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September 18, 2014

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NV Energy seeks 24 percent general rate increase

Rate per kilowatt hour
(Source: Bureau of Consumer Protection)

  Current Proposed % change
Residential single family .06709 .08307 24%
Apartment .06311 .07653 21%
Businesses .02646 .03156 19%

Fixed monthly charge

  Current Proposed % change
Residential single family $8 $10 25%
Apartment $7 $9 29%
Businesses $17 $25 47%
Michael Yackira

Michael Yackira

Beyond the Sun

Average residential rates in cents per kilowatt hour (Feb. 2011)

  • California 14.83
  • Nevada 11.86
  • Colorado 10.5
  • New Mexico 10.18
  • Arizona 9.93
  • Mountain States Avg: 9.76
  • Oregon 9.39
  • Montana 9.33
  • Wyoming 8.5
  • Utah 8.35
  • Washington 8.04
  • Idaho 7.79
  • Source: U.S. Energy Information Association

CARSON CITY — NV Energy wants general rates on its Southern Nevada residential customers to rise 24 percent in January, according to the state’s Consumer Protection Bureau.

If the Nevada Public Utilities Commission approves the increase, power bills will be unchanged when it takes effect. That’s because the price of natural gas and power purchases have been lower than expected, and customers have overpaid the utility by $185 million. Additionally, the company wants to defer for three years $64 million it believes it is owed from ratepayers.

In a news release this week, the company said it wants to keep rates flat until the state’s economy improves.

But consumer advocates don’t see the utility’s request for $246 million in additional revenue as any favor to customers.

“This is a very greedy request,” said Eric Witkoski, a consumer advocate who runs the bureau. “It’s huge. They’re seeking higher profits and trying to tell customers not to worry. We believe the Public Utilities Commission of Nevada will see through it.”

A NV Energy spokeswoman said the 24 percent increase represents only a portion of the charges the company is requesting. She said the overall rate increase for customers would be 11.52 percent, but the increase in their bill will be whittled down to nothing after the rebate from lower power costs is included.

“That’s looking at one component of the rate, while the company presents it as an overall impact to a customer’s bill,” Andrea Smith, a NV Energy spokeswoman, said.

Witkoski noted that NV Energy is seeking to raise its “return on equity” from 10.5 percent, set in 2008 during its last general rate case, to 11.25 percent. The commission approved a return on equity for the Northern Nevada sister utility of 10 percent this year.

Michael Yackira, NV Energy CEO, said that increase is justified. “We’ve invested billions of dollars to ensure Nevadans have reliable service and reasonable prices,” he said. But Yackira indicated the request is an initial offer that’s likely to change: “That’s the part of case that’s always argued. It never turns out to be what anyone’s … position is.”

He noted the actual return on the company’s investments has been 7 percent.

The commission, which is appointed by the governor, will determine the size of the rate increase and return on investment following public hearings.

Nevada has the highest energy prices of any Western state, other than California, according to the U.S. Energy Information Agency. Arizona, New Mexico and Colorado have energy rates of about 10 cents per kilowatt hour.

If the rate increase were approved, the overall residential kilowatt hour price would remain at its current rate of 12 cents.

Yackira said investments the utility has made have put it and its customers on solid footing for the future. However, the system has been hurt by decisions made 25 years ago to purchase power from third parties and not produce its own.

Customer complaints increase during summer months, when power bills spike because of the heat.

“The most difficult things for customers is when it gets to be 110 degrees plus,” Yackira said. He noted the company offered payment plans to level bills for Southern Nevada customers year round.

The rate case filed Monday includes costs associated with the Harry Allen power plant, outside Las Vegas, which was approved in 2008 and went online this year. That plant, which was opposed by consumer advocates, cost more than $638 million.

The $64 million, which the company wants deferred because of the recession, would collect interest at 8 percent, compounded monthly.

That means customers would face much higher costs once the company tries to recoup those costs.

“At the end, it’s like a huge balloon payment,” said Dan Jacobsen of the Consumer Protection Bureau. The $64 million would end up costing $130 million by the time it’s done.

Witkoski said NV Energy will submit a number of other applications. They include the cost of new “smart meters” the company has installed in customers’ homes and a $500 million north-south transmission line that the company is building on the east side of the state.

Additionally, a bill passed shortly before the end of the Nevada Legislature on Tuesday would allow the company to build up to a $1 billion transmission line to export renewable energy to other states, according to the Consumer Protection Bureau.

“We will see a huge increase now, and a huge increase three years from now,” Jacobsen said.

Yackira said the legislation would protect ratepayers, or possibly cause rates to go down.

He called the $1 billion figure a “red herring.”

“We don’t know what the demand is” for transmission exporting. “It could be $100 million. It could be zero,” he said.

According to an investor fact sheet on NV Energy’s website, the company’s other proposed increases in revenue include:

• $99 million for the Harry Allen plant.

• $85 million for cost of capital.

• $40 million for Increased depreciation and amortization schedules.

• $10 million for energy efficiency programs.

