NV Energy has proposed an $83.7 million decrease in its annually collected revenue following a reduction in the corporate tax rate, which could lead to an average power decrease of $4 a month for Southern Nevada ratepayers.
In a letter sent to the Public Utilities Commission on Wednesday, NV Energy requested that state energy regulators cut their revenue requirement by millions to reflect the 14 percent reduction in corporate taxes under the Republican tax bill passed last year. If approved, the reduction in rates will take effect on April 1 and stay in place until the company’s next general rate case three years from now.
The utility said it estimated the average single-family residential electric bill to reduce by $4.08 per month for Southern Nevadans, while residential customers in Northern Nevada will see an average electric bill reduction of $2.81 per month (each area of the state is served by a different entity under NV Energy, and both were affected differently by the tax bill).
“The federal tax reform bill has resulted in a direct reduction in our tax obligations, and as opposed to waiting until the next general rate reviews, which are required by law every three years, passing these savings on now is simply the right thing to do,” said NV Energy CEO Paul Caudill. “The prices our customers pay today are very competitive when compared to the regional and national markets. This opportunity is an important one in our commitment to keep prices low for another decade.”
The utility and several other entities, including a group of major Strip properties, a nonprofit backed by Switch and the state’s Consumer Advocate, requested in January that the PUC revise the rates approved during the company’s general rate case, which was approved just days after the Republican tax bill was passed last December.
A group of large gaming companies estimated in a filing last month that Nevada Power (the entity servicing Southern Nevada) would save $93 million over the next three years, and Sierra Pacific Power (which serves Northern Nevada) would save $29 million. The utility said it would see an annual reduction in revenue of $58.8 million to Nevada Power and $24.9 million for Sierra Pacific Power.
The utility said in a white paper accompanying the request that the reduction will appear as a separate line item on customer bills. It also said a consumer session, where members of the public and other interested parties can weigh in on the proposed change, wasn’t required for this change.