Utility, state agree on rate hike

Kevin Rademacher

Wednesday, Feb. 23, 2005 | 10:53 a.m.

A collective agreement has put an early end to two weeks of planned hearings into Nevada Power Co.'s request to recover $115.9 million in past fuel and purchased power costs.

Parties in the rate case -- which include the utility, the staff of the state Public Utilities Commission, the state Bureau of Consumer Protection and large electric customers -- signed the stipulation on Tuesday.

Under the agreement, which must still be approved by the three-member Public Utilities Commission, the average residential customer would see a monthly rate increase of 93 cents, from $122.33 to $123.26.

Details of the plan were expected to be presented to Public Utilities Commission Chairman Don Soderberg at a meeting this morning.

The deal modifies the Las Vegas electric company's original proposal that sought to delay the increase for a year, giving customers the opportunity for a small rate decrease on April 1 as old balances expired. That strategy, critics argued, would lead to large interest charges -- by some accounts $12 million or more -- that would ultimately be paid by customers.

Under the new plan the company would be allowed to recover its past fuel and power costs over two years beginning April 1.

The deal would end a run of contentious rate cases that were often played out in heated public hearings. The new agreement drew praise from utilities analysts.

"That's always a positive," said Jake Mercer, a utilities analyst for Piper Jaffray & Co. "I'm impressed."

In recent years, financial market analysts had lamented that the lack of cooperation and the imposition of large disallowances in rate cases was a sign of a hostile regulatory environment in Nevada.