Southern Nevada energy rates will rise 3.4 percent tied to a separate rate case decided by the Public Utilities Commission in May. NV Energy made that application to recover the cost of energy efficiency programs, and sales that the company lost because of those programs.

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  1. Let me agree with Joe 100,000,000,000%
    we have a hydro power plant in our backyard, and get zero benefit from it, NVenergy is building solar fields with our money, and then will sell that power to other states. And we get the pleasure of having higher rates, maybe they should call themselves an [F][U]TILITY

    Jonathan

  2. The market rate for money these days is pretty close to zero short term, rising to between 4 and 5 percent long term. Compare that to the "negotiating position" put forward as "justification" for rate increases. They are entitled to a reasonable return on capital but the market should set what constitutes a reasonable return -- and the market right now is saying that a reasonable return is far lower than what Nevada Energy wants.

  3. This is just another sleight of hand on the part of NVEnergy. It is bad enough, thousands of folks working for the school district are struggling with frozen pay, now soon to be cut pay, 3 years from now these power rates will be up, and NVEnergy will tell everyone this is a "done deal" as of 3 years ago.

    NO NO NO to this request.
    Why is it, NVEnergy is always going to the PUC to mess around with our rates? We are in a recession/depression, and can ill afford paying more to NVEnergy's greedy stockholders.

  4. It is time to revisit public ownership of this utility, to provide power at cost, rather than an inflated amount for corporate profits. Other states have public utility districts, with potential savings to rate payers.

  5. If the public allows the Utilities Commission to apporve a 24% increase then we are all fools. It takes "big ones" for Yackira to even ask. As CEO he knows given the economy, interest rates and the CPI there is no way costs have increased anywhere close to a level that would justify a substantial increase. Perhaps his total compensation should be made public; bet he can afford a 24% increase!

    By the way NV Enegy which is owned by a coal company has not experienced increases in dirty, stinky coal!

  6. I say fire NV energy and get power somewhere else.

  7. Mismanagement! Nevada Energy has been mismanaged for years. Just a few short years ago they failed to acquire enough energy and we were placed on brown out alerts. So much came out then about their mismanagement.

    At that time there was discussion about public entities taking over the utility. It's time to revisit that idea.

    The Public Utility Commission should hear from each and every southern Nevadan about this farce.

  8. An article in the other newspaper's business section today talks about a bill being rushed through the Legislature that will keep confidential power purchase agreements between utilities and renewable power developers. Even the Public Utilities Commission will be barred from disclosing the terms publicly.

    This whole thing is a scam and we are the ones getting shafted!

  9. Time to leave....
    If this passes, it will simply become too expensive for the average Nevadan to live here.

  10. ...I'll bet they will laugh their a$$es off at the public's reception to their "plan".
    I'd bet that RIGHT NOW, some NV Energy muckety-muck is reading this stuff and LAUGHING.

  11. This deal, its mathematics, its sleight of hand, all of it, stinks.

    No. Hell no.

    And its time to revisit the monopoly NV Energy has. From the craziness of charging us more because we conserve to this nutty '24% increase thats not an increase for now and might not be for the future but might be' crap, I'm sick of carrying these clowns with my dollars. either break up the monopoly or have the taxpayers take it over. Of course, we would have to oust Gov. Sandogibbons first.

  12. You can bet the stock options will be juicy for the executives of NVEnergy. Privatized utility companies have reeked financial havoc all through this country, particularly with Enron, the bonds of which California will be paying for the next 20 years or so.

    Yackira has himself and cohorts of greed in mind. "For profit" management of public utilities is a joke.

  13. What's worse, we have no control over the PUC.

  14. No wonder Yackira's grinning.

    "It is the eternal struggle between these two principles -- right and wrong -- throughout the world ... It is the same spirit that says, 'You toil and earn the bread, and I'll eat it.'" -- Abraham Lincoln, from Reply, Seventh and Last Joint Debate with Judge Douglas, 1858

  15. NV energy is taking advantage of the fact that it has a monopoly and the process is political. Consumers are not protected by the commission or the legislature as high powered lobbyists lean on politicians and commission members.

    Nevada needs competition in energy production and should allow the establishment of energy cooperatives as do other states. Co-ops usually create single rate plans instead of forcing Nevadans into multilayered plans. Co-ops create lower costs by shopping for the lowest energy prices while not being required to buy from any one source.

    NVEnergy is bombarding the Nevada Public Utilities Commission with multiple rate requests for multiple projects as a tactic to confuse and overwhelm the public and legislators. LIke any other tactic, its intent is to achieve increases regardless of how many proposals are approved. They know that all will likely be approved, some with modifications.

    Delaying payback of 64 million for 3 years with interest at 8% is a tactic to increase revenues and has nothing to do with wanting to wait until the economy improves. That is a Trojan horse. If NVEnergy cared for ratepayers they wouldn't be shotgunning a plethora of rate increases, some for questionable projects, especially one where NV consumers get to pay for a transmission line used to sell electricity to California markets promising, but not guaranteeing we will be repaid.

