The Public Utilities Commission of Nevada is in charge of balancing the rates customers pay with the profits of the companies that hold monopolies over Nevada’s energy and natural gas (methane) supplies. It seems though, that recent decisions have favored the utilities over ratepayers. It is concerning that Nevadans are footing the bill for high profits and extra expenses from Nevada’s two energy monopolies.
Nevada’s heavy dependency on methane is certainly a major factor in energy costs as Nevada must import gas from out of state and can’t control the costs. These costs are passed straight through to us, the ratepayers; they don’t impact the bottom line of either monopoly.
Rather than continuing the effort to reduce Nevadan’s dependency on methane, Gov. Joe Lombardo named Karen Haller, president and chief executive officer of Southwest Gas Inc., to lead his energy transition team and directed a change to the state’s energy policy, moving from a planned transition away from fossil fuels to one promoting the use of methane
He recently appointed another Southwest Gas employee, Dwayne McClinton, to serve as the director of the Governor’s Office of Energy. This raises the concern that Southwest Gas may have more influence on decision-making on energy sources and costs than is good for Nevadans.
Nevadans are paying 2-4 times more for gas than ever before; our electricity bills are way up. Yes it’s true, natural gas (methane) prices have been high. But if that’s the only reason for the increase in our costs, how does Southwest Gas justify its current more than 9 percent shareholder profit?
It seems unfair that while Nevadans make less than 1 percent interest profit on their savings accounts, Southwest Gas shareholders are making a 9.25 percent. Now Southwest Gas has requested to increase this profit margin again, despite the fact that its previous three requests were approved.
The current ask is for the Public Utilities Commission to approve a profit increase to 9.9 percent. At a time when ratepayers say they are struggling to pay their bills, the commission needs to deny another profit rate increase.
As an example of decision-making favoring the monopolies, the Public Utilities Commission recently approved NV Energy’s request to bill ratepayers for the full cost of bonuses that it paid to its employees. It turns out it matters who is appointed to the commission. The decision to put the full financial burden of the bonuses on ratepayers was made by Randy Brown, Gov. Lombardo’s appointee to the Public Utilities Commission.
In another example of cost shifting onto consumers, the commission recently voted to allow NV Energy to earn a profit over and above the costs for operations, maintenance, administrative and general costs. Allowing profit to be made from operations and general expenses will cost ratepayers $9.5 million over three years, according to testimony provided to the PUC. The commission’s two Northern Nevada members, both appointed by Lombardo, cast the deciding votes in favor of the subsidy, despite a letter from commission staff noting that its “general preference when designing rates is to follow the principle that costs should be borne by the cost causer.”
It’s especially frustrating that the Public Utilities Commission approved NV Energy’s expedited request to build a methane gas peaker plant. Because it was expedited, opponents did not have time to prepare testimony against the peaker plant. Peaker plants serve as back up energy during high demand periods. They generally run a few hundred hours a year.
The Silverhawk Generating Station will cost at least $333 million to build and another $20 million is transmission cost. Whether it’s used or not, Nevada’s ratepayers will be footing the bill for many years to come.
Before making any further decisions to increase the financial burden borne by Nevada’s ratepayers, the Public Utilities Commission should require Nevada’s monopolies to carefully assess alternative, lower carbon, cheaper solutions in order to reduce our energy bills and help lower Nevada’s carbon footprint. Moving to renewable energy is good for economic growth, energy independence and the health and well-being for all of us. It’s time for the PUC to put Nevada’s ratepayers first.
Sandra Koch is a retired medical doctor.
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