Southern Nevada payback extension denied

Nevada Power Co.'s request to have a deferred energy rate increase staggered over a six-year period -- rather than the statutorily mandated three years -- was denied this week in a legal filing by the Nevada Public Utilities Commission.

The commission found -- by a 2-1 margin -- state law explicitly prohibits rate increases from being amortized over six years. The law, enacted during the last legislative session, plainly states the time line for deferred energy recovery shall not exceed three years.

In its filing with the commission as part of a request to recover $922 million for Southern Nevada electricity customers, Nevada Power, a sister company to Sierra Pacific Power Co. in the north, argued for the extended payback period to minimize bill increases.

Nevada Consumer Advocate Tim Hay, who advises the commission, had argued against the extension, saying the longer time line would cost electricity customers more in interest charges.

The commission has yet to act on the much-debated, nearly $1 billion rate increase request.

In Southern Nevada, public consumer meetings have been overwhelmed with crowds of disgruntled electricity customers, and Hay has called for denial of the request. He says Nevada Power's buying practices during the peak of the western energy crisis last summer were imprudently executed, a charge the utility has publicly denied.

Consumer and commercial groups have also fought against the Nevada Power increase. The commission is expected to decide whether an increase is warranted, and to what extent, by April 1.

Northern Nevadans may also be asked to cough up an extra 10 percent for a rate increase through Sierra Pacific Power. Here, the utility has asked the commission to allow a rate increase to recover $205 million expended last summer when wholesale energy prices spiked.

While the same issues have come up regarding the legitimacy of the company's wholesale buying practices, the company and the Hay have not yet filed evidence for or against the rate increase request. Deliberations in the Sierra Pacific Power case begin April 8, with a decision expected by June 1.

The company is also requesting a $28 million increase for the "general rate" portion of customers' bills.

At a consumer session Monday at the commission's meeting room in Carson City, irate consumers had to be turned away when the room filled to its 160-person capacity. Another meeting is scheduled for March 4 at the Carson Valley Inn at 6 p.m., and the commission is considering additional consumer sessions to meet the demand.

Breakout

IF YOU GO

What: Meeting for customer of Sierra Pacific Power Co. regarding proposed rate increase.

When: 6 p.m. March 4

Where: Carson Valley Inn, Minden