NV Energy has overcharged tens of thousands of customers by millions of dollars since 2001, according to an investigation by state energy regulatory staff released Wednesday.

The investigation by staff at the Public Utilities Commission of Nevada (PUCN) shows that between April 1, 2017, and April 1, 2024, the utility overcharged roughly 60,000 residential customers more than $17 million by misclassifying their types of residences — meaning they were charged a higher rate than they should have been. The report calls for the commission to open a formal investigatory docket to look into whether the company’s actions were unlawful.

The utility also overcharged an additional 20,000 multifamily customers during that time for an undisclosed amount.

The total number of customers overcharged and how much they were overbilled is likely much higher because the utility claims it lacks billing data from 2001 to mid-2017.

Despite overcharging tens of thousands of customers for up to 23 years, the utility only provided refunds to a portion of the overcharged customers, issuing less than $2 million in refunds.

“NV Energy has a responsibility to get it right,” Kristee Watson, executive director of the Nevada Conservation League, said in a statement. “Instead, they stole more than [$17 million] from over 80,000 customers and didn’t say a word until regulators stepped in, disconnecting power to impacted customers in some instances. The corporate shareholders of Berkshire Hathaway must pay back every dollar owed, with interest, as soon as possible.”

PUCN staff said they are uncertain whether the utility will continue to identify misclassified customers, and have asked state energy regulators to look into whether the utility is legally obligated to fully refund overcharged customers — even the customers were overcharged before 2017.

PUCN staff are also recommending state energy regulators require the utility to fully refund all customers.  

State energy regulators learned of the misclassification through consumer complaints about insufficient refunds and, in January, PUCN regulatory staff began an informal investigation into the issue.

According to regulators, the utility did not voluntarily disclose its decades-long misclassifications, and NV Energy tapped into an incorrect rule to guide its refunds that ultimately led to the issuing of only six months’ worth of refunds to a limited subset of customers.

“NV Energy discovered a number of customers who were charged the wrong rate for their property type, informed the Public Utilities Commission staff of the issue and notified those customers and started issuing refunds to customers that were overcharged,” Meghin Delaney, media relations manager for the utility, told The Nevada Independent in an emailed statement.

Over a seven year period starting in April 2017, NV Energy’s residential rate misclassification resulted in nearly 13,000 Northern Nevada customers at more than 4,800 locations and nearly 47,000 customers at more than 17,000 locations in Southern Nevada being overcharged more than $17 million. 

Those customers were multifamily residences misclassified as single-family residences. During that same period, the utility undercharged 5,438 customers $2.58 million after misclassifying single-family residences as multifamily residences. Delaney said NV Energy has not sought repayment from the undercharged customers.

The discovery of widespread misclassifications caused the utility to conduct an internal audit within its customer billing information system, which the utility told PUCN staff was completed in January, although it later informed staff that an additional 20,000 misclassified multifamily accounts in Southern Nevada had been identified. The utility did not specify how many of those customers were overcharged or for how much. 

NV Energy has not identified a cause for all the misclassifications. 

The utility did not voluntarily disclose the misclassifications to state energy regulators. Instead, it relied on a rule dating back to 1980 that only applies if a Southern Nevada customer misclassifies their residence when signing up for utility service. (NV Energy was formed in 1998 through the merger of Northern Nevada's Sierra Pacific Power and Las Vegas' Nevada Power.) The utility determined that rule applied to all customers, and pursuant to that rule, issued six months of refunds to customers who overpaid between April 2024 and October 2024. The company alerted those customers in December with refund letters.

But the use of that rule was wrong, according to the investigation. 

The utility later released a public statement saying it “promptly refunded the overcharged customers in accordance with the applicable rules and is not seeking repayment by those customers who were undercharged.” 

The amount that it undercharged customers was only a fraction (12.4 percent) of the amount it overcharged customers during those six months.

However, a different rule from 2016 should have guided the refunds, according to the investigation, which should have led to full customer refunds for all affected customers.

In addition, the utility disconnected the service for nearly 3,200 of those overbilled customers due to nonpayment, according to the investigation. The investigation did not determine if overbilling by the utility was a substantial cause of nonpayment, but given the number of customers whose accounts were disconnected, the report stated “it is reasonable to infer that overbilling contributed to, if not caused, nonpayment and related service disconnections in some instances.”

“No one should face disconnection or financial hardship because of a utility’s negligence or failure to follow the rules,” Olivia Tanager, director of the Sierra Club’s Toiyabe Chapter, said in an email. “This isn’t just about dollars and cents, this is about dignity, safety, and accountability.”

It’s unclear how many of those overbilled customers between 2001 and 2017 had their service disconnected due to nonpayment. The utility’s claim  it lacked billing data from that period also means it can’t identify the financial harm for those 16 years.

The utility is currently reviewing its non-residential classifications, according to state energy regulators. The utility stated it is adding “additional controls” to prevent similar misclassifications, according to the report.

State lawmakers are also considering AB452, a bill that would, in part, address instances when customers are overcharged by the utility by requiring the utility to fully refund customers, with interest.  

Updated at 9:01 p.m. on 5/14/25 to clarify language about the PUCN's report.