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July 26, 2014

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Residential power rates rising 10-11 percent after state OKs increase

CARSON CITY – The state Public Utilities Commission authorized NV Energy to raise its rates, with the increase on an average single-family home in Las Vegas an estimated 10-11 percent.

The electric utility had sought an increase of more than 20 percent.

After hearing protests from a handful of customers, the commission voted to allow the rates to take effect Jan. 1.

The rate increase for commercial customers will be 7 percent or less because commercial customers have been subsidizing residential customers. The goal of the company and the commission is to eliminate commercial subsidies to residential customers.

The exact size of the rate increase is unknown at this point. The commission said NV Energy will have to analyze its 240-page decision to determine the exact rates.

Simultaneous with the rate increase is a 3 percent decline in fuel costs, which are passed on to customers, lowering the overall increase customers will see in their bills, said the commission.

One customer, Mike Hazard, argued that it’s not time for an energy rate increase, given the depth of the recession and the state’s high unemployment. Kristal Glass, owner of a small business in Las Vegas, asked when NV Energy will consider its rates high enough.

Commissioner Rebecca Wagner and Chairwoman Alaina Burtenshaw said the PUC must abide by what is in the record built over three weeks of hearings. Burtenshaw said she took exception at criticism that the decision by the PUC was made behind closed doors.

The commission decided that ratepayers won’t pick up the cost of 4 percent of its employees’ salaries. That could translate to a 4 percent reduction in employee pay but a PUC spokesman said the utility’s board of directors can decide what to do.

The commission also set the company’s rate of return at 10 percent, down from the 10.25 percent. The company asked for an 11.25 percent rate of return.

The commission had some harsh words about the utility’s service to customers. The commission, in a decision written by Wagner, said the average wait for NV Energy to answer customers’ telephone calls has declined from 2 minutes 33 seconds in 2008 to 4 minute 40 seconds in 2010.

NV Energy held 20 positions open in its call center, about 15 percent of the staff. The company had planned to transfer some meters readers into call center positions but that has not happened.

The utility says its meter reader numbers will be reduced by 95 with the installation of digital meters.

“The Commission finds that NV Energy’s reduction in customer service as a result of its failure to adequately staff its call center operations is unacceptable,” the opinion stated.

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  1. NV Energy will ask for a rate increase every single time they are allowed to unless it determines the greatest increase will come from a different tactic.

    NV Energy will ask for a rate increase every time it can. Period. The only question is how much will the commission give them. NV Energy continuously builds a case for a rate increase. They start the race from half way around the track. They ask for more than they need or can justify knowing that they will likely get less, and if they don't they got over. It's a negotiation with the public having two hands and one foot tied down.

    NV Energy will always win as they have a full time staff of planners, lawyers and management with decades of experience and almost unlimited resources planning, preparing and building tactics that insure it's success versus politically appointed part timers who don't see our money as their money, only a macro view controlled by NVE.

    Without competition, our rates will always go up. Clark country and Southern Nevada need other energy companies and especially member owned co-operatives to compete directly for your business. You need a choice, today you have none. Until we get choice we are at their mercy.

  2. The PUC would have been completely within its rights to have de-constructed NV Energy's data and imposed a rate DECREASE based on the decreasing cost of generating base load power.

    But that would have taken effort. The easy route was taken with strong language offered as a substitute for strong action.

  3. Next year, I'll be willing to wager they'll be asking for another increase in 6 months.

  4. First they get on this 'Green' and conservation kick, then now that we're using less power, they want to raise the rates. Use less pay more.

  5. The PUC made a big mistake, a 10% return is huge these days with .05% t bills and 4% 10 year US bonds, the rate of return should have been reduced to around 5%. I assume the rate increase is so they can buy more expensive green energy and all the jobs it creates? The stock yields about 3.5%!

  6. This doesn't make sense. How can they justify a rate increase if the ROR is being reduced?

    Either get some competition in here or make the PUC accountable to consumers.

  7. Nevada energy would not get away with this farce of a rate hike if they did not enjoy a monopoly status.

  8. Connecticut -- 18.03 cents per KWH**
    New York -- 17.40 cents per KWH**
    New Hampshire -- 16.34 cents per KWH**
    New Jersey -- 16.14 cents per KWH**
    Rhode Island -- 16.21 cents per KWH**
    Maine -- 15.78 cents per KWH**
    California -- 15.30 cents per KWH**
    ** rate not including service charges and fee's.

    All of those states are deregulated and have competition. They all charge a great deal more then we are paying here in Nevada. Our base rate is only 11.9 cents per KWH at this time.

