Facebook
Fark
Digg
Reddit
Stumble
Wednesday, Dec. 10, 2008 | 2 a.m.
Sun Archives
- Letter to the Editor: Now is not the time to boost power rates (12-4-2008)
- NV Energy seeking rate increase (12-2-2008)
Beyond the Sun
A nearly 18 percent increase in residential electric rates proposed by NV Energy sparked public outrage last week.
Consumers are upset about the average Southern Nevada electric bill going from about $150 to about $175, saying a down economy is a poor time to charge customers more. But where were those ratepayers in 2006 and 2008, when regulators held public hearings over whether to approve the utility’s plans to purchase one power plant and build two others?
NV Energy executives say the cost of those plants, approved later in 2006 and 2008, is the reason the rate increase is needed.
Nevada Public Utilities Commission hearings rarely involve anyone not employed by the utility, environmental groups or the commission itself. The same was probably true for the hearings in which the commission approved the purchase of the Bighorn Power Plant near Primm and construction of gas generators near U.S. 95 and Sunset Road and at the Apex industrial complex north of the city. Neither the commission nor the utility could immediately say whether any ratepayers sat in the audience those days.
That’s nearly $1.5 billion in investments with only a consumer advocate, a few environmentalists, a reporter or two and three utility regulators asking why.
In fact, buying and building power plants is a strategy — one the commission and the utility are counting on to make electric delivery reliable and rates stable in the long run.
Before the Western energy crisis in 2001, Nevada’s utility had the opposite strategy. Then, it was cheaper for utilities to buy energy from independent power producers than to build their own plants — buy more, own less. That strategy nearly bankrupted the company.
But it changed just after the turn of the century, when energy prices skyrocketed. Rolling blackouts in California were probably encouragement enough, even if soaring prices weren’t.
When NV Energy started building and buying in 2006 (the regulated utility industry moves slowly), it owned enough power plants to provide 25 percent of peak summer demand in the valley. Today the utility, formerly Nevada Power, can provide about 70 percent of the valley’s growing demand. Over those two years, the utility has netted 2,380 additional megawatts of generation capacity, enough to serve nearly 1.7 million average homes.
The company’s executives brag that 2009 summer bills, just before the proposed rate increase would take effect, will actually be lower than 2007 summer bills.
That’s little comfort for Las Vegans struggling to pay their bills all year.
The company wants the rate increase to kick in after the hottest part of summer is over, and executives say there will be virtually no rate increase for low-income residents thanks to a new program to offset the higher charge.
They insist the investments will pay off in the long run with lower rates for customers. (It will pay off for the company as well, with an 11 percent profit.)
Because every dollar spent purchasing electricity from independent power plants is passed on to the consumer, over time power from generators the utility owns is cheaper.
They say the three plants that account for this rate increase have saved customers $100 million a year — a difference that comes from cutting out a step in the supply chain.
But for consumers who think this increase — the largest since the Western energy crisis — is the last for a long time, consider this: NV Energy plans to spend at least another $5 billion on a coal plant in rural Nevada. If an 18 percent increase for $1.5 billion in spending sounds bad, just wait until that bill comes along.
The rate change should be coupled and discussed at the same time as the request for building or buying a base loaded unit.
When solar plant was proposed we should have been told what the affect was on our rates as part of the approval process.
When the 3 natural gas-fired units were proposed we should have been told what the affect was on our rates as part of the approval process. Note that these are carbon polluting plants and will be subject to cap and trade carbon credit cost. All cost should be part of the purchase/rate approval.
NV Energy plans to spend at least another $5 billion on a coal plant in rural Nevada.
But how does this translate to the power rate.
Couple up the hearings so we know the capital cost and the rate change before approving building, buying plant or buy from independent supplier
Maybe the PUCN should hold all the hearings impacting Clark County in "Clark County"! The PUCN has long held all its "hearings" in Carson City. That is right, Carson City and now they have the audacity to blame the PUBLIC? Shame on you PUCN!!!
Not long ago you changed the rules to require advocates be licensed Nevada lawyers!!!
Dandy Don feathered the bed as chairman of the PUCN then went to "work" at R&R until he could get a cushy VP job at SWG and now will stroke R&R....not unlike his pal Tony Sanchez at NPC now called "envy energy". Hey Don smart move hiring Pete Er,nut's mom to work for the PUCN in Elko....long term planning for your's and only your best interest!
And Tony, just how much "ratepayer" money can you redirect to R&R and not get fired????
Wait until we get the bill for all those solar plants.
Since they are not 24/7 reliable sources of energy then we will get a duplicate bill one day for building reliable 24/7 reliable sources of energy to offer true capacity.
How much easier are they supposed to make it for "ratepayers" to get to the PUCN or public meetings? I thought they telecast these meetings to Grant Sawyer in Vegas as well. I could be wrong.
My thought if they didn't buy these plants then they'd be accused of not doing enough to avoid what happened in the early 2000s . . . damned if you don't damned if you do. Tough spot for any business, regulated or not.
Isn't this the same story we have been hearing since the Energy Crisis, "After this increase, our bills will stay flat." Not only do they continued to increase, executive salaries increase at a steeper rate and we pay them. Do you really think they care about the rate payers, its all about the stock holders.
jfnance-
Did you have reoccurring nightmares about renewable energy when you were a child?
I wonder if the comment section for the LV Sun will spontaneously combust some day when you're petty and short-sighted remarks stop appearing on these web pages?
How did I ever get along without your wisdom?
Thanks again for a good laugh.
Oh, and let me guess, somehow, some way, this is all going to be Obama and Reid's fault?
Cheers-
TO