PUC chairman backs deal to allow utility to recover past costs

Kevin Rademacher

Tuesday, March 15, 2005 | 10:49 a.m.

The chairman of the state Public Utilities Commission is recommending the approval of a deal reached last month that would allow Nevada Power Co. to recover $115.9 million in past fuel and purchased power costs.

The three-member PUC will vote on the draft order authored by Chairman Don Soderberg at a meeting scheduled for Wednesday.

Parties in the so-called deferred energy 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 a stipulated agreement on Feb. 22.

Under that agreement the average residential customer would see a monthly rate increase of 93 cents, from $122.33 to $123.26. That amounts to a 0.76 percent jump.

Nonresidential rates would drop by 1.71 percent. The difference between residential and nonresidential rate movement is attributed to higher peak demand for residential air conditioning during peak summer periods.

The deal would modify 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.