Utility bills burning up residents’ cash

Kevin Rademacher

Sunday, Oct. 16, 2005 | 9:33 a.m.

Bracing for higher utility bills, Las Vegas-resident Candelaria Montenegro asked for help for the first time in her 79 years.

With assistance from her daughter-in-law, Fermina, she contacted HELP of Southern Nevada, an advocacy group that, among other services, helps weatherize homes of low-income residents.

Fermina Montenegro said it was a necessary step for someone living almost totally on her Social Security income.

"That's all she has," Fermina Montenegro said, standing in the living room of her mother-in-law's northeast valley home. "People don't have a lot of money."

It's the same story for Thelma Clark, 87, who has been lobbying for senior issues since she retired from Caesars Palace 22 years ago.

"People are just telling me: 'How are they going to get the money from me when I don't have it?' " Clark said. "I got a 1.3 percent increase in my Social Security last year."

There's little doubt that electric and natural gas customers are feeling pinched. Southwest Gas Corp.'s 500,000 residential customers in Southern Nevada paid a monthly average of $29.11 in 2000. That average bill now sits at $52.43, up about 80 percent.

In 2000 the average Nevada Power Co. residential customer -- everyone in the valley with electricity -- was paying $84.29 a month. They are now paying $127.88, an increase of almost 52 percent.

While natural gas is traditionally associated with heating costs, it also is used to fuel the majority of the electric power plants in the western United States.

Rick Hackman, manager of the state Public Utilities Commission's Consumer Complaint Resolution Division, said that rising costs are affecting consumers nationwide.

"This is not a problem that is the fault of the Nevada utilities or the PUC or Enron or any other boogeyman out there," Hackman said at a recent public forum on natural gas prices.

The U.S. Energy Information Administration recently predicted that in the West this winter's natural gas heating bills could be 34 percent higher than last winter's.

In the South and Midwest, which rely on natural gas produced in the hurricane-damaged Gulf Coast, heating costs could run as much as 60 percent higher.

The EIA is blaming rising prices on a market strained by the demands of a strong economy, an increased international appetite and concerns over Gulf Coast production.

Debra Gibson, weatherization coordinator of HELP, said that even small increases in monthly expenses can have disastrous implications for consumers on the brink of poverty.

"Even $10 a month to them, that may mean a phone or medication," she said.

In recent days, a pair of Nevada energy industry experts sounded the alarm about rising energy prices and the possible effect on consumers.

"As energy costs continue to rise, I am deeply concerned about the impact on Nevadans," said Rebecca Wagner, Gov. Kenny Guinn's energy adviser, in a statement promoting energy conservation.

Separately, Jeff Ceccarelli -- senior vice president for service delivery and operations for Nevada Power's parent company, Sierra Pacific Resources, and president of Sierra Pacific Power Co. of Reno. -- made similar warnings in outlining a rate increase request made by the northern electric company.

"The picture for energy costs for the coming winter is not a pretty one," he said in a statement.

Conservation has been hailed as the only immediate remedy for consumers. Long term, regulators are pushing for increased use of renewable energy and other sources, including new coal technology. PUC Chairman Donald Soderberg has said on several occasions that utilities should examine the use of such technology, which runs cleaner than the older technologies that fell out of favor because of environmental concerns.

Coal prices have remained stable and low while natural gas prices have soared.

Soderberg also said recently that, given the economic effect of fossil fuels, nuclear power also should not be ruled out.

"We don't have the luxury of ignoring a good new technology," he said.

Catherine Phillips-Olsen, an executive with the Federal Deposit Insurance Corp. in San Francisco, said that the cost of natural gas, electricity and gasoline are cutting into consumer income at a rapid rate.

She said the rising costs come at a time when credit card minimum payments are about to jump, bankruptcy laws are tightening and, particularly in Las Vegas, the cost of housing is on the rise.

"That's quite a few factors coming down all at one time," she said.

Kevin Rademacher is a business writer for the Sun and its sister newspaper, In Business Las Vegas. He can be reached a 59-4069 or at kevinr@ lasvegassun.com.