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Bill would let NV Energy seek another rate increase for energy efficiency

Updated Friday, May 6, 2011 | 3:13 p.m.

Beyond the Sun

CARSON CITY — The state Consumer Protection Bureau is warning that NV Energy would be able to ask for yet another rate increase for customers’ energy efficiency under a bill being considered by the Nevada Legislature.

Assembly Bill 150 would allow the utility to recover revenue it lost because of energy efficiency programs that are not tangible, or installed, such as sending customers comparisons of their energy use and their neighbors’.

Empowered by 2009 legislation, NV Energy is seeking a rate increase for the loss of sales because customers are conserving electricity by replacing old appliances such as air conditioners and refrigerators with new ones, and with the use of devices such as energy-efficient appliances and light bulbs. The company wants the Nevada Public Utilities Commission’s approval for a 5 percent rate increase for Southern Nevada customers, and 3 percent rate increase for Northern Nevada customers, to recover revenue it would have received without those conservation incentives.

The bill being considered this session has broad support from the environmental community, NV Energy and Jon Wellinghoff, former consumer advocate in Nevada and chairman of the Federal Energy Regulatory Commission.

Wellinghoff wrote in a letter to lawmakers that new studies prove people can save energy with more information.

“These types of programs directly engage ratepayers on their energy usage by giving them better information, and thereby motivating them to use less energy and save money,” he wrote.

The state’s Consumer Protection Bureau warned the legislation would lead to a power rate increase, similar to the case residents are facing.

“It’s hard enough to explain that if you install a new light bulb, you’re still going to have a rate increase,” said Dan Jacobsen of the bureau. “It’s going to be harder to explain to people that if you decide to keep your home hotter (in the summer), because you want to conserve energy, your rate is going to increase.”

The example used in a hearing on Wednesday is Opower, a Virginia company, would contract with NV Energy to send customers an analysis of their energy use compared with their neighbors. The analysis would suggest ways each resident could improve efficiencies at their home. There would also be a test group and sampling, to provide proof about how much savings could be attributed to the program.

The average savings of the program would be $20 per house per year, and residents would save an estimated $15 million, according to Jeff Lyng, Opower director of market development.

Jacobsen on Wednesday offered an amendment to allow NV Energy to recover the hard costs of the programs, but not recoup the energy savings from it.

Assemblyman David Bobzien, D-Reno, who is a sponsor of the bill, said he believes from a policy perspective that programs such as comparisons for customers should be treated the same as programs such as replacing air conditioners and refrigerators.

“If the company is going to get money to promote conservation, and prevent the need for coal-fired plants, then we should at least use the most effective strategies to promote conservation,” he said.

Ultimately it’s up to the three-member PUC, which is appointed by the governor, to decide what rate increases are allowed, he said.

Senate Majority Leader Steven Horsford, D-North Las Vegas, who sponsored Senate Bill 358, the bill that passed in 2009 that allowed the company to seek its current rate increase, said this week he has yet to study the provision of the latest proposed legislation that would allow for another rate increase.

He said there are long-term costs and benefits associated with preventing or delaying new power plants.

A Nevada Senate Committee unanimously passed AB150 out of committee on Friday afternoon. Sen. James Settlemeyer, R-Minden, said he had considered an amendment by the Bureau of Consumer Protection to limit the impact on rates, but didn't want to add it out of respect for the sponsor of the bill, Bobzien, he said. There was no other discussion.

The bill now goes to the Senate floor.

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  1. Horsford is getting paid by Nevada Power. Crook

  2. NV Energy is a for-profit business. Their mission very reasonably includes making a return on investment for their share holders. Businesses establish operational baseline expenses and virtually never downsize voluntarily.

    A 5% reduction in revenue stream cannot immediately result in a 5% downsizing. Financing periods for power plants, substations, powerlines, etc., are typically over decades. It is probable that NV Energy is still making payments on their percentage ownership of the Mohave Power Plant that was shutdown in 2005.

    Southern Nevada has amazing solar resources and NV Energy can off-set a growing percentage of their operations by taking advantage of this opportunity. We are watching to see if they take the initiative to do so.

    In the mean time, they are going after low hanging fruit. We have directly met with the PUC and State of Nevada legislators to encourage them to make it easier for NV Energy to generate and bring home new revenues from outside Nevada to help boost our local economies.

    We have to work together - contrary to the common media and political message of "Economic Recovery", we have more and new challenges ahead.

  3. 'NV Energy is a for-profit business' - bingo. Remember when SNWA wanted to buy the power company and make it a public utility? Now we have to give up savings on power conservation to support NV Energy's profits.
    Remember the Enron-created power crisis? Public utility L.A. Water and Power kept the lights on and did not rip off their customers for it. It is indeed definite that NV Energy is still making payments on the fraudulent contracts created during that crisis.
    We have to work together to help wealthy investors get wealthier.

  4. Rate increases? To punish consumers for efficiency? Does this make sense? Or is this another example of limitless greed from the corporate elite?

    Here we live in a state that may very well cut education to Third World levels while it may allow a rate hike to punish consumers for learning how to conserve energy. Stupid!

    What a sad state of affairs, in an even sadder state. My view: let NV Energy live within its means! And if the state budget is going to be cut so drastically that working Nevadans are deprived of vital public services, then don't make their lives even harder by allowing this senseless rate hike. Nix it!