NV Energy is proposing to cut rates for Northern Nevada customers over the next three years, a move that could shave up to 50 cents off the average monthly residential electric bill if approved.
Sierra Pacific Power, the subsidiary of NV Energy that provides electric service for most of Northern Nevada, made the request in its general rate case filed with the state’s Public Utilities Commission on Monday, as part of an overall request to decrease utility revenues by $5 million annually.
Such a decrease — which comes as the utility expects its Northern Nevada operating expenses to actually increase by $5.3 million — would result in an expected $0.49 decrease in monthly electric bills for residential customers and $2.10 for a typical small business. But it also comes with a request by the utility to slightly increase its authorized rate of return (profit the company is allowed to earn on electric sales) from 6.65 percent to 7 percent.
“Our desired outcome in this case is a settlement between all parties that reduces the rates our Northern Nevada customers pay by $5 million,” NV Energy CEO Doug Cannon said in a statement. “All of us at NV Energy are laser-focused on operating our business in a way that keeps costs low while providing the safe, reliable electric service our customers expect and deserve.”
If approved, the new rates would begin in 2020 and run through 2022, and would mark nearly 15 years since the commission last approved any increase in the base electric tariff rate charged to its customers. The company also sought and received approval from the Commission in early 2018 to reduce statewide revenues by nearly $84 million after corporate tax rates were slashed by 14 percent in the federal Tax Cuts and Jobs Act.
In its application filed Monday, the company stated that requesting lower rates despite the cost of service rising was “unprecedented.”
“The Company is focused on living within its means,” the application states. “This focus has served Sierra’s customers well.”
The filing also contains lengthy written testimony from utility employees on everything from company finance to the expected cost of operating NV Energy’s generation and transmission systems. In the filings, NV Energy Chief Financial Officer Michael Cole wrote that the utility expected to “soon” file an application to add another 1,190 megawatts in long-term renewable power contracts, months after the company received approval by the PUC to add 1,001 megawatts of solar power through contracts with six new large-scale solar plants.
Nevada law requires public utilities such as NV Energy to file general rate cases every three years if they wish to change the electric rates charged to customers. Once filed with the Public Utilities Commission, interested parties such as business or consumer groups as well as the state-run Bureau of Consumer Protection are allowed to intervene and file comments in the case over a six-month period, complete with public hearings and a final order from the three-member Commission.
Although NV Energy provides electric service throughout the entire state, the subsidiary companies in Northern Nevada (Sierra Pacific Power) and Southern Nevada (Nevada Power) file separate general rate cases given different market factors in each part of the state.
But the filing may be one of the last completed by the utility after Gov. Steve Sisolak signed a bill, SB300, that would allow NV Energy to use alternative ratemaking mechanisms outside of the normal process for setting rates. Instead, the new law requires the commission to open a docket and potentially allow the electric company to use a variety of “alternative” mechanisms that would adjust electric rates automatically based on various triggers and performances.