Nevada PUC Challenged on Rate Hikes

Nevada lawmakers quizzed utility regulators Friday about their ability--and willingness--to fully review record rate hike requests that are expected to top $1 billion.

Assembly Speaker Rich Perkins, who chairs the Legislative Commission, told state Public Utilities Commission Chairman Don Soderberg that lawmakers expect a thorough PUC analysis of the requests.

The PUC’s role is to be “pretty much the last watchdog for the ratepayer, the last line of defense for the ratepayer,” said Perkins (D-Henderson), adding that the agency had fallen “woefully short” in meeting that responsibility in the past.

Assembly Majority Floor Leader Barbara Buckley (D-Las Vegas) expressed similar concerns, saying the PUC is mandated to reject any part of a rate hike request that stems from imprudent business decisions.

Soderberg said the PUC has the resources to analyze the rate hike requests and “a very liberal budget” that will allow for hiring experts if needed to complete that analysis.

Soderberg also said the proposals will get full scrutiny, not only from the PUC but from other interested groups and agencies. That would include the state’s consumer advocate for utility customers.

The rate-hike requests, when combined, amount to the biggest proposals ever to affect Nevada electrical users.

The main request, for $921 million in new revenues, was filed by Las Vegas-based Nevada Power Co. If approved, it would mean an average increase of 21% in utility bills for southern Nevada residents.

A sister company, Reno-based Sierra Pacific Power Co., filed a request for $28 million. That represents an overall 4% increase, but Sierra is expected to seek at least a 20% increase of its own in February.

Perkins said legislators expect the PUC to look at “every facet of the rate increase request to ensure that the power company is only allowed to recoup the legitimate, reasonable and prudent cost of providing power.”

Hay said in the Sierra Pacific and Nevada Power cases, lawmakers expected far lower requests when they approved legislation letting the utilities pass costs to customers.