    How is deregulation and competition going to help us?

  9. Peter is right. 2 1/2 times the rate of return on "safe" investments either means that NV Energy is so risky it requires such a rate to attract capital or the PUC is a lazy rubber-stamp. Is Nevada Energy more risky than Italy? Spain? Ireland? or Greece? No.

    The current price of natural gas is 3.58 per million BTU, down 14% from last year and 1/3 of what it was three years ago. 70% of NV Energy's electricity production comes from facilities fired by natural gas. Are our rates declining by 70% of 14% (~10%)?. Have our rates declined by 70% of 2/3rds (~46%) since 2008? No and No. Why not? On what basis does a utility with declining costs merit an increase?

    There appears to be no basis for such an increase other than dereliction of duty by the PUC staff and Commissioners.

  10. Wait a minute. Something smells fishy here with the timing of this.

    I just had people from NV Energy come by my place last week and installed some kind of Smart Meter. Not sure what that is. Guess the one I had in before was dumb and it wasn't good enough. They deemed I deserve better, I guess.

    In the pamphlet they left on my door, it said it would provide a better service of reading my meter, better than the one before, and that it would not incur any money on my part for its installation.

    And NOW I read here an article in the LV Sun they just raised my rates by ten percent!?!?!

    Not sure if it's just the timing or what, but...

    Come back, NV Energy. Un-install this infernal thing. Because I think I was shafted with the price of this contraption. I'm pretty sure it don't cost that damn much.

    I know I'm smarter than than that meter. I don't need it if you're gonna charge me for the damn thing. I want it back the way it was. Gimme back my dumb meter.

  11. Providing Vegaslee's numbers are right and I have no reason to believe he isn't. You can bet NV Energy is very familiar with other states rate. Trust me they will, stay in the hunt until our rates equals the top ten.

  12. Back in 2001-2003 NV Energy stock was nearly worthless. Pat Mulroy, as leader of Southern Nevada Water Authority wanted to use her agency's powers to buy NV Energy so that it could be run as a true public-owned utility. However, big-men-on-campus, including an elected official from Henderson, got in the way and prevented Clark County residents from benefiting from the drop in the value of NV Energy stock. I will always wonder if the plan to convert NV Energy to a public-owned utility would have gone through if Ms. Mulroy was "one of the guys" running Las Vegas.

    Instead, year after year for the last 10 years, as NV Energy's profitability has risen, and Nevadans have become poorer, all the while paying steadily increasing power bills. Nevadans pay through the nose for their power bills, and the Public Utilities Commission does nothing to protect the public from rate increases.

    In these times a 2% rate increase is tough for a family struggling to keep a job, pay bills, eat and raise kids is bad enough...but 10% ?????

    The loss of the opportunity to make NV Energy a public owned utility occurred because of the selfish interests of a few male power brokers who shall remain nameless, but most politically astute Nevadans know who they are.

    These events perhaps show that women working for public agencies lead, while men in the same position thieve.

  13. OK. I think I've got this. If you try to conserve energy, they will raise your rates to compensate. They will charge you more for smart meters so they can lay off the meter readers and increase their profit.

    To sum it up - you're screwed.

  14. Yep, NV Energy profits go up; then they make some errors and to compensate and keep their investors happy they get a rate increase courtesy of their monopoly of power (political and energy). Right?

  15. Well, well. Perhaps I was a bit hasty in thanking Governor Sandoval for vetoing NV Energy's law to make citizen's financially liable for the billion + dollars for transmission lines this 76th Nevada Legislative Session.

    It doth appear that he is helping NV Energy out in other ways, as pronounced by jbkayaker12, on December 21, 2011 comment:
    "You have to thank Governor Brian Sandoval for appointing a friend to the Nevada Energy executives as one of the commissioners of the Public Utilities Commission."

    Talk about trade-offs at Taxpayer expense!!!

    Can Nevada Citizens trust the current PUC???
    Hell NO!!!!! It is obvious WHO they really serve and are watching out for. The People of Nevada's trust has been violated and there is little the little guy citizen can do!

    Time to form a Class Action Lawsuit or something. Things have gone too far.

    Blessings and Peace,
    Star

  16. What is the thinking here?
    Sounds like we have to pay for new meters. Why is there no other power company?
    PUC is working for NVE.
    All this talk of NV making power but yet we pay more? Highest Unemployment rate and they stick it to people, when they have the least amount of money to pay. I say we should disband PUC and get another power company in this state who does not rob people, hmm that will be hard....