City negotiating to offset proposed hike in power rates

By Cassie Tomlin

Thursday, Nov. 6, 2008 | midnight

The city is joining with the Lincoln County Power District in an effort to negotiate with NVEnergy over a proposed rate hike.

NVEnergy is the new name of Sierra Pacific Resources, which owns Nevada Power.

The City Council approved spending about $150,000 to pay a consultant to negotiate what officials expect could be a doubling or tripling in electrical power costs. Lincoln County will pay half of the cost, expected to be $200,000 to $400,000.

Much of Boulder City's power comes from Hoover Dam, but it supplements the hydroelectric power with commercial sources. Since 1989, Boulder City has paid a wholesale rate for electricity, and the cost to consumers for 18 years has stayed the same. It was lowered once, in 1990.

City Manager Vicki Mayes told the council NVEnergy in January will begin steps to double or triple the rate to Boulder City. It could increase to six or eight cents per kilowatt hour.

Michael Carano, director of rates and regulatory affairs, confirmed NVEnergy plans to make the filing in mid-2009, and said the company would work with Boulder City to develop a new rate.

The increase hasn't been determined, he said.

"The cost of natural gas and fuels used to generate power have increased substantially over the last 10-year period, and none of those costs are reflected in this older agreement," he said.

Ned Shamo, the city's electric utility administrator, said the rate hearing is a "complex, involved and expensive" process, and happens quickly.

Shamo said though NVEnergy hasn't officially notified the city it is preparing to file for the rate increase, once the filing is done, the rate could go into effect in 60 days. At that point, the city would file a protest or seek negotiation.

Shamo is interviewing consultants to represent the city if it requests a FERC hearing to renegotiate the raised rate.

"It's prudent we be prepared to be proactive and have the mechanism to respond," he said. "We don't anticipate spending any money until they pull the trigger, but want to have our ducks in a row."

Cassie Tomlin can be reached at 948-2073 or [email protected].