Southern Nevada electricity rates to climb estimated 10% for residents, roughly half what NV Energy sought; Public Utilities Commission cites 3% drop in fuel prices as reason for lower increase

Tracy McDonald

LAS VEGAS , December 23, 2011 (Associated Press) – Residents in southern Nevada will pay higher rates for electricity beginning Jan. 1 under an order issued by the state Public Utilities Commission authorizing NV Energy to raise its rates.

The increase on an average single family home in Las Vegas will be an estimated 10 percent, roughly half of what the utility had sought, The Las Vegas Sun reported.

The rate increase for commercial customers will be 7 percent or less because commercial customers have been subsidizing residential customers. The goal of the company and the commission is to eliminate those subsidies.

The commission's ruling Wednesday said the utility's fuel costs have declined about 3 percent, and those savings will be passed on to customers, lowering the overall increase.

The increase doesn't affect electric or natural gas customers in Reno-Sparks and other areas of northern Nevada, NV Energy spokesman Karl Walquist said Thursday. The utility serves most of the state, but he said northern and southern Nevada follow different rate schedules.

Commissioners also decided ratepayers won't pick up 4 percent of the utility's costs for employee salaries. That could translate to a 4 percent reduction in employee pay, but a PUC spokesman said the utility's board of directors can decide what to do, the newspaper reported.

The commission also set the company's rate of return at 10 percent, down from the 10.25 percent. The company asked for an 11.25 percent rate of return.

While approving increased rates, the commission had harsh words about the utility's service to customers.

In the decision written by Commissioner Rebecca Wagner, the commission said the average wait for NV Energy to answer customers' telephone calls has declined from 2 minutes, 33 seconds, in 2008 to 4 minutes, 40 seconds, in 2010.

NV Energy held 20 positions open in its call center, about 15 percent of the staff. The company had planned to transfer some meter readers into call center positions but that has not happened.

The utility said its meter reader numbers will be reduced by 95 with the installation of digital meters.

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