Nevada utilities should make it through the summer

Some customers of Sierra Nevada Power Co. will see a decrease in their power bills starting June 1, thanks to the Public Utilities Commission's decision earlier this week.

Homeowners should see a 3 percent decrease, or about $2.32 for someone useing 715 kilowatt hours a month.

Apartment dwellers would see and decrease of about $1.98 a month.

Small business owners will see a 1.6 percent increase in rates starting June 1. The $139.3 million rate increase approved by the Commission on Tuesday will come from commercial and industrial customers, who will see increases of between 1-11 percent.

Sierra Pacific had sought a $221.3 million increase, but that was reduced by utility commissioners.

The Northern Nevada company will be in better shape than its southern subsidiary, Nevada Power, Public Utilities Commission Chairman Don Soderberg told lawmakers Friday.

Nevada Power may have cash problems by the end of July but should make it through the summer.

Soderberg made the comments in response to questions by members of the Legislative Commission. He said Nevada Power's financial projections "had them very close to the line by the end of June and had some deeper problems at the end of July."

He said the problem is cash flow.

"The rate the utility is currently charging customers is actually considered a generous rate," he said. "But its ability to get short-term loans has been impaired."

He said Nevada Power's demand peaks in the summer because of power use in the desert heat of Las Vegas. That forces the company to buy peak power, which it then pays for with monthly customer revenues.

The trouble is the customer money arrives about a week after the utility must pay for its power, forcing the utility to take short-term loans to cover the gap.

Soderberg said the utilities commission is looking into ways of helping the utility through the summer peak-use period because, by August and September, projections show the company will have enough cash to handle its power costs.

"That's when those generous rates start to come into their coffers," he said.

He said commission and utility officials are back in Washington, D.C., trying to get some relief from high-cost power contracts the utilities are committed to.

"I can't tell you everything is rosy but it's looking better and better," he said.

He said, however, Sierra Pacific's peak demand is in the winter, not the summer and that its cash flow is sufficient to cover the bills.

"We don't see anything over the next couple of months that would indicate there is a problem with the cash flow of Sierra Pacific," Soderberg said.