Friday, Sept. 30, 2005 | 10:44 a.m.
The news was not good at a Public Utilities Commission forum on the rising cost of natural gas.
The Thursday afternoon event featured PUC staff officials, utility company executives, Gov. Kenny Guinn's energy advisor and representatives from several advocacy groups. All agreed that record high natural gas prices -- which are now being pushed higher in the wake of two major hurricanes -- will translate to burdensome bills for consumers.
"We don't want to have a monopoly on bad news, so we came here to share it with you," said Rick Hackman, manager of the PUC's Consumer Complaint Resolution Division.
Roberto Denis, vice president of energy supply for Nevada Power Co., said gas that cost $5.88 for a million British thermal units in September 2004 now costs $12.66. Hackman also pointed out that currently 63 percent of the natural gas used in Nevada goes to fuel electric power plants, and that percentage is likely to go higher early in 2006 when a 1,200-megawatt power plant being built by Nevada Power goes online.
Bill Moody, an executive with Southwest Gas, said that the utility currently has a rate increase request being considered by regulators that was mandated by higher gas costs. If approved, the average Southern Nevada bill for January, which was about $100 in 2005, would jump by about $19.
"Here at the PUC, we see a kind of gathering storm," Hackman said. "Here in the next few months, you will be seeing some sobering utility bills."
He also emphasized that the problem is not confined to Nevada. He pointed out that the U.S. Energy Information Administration has predicted a 47 percent increase in residential natural gas prices.
"This is not a problem that is the fault of the Nevada utilities or the PUC or Enron or any other bogeyman out there," Hackman said.
Nevada regulations do not allow utilities to make a profit on fuel costs, mandating that they be allowed to collect prudently incurred costs for fuel and power to be recovered dollar for dollar. Those costs are covered by base tariff energy rates. The companies make a profit on general rates, which include transmission costs, administrative costs, the costs of maintaining pipes and lines, as well as a return for investors.
Hackman also pointed out that in recent rate cases, no parties involved questioned the prudence of Southwest Gas' or Nevada Power's fuel expenditures.
Still, advocacy groups expressed concern over the impact of the rising costs on cash-strapped residents.
"My concern is that we are also going through historic times in terms of housing costs," said Daniele Dreitzer, executive director of Henderson Allied Community Advocates. "There is no affordable housing out there."
She pointed to the recent hurricanes stressing the availability of federal housing assistance vouchers and the local trend that has seen many apartments converted to condominiums, putting pressure on rent at the remaining apartments.
After the meeting she also pointed out that low-income residents are also facing higher minimum credit card payments in the wake of federal regulatory changes and tougher bankruptcy laws for those who fall behind.
"I urge you to consider that these are not the only source of increases these people are facing," she said. "We are putting more and more families on the brink of homelessness everyday."
While the news was tough, there were few answers provided. Speakers urged conservation methods, and Hackman encouraged those needing help to talk to the utilities and seek assistance from the handful of programs available to low-income consumers.
"If consumers need financial help, they need to ask for it now," Hackman said. "Keep up a dialogue."
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