In its final action for 2010, the Nevada Public Utilities Commission (PUC) approved rate changes effective last Saturday for NV Energy's northern utility operations. As a result, retail natural gas utility rates increased at the start of the new year and electric rates decreased. The overall revenue increase to the company is $2.7 million for natural gas and, thanks to other fixed monthly customer charges, $13.1 million for electric.

NV Energy Inc. said the PUC approved an overall decrease in electric rates of approximately 1.8%, or $1.57/month, from $87.97 to $86.40. For the typical residential customer using 54 therms of natural gas/month, state regulators approved an increase of approximately 1.6%, or 88 cents/month, from $56.72 to $57.60.

The end-of-year 2010 rate changes are a result of the company's mandatory gas and electric general rate case filings made every three years. NV Energy's last general rate cases were filed in December 2007 for electricity and October 2005 for natural gas, a utility spokesperson said. "An offsetting decrease was also included in the rate change as part of a mandatory quarterly filing the utility makes to adjust rates to more closely match fuel and energy costs."

Through the end of 2010 NV Energy's northern Nevada customers experienced eight consecutive quarterly decreases in electric rates and six consecutive quarterly decreases in natural gas rates, the utility spokesperson said. That is in addition to two annual decreases for both electric and natural gas customers.

In just two years, NV Energy's electric prices have fallen 19% and natural gas prices have decreased by 20%. Last October, NV Energy's Northern Nevada utility lowered retail electric and natural gas rates as a continuation of a two-year downward trend in the utility's retail rates, reflecting reductions on the wholesale level (see Daily GPI, Oct. 6, 2010).

The 2010 general rate change granted by the PUC allows the company to recover costs associated with investments in new transmission and distribution lines, substation and equipment improvements, labor and a return to the company's shareholders. The PUC established an overall rate of return for the company of 7.86% for electric and 5.15% for natural gas, and returns on equity of 10.1% and 10%, respectively.

In addition to the above rate changes, the PUC in its order also added to an existing surcharge for electric customers in Washoe County to recover incremental costs to place certain electric transmission lines underground, as required by the Washoe County Board of Commissioners. The surcharge will be collected over a three-year period, which for the typical residential customer residing in Washoe County amounts to an increase of approximately $1.63 monthly.

The PUC implemented a similar charge for electric customers in Carson City that will cost the typical residential customer in that county approximately 60 cents/month.

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