources -- as equity. The decision cut the additional annual revenue approved for Nevada Power by $3 million.

The utility also is seeking clarification of the commission's treatment of merger costs and the treatment of its Flamingo road land sale.

The commission issued its final order on the rate case March 26. At the same time, the commission allowed the recovery of $169 million of a $173 million deferred rate case request.

The ruling resulted in a rate increase of about 9 percent for Nevada Power customers beginning April 1.

In a separate matter, the Southern Nevada Water Authority filed a motion in U.S. District Court on Monday seeking to have a federal lawsuit filed by Nevada Power thrown out.

In March, Nevada Power Co. filed its suit claiming that the Colorado River Commission and the Southern Nevada Water Authority conspired to damage the utility and its ratepayers during the Western energy crisis.

The lawsuit claims that the agencies, along with bankrupt energy trader Enron Corp., deceived Nevada Power about the commission's energy needs. That scheme led the utility to buy and sell energy based on false information, causing "Nevada Power and its customers significant economic losses," the lawsuit said.

The Water Authority's motion claims the lawsuit is frivolous and violates rules giving the Federal Energy Regulatory Commission sole power to govern such matters.