Consumers speak up on rate hike

Kevin Rademacher

Wednesday, Jan. 14, 2004 | 10:52 a.m.

Ratepayers attending a consumer session on Tuesday afternoon were not happy about a pair of Nevada Power Co. rate increase requests that will be considered this spring by state regulators.

A sparse crowd attended the session, and six speakers said the proposed rate hike -- which would raise the average customer's monthly bill from $103.81 to $114.18 on April 1 -- would be difficult to take.

"I just don't understand why we have to have such high rates," said Katherine Carter. "Social Security has been cut. I don't understand. It just doesn't make sense. It's too much for me."

Based on a phase-in strategy for the rate increases proposed by the utility, rates would rise again in April 2005 to $116.51.

Dorothy Lukasik, a North Las Vegas resident, said her Nevada Power bills have risen from $36 a month in November 1997 to $85.53 a month for November 2003.

"I blame you people for allowing this to happen," Lukasik said to the members of the state Public Utilities Commission and Nevada Power executives. "We've gotten held up without a gun."

Nevada Power's so-called "deferred energy" requests are designed to generate $93 million a year for unrecovered costs the company spent on fuel for power plants and additional electricity needed to serve customer demand. The utility also is seeking an additional $80 million a year to cover higher costs expected on future fuel and power purchases.

The utility generates only about 40 percent of the power needed to meet peak summer demand.

The company also is seeking an additional $133.5 million a year in a general rate case to cover the cost of constructing and maintaining power plants and transmission lines as well as administrative costs and a return to shareholders.

John Baietti, owner of the Red Apple Grill and a frequent critic of Nevada Power, said the company should be able to control costs without the rate increases and said ratepayers should be allowed to have the company's books audited independently.

Michael Yackira, chief financial officer for Nevada Power's parent company, Sierra Pacific Resources, fired back at the proposal.

"The reason the Public Utilities Commission exists is to do just that," he said.

Baietti then turned his attention to the credibility of the PUC.

"You guys know how to get this board to say yes," he claimed. "These meetings we have are pointless."

He also went on to call for a change in ownership of Nevada Power Co. and also asserted that the state's Bureau of Consumer Protection has done nothing to aid ratepayers in past cases.

"I can't agree with anything you said," Yackira said. "The facts you have presented are not facts."

One speaker, Michael Lavine, president of Consumers and Citizens for the Protection of the People, did have some kind words for the company.

"It's about time to stop yelling and fighting with each other and sit down and talk about how we can get some rate stabilization," he said. "Unfortunately we are going to have a little pain going forward."

Lavine praised Nevada Power, which his organization attacked during a $922 million rate increase proposal in 2001, for opening the lines of communications with ratepayers.

He said Nevada Power President Pat Shalmy responded to his group's request to establish a citizens advisory committee to help in educating the public on rate issues. That 16 member group, which met for the first time a few weeks ago, is now expected to meet quarterly, Lavine said.

"It's the most open the company has been since the takeover by Sierra Pacific," he said. Sierra Pacific purchased Nevada Power in 1999.

The PUC is scheduled to open hearings on the rate cases in February. A decision must be reached on the general rate case by March 29. A decision must be issued in the deferred rate case by May 12.