Imagine paying Walmart $45 every time you walk into the store whether you buy a carton of milk or a cart full of groceries.

Well, that’s the kind of “deal” NV Energy wants the Nevada Public Utilities Commission to approve right now — give it more money in Northern Nevada to provide less service. Moreover, it wants to do this at the expense of the smallest energy users.

Specifically, NV Energy wants authorization to almost triple what’s called the monthly fixed basic service charge on power bills, which would lock in higher costs for the smallest energy users who will have the higher fixed charge on their bills. This request not only heavily impacts small power users such as most working class and low-income families, but also disincentives energy conscious consumers to install energy efficiency measures.  

As Nevada’s first consumer advocate under the Nevada Attorney General's Bureau of Consumer Protection and the longest serving chairman of the Federal Energy Regulatory Commission, with more than 40 years of leadership experience in energy policy, I know a bad deal for consumers when I see one. The Public Utilities Commission of Nevada should reject the Northern Nevada basic service charge increase now on the table by NV Energy.

There are two major components of your monthly energy bill: a fixed, basic service charge paid regardless of whether you use any energy from the power company, and an additional volumetric rate based on how many kilowatt-hours of energy you actually consume during the month.

NV Energy proposes to increase the basic service charge on a monthly residential  customer bill from $16.50 to $45.30. This proposed fixed charge increase of 175 percent will be accompanied by a lower volumetric charge on the amount of energy a customer uses in their home. If approved, this means a smaller share of your total bill will be driven by how much energy you actually use in your home.

While this may sound like a harmless change, think again. This means NV Energy will collect more money by doing less, i.e. providing less electricity through its lines and wires. You will pay $45.30 each month or $543.60 per year no matter how much — or how little — energy you use. It’s a great deal, though, for high-income consumers, who use lots of energy.

But the proposed bill restructuring will have the greatest impact on thousands of low-income consumers whose monthly electricity usage is below average. Those low energy users, especially those that are lower- or fixed-income consumers, will be hit the hardest, as a larger share of their income goes to pay power bills.

A higher fixed charge on bills is by its very nature effectively a regressive tax — hurting our most energy-insecure families. The near-tripling of the basic service charge subsidizes wasteful energy users off the backs of families who try to keep energy use low.

According to testimony filed by Western Resource Advocates, a nonprofit environmental watchdog group, the new rate structure would result in higher bills for most families. In fact, because most families aren’t high energy users, a large majority of customers (82 percent) would see a monthly bill increase.

The Bureau of Consumer Protection in the Nevada Attorney General’s Office, in its testimony in this case, admonished NV Energy for its proposal. It recommends that the Public Utilities Commission not only deny the fixed charge increase, but that it reduce it from $16.50 to $12.50.

NV Energy’s proposal would chill any incentive to conserve energy or make investments to make homes more energy efficient, safe and secure. As a state, should we approve rates that limit the incentive to do the right thing? No, of course not.

You have a voice in this issue. You can write to the Nevada Public Utilities Commission and share your thoughts about NV Energy’s 175 percent basic service charge increase.

We must ensure Northern Nevadans have energy rates that encourage an efficient, safe and secure energy future.

Jon Wellinghoff was the longest serving chairman of the Federal Energy Regulatory Commission (2009-2013). He previously served as deputy district attorney in the Washoe County District Attorney's Consumer Fraud Division and was Nevada's first Consumer Advocate for Customers of Public Utilities (1981-1988) in the Nevada Attorney General's Bureau of Consumer Protection.

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