After seeking to collect a half billion dollars from customers to bolster its wildfire insurance, NV Energy has secured an additional $250 million in coverage. 

But Nevada's largest electric utility is still moving forward with its request to have ratepayers help foot the bill for a $500 million self-funded policy the utility can tap in the event its infrastructure causes a catastrophic blaze.

"The fact that somebody wants to be self insured, that's not particularly unusual in the business world," said longtime Reno attorney Matt Sharp, who specializes in insurance bad faith and wildfire claims. "The fact they want their customers to pay for it is."

The utility previously carried $500 million in coverage, and early last year, told state energy regulators it wanted to increase its coverage as wildfires grow in size and cost across the West. 

But NV Energy said it was struggling to find commercial coverage and asked state regulators if it could instead collect $500 million from ratepayers over a decade to bring its coverage up to $1 billion. 

State energy regulators agreed it made sense for NV Energy to carry between $1 billion and $1.5 billion in coverage, an amount that would put the utility's coverage in line with other Western power providers such as California's PG&E and Southern California Edison.

But they weren't convinced customers should pay for it. 

Over the last year and a half, the utility, staff at the Public Utilities Commission of Nevada (PUCN) and others have wrangled over what a self-funded insurance policy could look like and who would pay for it.

Earlier this year, the utility added a wrinkle to the debate — it acquired nearly $250 million in additional commercial coverage.

NV Energy now has around $772.5 million in wildfire liability coverage, but even that amount is "not adequate to cover us in the case of a catastrophic wildfire," NV Energy executive and lobbyist Tony Sanchez told lawmakers in April.

Commercial wildfire insurance markets are highly volatile, according to company spokesperson Katie Jo Collier. A self-insured structure would provide long-term stability, cost control and flexibility, she told The Indy in an email. 

But major ratepayers aren't on board.

"This additional insurance coverage changes NV Energy's fundamental justification for seeking captive self-insurance," according to testimony before the commission from energy and utilities consultant Bradley Mullins, representing a variety of businesses including casinos and Nevada Gold Mines. "NV Energy represented that additional commercial insurance was not available. … That is no longer the case."

Opponents of the self-funded insurance plan also caution that the utility could bring forward legislation during the 2027 session to cap its liability in the case of a utility-started wildfire. NV Energy's parent company, Berkshire Hathaway, has successfully pushed similar legislation in other states where its subsidiaries operate.

"It is not reasonable for utilities' ratepayers to be treated as an insurer of last resort for catastrophic wildfires," Mullins said. "Requiring ratepayers to absorb the costs of catastrophic wildfires … effectively converts ratepayers into a backstop insurer for risks they do not control."

Is self-insurance cost effective? 

Self-funded insurance is often the most economically practical route, according to Michael Taylor, an assistant economics professor at UNR.

"This could be the most cost-effective thing for NV Energy and ratepayers as well," he said.

Paying into a self-funded policy rather than a commercial policy would "keep premium dollars within Nevada, where they can ultimately provide value to customers if claims are not made against the policy rather than being paid to third-party insurers," Collier wrote — basically, reducing how much is spent annually on premiums.

And the utility would want to avoid dipping into the insurance fund, Taylor said, likely spurring it to focus on its wildfire mitigation strategies.

NV Energy spent $265.6 million between 2020 and 2024 on wildfire mitigation, dwarfing the roughly $5.3 million in wildfire liability claims it has paid out since 2018.

PUCN staff are recommending a two-tiered billing structure if state energy regulators approve the proposal. 

All customers would pay a flat monthly charge, with the newest estimates from the utility putting costs at $3.02 per month for Northern Nevada residential customers and $0.21 per month for Southern Nevada residential customers — an 89 percent and 11 percent split. 

Additionally, customers living in the utility's Natural Disaster Protection Plan Tier 3 fire risk zones — Lake Tahoe, Virginia City Highlands, Genoa, Mount Charleston and portions of Clear Creek, south of Carson City — would pay additional fees.

A changing legal landscape 

In states where Berkshire Hathaway subsidiaries provide power, legislative efforts have been stepped up to reduce the liability utilities face from wildfires. 

In Utah, a law passed in 2020 shields utilities from litigation if they submit and follow wildfire protection plans every three years. In 2024, the state passed a law establishing a ratepayer-financed fund for wildfire insurance claims. 

Utah's structure "is basically a giveaway for the power companies," Sharp said. 

Wyoming has adopted legislation shielding its utilities from litigation if they are in compliance with their state-approved wildfire mitigation plans, as has Idaho. 

When asked by The Indy whether it plans to bring forward similar legislation in next year's legislative session, the utility did not answer directly but said that it "continues to evaluate a range of potential policy options related to wildfire liability and insurance and will work with regulators and policymakers as they consider the best path forward for Nevada."

Sharp said that if Nevada passes legislation limiting NV Energy's wildfire liability, the company will hold all the cards when it comes to customer reimbursement. NV Energy would not only collect and manage the insurance money, but would then be able to control how much is paid out in the event of a fire.

Mullins, the consultant, suggested Nevada's state energy regulators shouldn't authorize any additional self-insurance for NV Energy until at least the end of the 2027 legislative session.

"If NV Energy successfully pursues legislative solutions in the upcoming 2027 session, the change in legal landscape surrounding wildfire liability policies may impact any remaining need for the self-insurance policy altogether," he said.

Nevada's 2026 wildfire season forecast

Since 1980, wildfires have burned nearly 16 million acres in Nevada. Last year, more than 452,000 acres burned — about average for the state — after two years of wetter winters and fewer wildfires. 

This year, "We have some current conditions that are pretty dire," State Forester and Fire Warden Ryan Shane said Wednesday at the governor's annual wildfire briefing in Carson City.

An exceptionally dry winter across much of the Western United States and this year's growth of grasses and flammable fuels, combined with combustible materials known as "carryover fuels" from last year that weren't tamped down by snowpack, is setting the state up to have a "challenging" season, Shane said. 

So far, 265 acres have burned this year in the state from 60 fires, with the bulk of wildfire season still looming. 

Firefighters will rely on nearly 100 wildfire tracking cameras spread throughout the state to help detect wildfires early, officials said, and hope that intensive treatment efforts such as mechanical thinning and controlled burns across the state will help mitigate fires. 

Last year, more than 400,000 acres were treated across the state.