Nevada Power files new rate hike request

Within hours of the Public Utilities Commission's decision to dismiss a $42 million rate increase on Wednesday, the Nevada Power Co. filed a $49 million request to recover fuel costs the company already has incurred.

The company asked the commission to hike the rates effective Sept. 1 and the average residential customer's bill would rise about $2.54 a month, about 3.5 percent, if the increase is approved.

Nevada utilities can seek fuel cost recovery increases annually or, if the increase in the cost of fuel for generation and purchased power is greater than 5 percent, semiannually. Wednesday was the first possible day Nevada Power could request an increase since it filed a similar request on July 15, 1997.

The request turned down by the PUC at a meeting Wednesday morning was rejected in part because it did not meet the state's requirements to be considered a semiannual filing.

Nevada Power officials say the new application meets the PUC's annual filing requirement to reconcile outstanding balances in a deferred energy account not included in customer billings for the 12 months from June 1997 through May.

Of the $49 million sought in the increase, $36 million would affect commercial customers and the rest by residential customers, whose rates would rise from 6.6 cents to 6.8 cents per kilowatt hour. The national average is about 9 cents per kilowatt hour.

The PUC's action on Wednesday was to approve a dismissal of the rate increase filed in May by state Consumer Advocate Fred Schmidt of the Attorney General's Bureau of Consumer Protection.

Schmidt argued Nevada Power's application was not in the public interest and did not qualify for consideration as a semiannual rate request. A deferred energy application granted by the commission in January for an increase of $45 million was not considered in the failed Nevada Power request, the PUC determined, which resulted in the 5 percent test not being met.

Nevada Power also has filed a request to merge with Reno-based Sierra Pacific Resources, Northern Nevada's primary electrical utility. That request is expected to be considered by January. At the same time, the PUC is working to turn Nevada's electrical utilities into a competitive market from a monopolistic system.

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