PUC changes rules for setting basic electric rate
January 30, 2014
The Public Utilities Commission voted 2-1 Thursday to change how it sets the Basic Service Charge for electric power.
On a motion by commissioner Rebecca Wagner, commission members agreed to set the rate at the amount it actually costs NV Energy to provide basic electrical service. That will reduce the $17.50 rate set by PUC in December to about $15,25 — a partial victory for residential consumers.
The decision followed a request by the Bureau of Consumer Protection to reconsider the December decision nearly doubling the basic charge paid by all electric customers.
Bruce Kittess, one of four people who testified Wednesday urging commissioners to reconsider the decision raising the rate from $9.50 $17.50, said consumers were led to believe agreeing to install smart meters at their homes would lead to a lower basic service charge, because the utility would not longer need nearly as many meter readers.
“But what they’ve done is include a lot of things in the Basic Service Charge that were never included for all these years.”
"It was supposed to go down, not up," he said.
Traditionally, the Basic Service Charge was set to pay for the cost of reading residential meters and the bookkeeping costs of that process. NV Energy, he said, changed that last year.
"But what they've done is include a lot of things in the Basic Service Charge that were never included for all these years," said Kittess.
Fred Voltz of Carson City made similar comments arguing that all residential consumers "should not be penalized with an enormous spike in the BSC."
He said the increase isn't fair because "unlike private businesses, monopoly utility companies and government entities, the consumer ratepayer cannot pass along increased costs." He said that means consumers subsidize all other classes of ratepayer.
Mary Fischer, who runs Cottonwood Mobile Home Park, said most of her 90 families are low-income and that the increase "is going to be a massive burden on them."
Commissioner David Noble rejected the petition for reconsideration, saying the charge should remain $17.50.
But Wagner said that amount doesn't jibe with staff's estimate that it costs about $15.28 a month to provide the basic service. Instead of setting a basic rate, she said, it should match what it actually costs the utility.
"It should capture the cost of the Basic Service Charge and Facilities Charge rather than set an exact number," she said.
Noble said he liked that concept for future rate cases, but not this time.
Wagner, however, was joined by commission Chairwoman Alaina Burtenshaw in directing staff to set the rate according to NV Energy's cost to provide basic service.
The BSC is the amount NV Energy receives from every residential customer before the charges for the actual amount of electric power used is added on.
As part of the December rate ruling, the PUC actually lowered the kilowatt-hour charge by about 3 percent, which partially offset the BSC increase. Overall, that meant the average consumer's monthly bill would increase just under $3.
Wednesday's decision reduces that by $2.25 to just about 60 cents more each month.