Wednesday, Sept. 9, 2015 | 2 a.m.
NV Energy will rebate $110.8 million to customers on their power bills in October, according to the company’s Public Utility Commission filings.
Residential customers could see $2 to $3 knocked off their bills, while large customers like hotels and casinos could receive credits of up to $113,000.
The rebate is the result of NV Energy paying less than projected for fuel.
The utility estimates its costs for natural gas, coal and other fuels quarterly and regularly adjusts bills with credits or debits to account for fluctuating market prices. Like cheaper gasoline prices at the pump, the credit reflects lower fossil-fuel prices.
The Attorney General’s Bureau of Consumer Protection, which acts as a consumer watchdog for ratepayers, said another credit is likely by the end of the year.
At the same time, however, NV Energy has earned some $84 million more since 2012 than the limit set by regulators.
Unlike fuel costs, which are set quarterly, the PUC approves rates for operations, maintenance, capital costs, employee pay and other expenditures every three years. That rate sets a limit on how much the utility can earn.
According to testimony given as part of MGM Resorts International’s effort to cut ties with NV Energy, the utility exceeded its allowable rate of return by at least $84 million in the last three years.
The over-earning, however, is legal.
It happens when the utility cuts costs or makes other financial adjustments that saves money, which does not have to be reimbursed to consumers.
But it’s a practice that has become of increasing concern to large-scale customers like MGM.
In his testimony last week, Mark Garrett, a consultant for MGM, blasted NV Energy, saying, “a regulated monopoly...should not be permitted to consistently over-earn at the expense of its captive customers.”
NV Energy did not respond to request for comment.