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Energy | Government

NV Energy backs off proposed residential rate hike

NV Energy corporate headquarters as seen on Wednesday, November 22, 2017. (Jeff Scheid/The Nevada Independent)

NV Energy is — for the time being — backing away from a contentious proposal to raise fixed electric costs for a large number of their customers during the next three years.

In testimony submitted to the state’s Public Utilities Commission last week, NV Energy analyst Laura Walsh said that the utility had decided to delay a push to increase the basic service charge intended to defray expected costs associated with a 2017 legislative measure reinstating favorable rates for rooftop solar customers.

It’s one of several attempts the utility has made throughout 2017 to rebalance rates charged to the company’s 517,000 customers in order to recoup the expected cost from “net metering” participants — who under AB405 receive a credit tied to the retail rate of electricity for excess energy produced by rooftop solar panels.

In a statement, NV Energy CEO Paul Caudill said that the company was backing down from the proposal because of concerns raised by customers and other interested parties.

“Withdrawing our request to increase the basic service charge for residential customers in southern Nevada simply came down to doing what’s best for our customers,” Caudill said in an email. “It addresses concerns we heard from our customers and key stakeholders that an increase was punitive related to the passage of AB405 and we did not want to leave that impression. We are moving forward, with a commitment to all of our customers, including those who choose to install private rooftop solar.”

The original request to raise the rates came after the PUC issued an order in August denying NV Energy’s request to raise baseline power rates to help pay for the expected higher cost of serving customers enrolled in the new net metering program.

The utility’s proposed rate hike was estimated to be an increase of slightly more than 2 percent for an average residential customer based on a $4 monthly increase in the basic service charge and corresponding decrease in the volumetric (based on electric use) charge. That proposal was instead shifted to the company’s general rate case, a state-mandated process used every three years to assess and finalize rates charged to all electric customers.

But Nevada Consumer Advocate Ernest Figueroa raised a red flag over that proposed hike, saying in September that the proposed increase ran contrary to the utility’s public position that the general rate case wouldn’t result in an increase in residential power bills. The agency requested — and received — an additional consumer session in the case to garner additional public input into the proposed rate hike. The utility pushed back, saying it gave the public “sufficient” notice on any change in the rates.

But NV Energy’s decision to withdraw the basic service charge increase doesn’t mean it’s the end of the request — Walsh’s testimony notes that the utility’s proposal will “defer” any collection or changes of rates until the next general rate case, while still using a “regulatory asset mechanism” to measure any shortfall in revenue from maintaining the current rates.

The PUC itself still needs to approve the general rate case, which was opened on June 5 and under Nevada law must be processed and approved within the next 210 days.

Andrew Maggi, head of the Nevada Conservation League, said that his organization and several other environmental and progressive groups had launched a signature-gathering campaign opposing the proposed rate increase, which he said had garnered more than 1,000 responses by Thanksgiving.

Maggi said the increased fixed costs was the group’s primary focus in the general rate case, as he said it would have a greater impact on rooftop solar and energy efficiency customers, as well as low-income power users on fixed incomes.

“This is fundamentally good news,” he said. “It’s good news for consumers, it’s good news for energy efficiency, for clean energy in our homes. This is really good news.”

Disclosure: NV Energy has donated to The Nevada Independent. You can see a full list of donors here.
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