    We all need to do some research to be truly informed, then pressure our legislators to hold NVEnergy accountable. Otherwise, without due diligence, Nevadans are going to be steamrolled and end up with energy bills we can't afford. Hate the HOA abuses we read about? Wait until a percentage of consumers can't afford to cool their homes.

    This will affect those who have been in their homes the longest and those who are buying now thinking they can finally afford a home due to low prices. Elderly and young children will suffer along with those who have illnesses when folks can't afford to turn their AC on. Future tax and energy increases are inevitable. If we don't control them they will control us.

    If we don't take action, dark days may be ahead. NVEnergy will always find a reason to request rate increases. They have no incentive to control costs as the system works now. Only competition can do that and the best competition comes from consumer owned energy providers like co-ops. Like a credit union, energy co-ops are owned and controlled by their members who are the consumers. Their board members are from their own ranks and their only incentive is to provide the best customer service at the lowest rates.

    I'm sure there are other solutions as well and that's fine. I recommend co-ops as I have personal experience with both conventional providers and co-ops and the co-op was clearly superior.

  16. First, they tell us we are consuming too much energy, it is costing them too much to provide for the over-usage so they need to raise the rates, but if Nevadans will just learn to conserve energy, they won't need to keep raising the rates to meet the demand. So, we learned to conserve.
    Then they come back, hat in hand, crying that Nevadans are conserving too much energy, they have lost millions of dollars because our bills are lower thanks to the conservation they begged us to do, so they need to raise the rates because we are buying less energy.
    Now they tell us they want to raise the rates again, but it won't cost us anything. Then they tell us that the reason they want to raise the rates THIS TIME is because they need to pay for a system that will allow them to sell OUR renewable energy to other states, rather than letting us use it here.
    This town was built on card games and this is just another card game. It's called "three-card-monty" and it is played by small-time hustlers on street corners in crack-and-hooker infested neighborhoods all over the country.
    NV Energy is no better than those gap-toothed hustlers standing on the corner, their hands flying back and forth at warp speed going, "Can you still see your card? Are you watching your card now? Keep an eye on your card, sucker, keep an eye on your card now!"
    They belong in jail, along with all of the other frauds, hustlers and skeeves, the shady tactics of whom they seem so eager to adopt.

  17. Here in California P.G.&E charges $0.12233 per kwh for the baseline rate (turn on your air conditioner and you'll find yourself in a higher rate teir). No difference between apartment vs. single family home. Last summer we left the A.C. off, and our temps are similar to L.V. Just had to cut expense and that was one way to do it.
    They are asking for rate increases here too. Mostly to raise the cost of energy to those of us who conserve and live in smaller houses so they can lower the high tier rates for those living in 5,000 sf houses.
    In Nevada, It looks like you should declare your house a business and demand the "business" rate (see rate chart at top of article).

  18. These folks are no different than government.
    Whenever you have monopoly control you leave yourself at the mercy of the controller.

    What I'd like to see is a top to bottom audit of NV Energy's finances, the pay packages, pension packages and employee benefits costs be made public from the janitor to the CEO. What you'll find is that ratepayers are probably footing large chunks, if not all of these folks' pensions and benefits.

    This is Obama's crony Capitalism extended to the illogical conclusion. And I'm surprised that the usual liberal supporters aren't dancing in the aisles seeing this. It just goes to show that when it's the other guy's ox being gored that's ok. But when it's your ox then that's a COMPLETELY different story. Sooner or later you're going to find out we all fall under that umbrella definition of "rich" and it will be too late to do anything about it. Do the right thing and join with the Tea Party supporters now and take back control of your own destiny.

  19. It gets worse, these new "smart" meters will allow them to charge different rates at different times of the day.

    I work from home, can you say "screwed"?

  20. Go get em Birdie.....2 cups of coffee and I say turn you lose on them.

    Actually I would like to see mred and birdie turned loose on NV Energy!

    I think we can all agree that this is an absolute outrage!

    P.S. Why do NV Energy employees always drive Chevy Tahoe's? That price tag is way beyond what they should be driving. And I see 100's of them all over Vegas.

  21. Yep, go green! And if you get off the grid completely they'll charge a disconnect fee equal to what you would have paid for the next 25 years at a minimum.

    We need to find a way to hold the PUC accountable to the public.

  22. Yackira should be in jail

  23. "NV Energy will not tell you this but you are a customer and you have the right to refuse to have this meter placed on your house."

    I wish I had known that 6 months ago when they changed mine out. :(

    And the kicker is that these new "smart" meters are not capable of letting you feed energy back to the grid if you install solar panels or adopt some other means of doing so.

  24. I demand people go for a class action lawsuit for paying these @ssclowns @ NV Energy in the first place, then tell the PUC to find a way to make a grid from Home Owners Associations & Mini-Malls to produce their own power from rooftop.

  25. I agree with everyone that disagrees. So, please help me understand this. If this is BAD for us bill payers and every bill payer agrees, then why can't we stop this from happening?

    WHAT CAN WE DO TO MAKE SURE THAT THIS RATE INCREASE DOES NOT GO INTO EFFECT?