Court asked to halt PUC rate hike
CARSON CITY _ Nevada’s consumer advocate for utility customers petitioned a judge Tuesday to block a 17.7 percent, $311 million rate hike granted to major electrical utilities by state regulators.
Tim Hay asked Carson District Court Judge Mike Griffin for a temporary restraining order to block the state Public Utilities Commission ruling from taking effect.
Hay said the PUC granted the rate hike for Sierra Pacific Power Co. and Nevada Power Co. last Friday before any hearing had been held, and given the magnitude _ the state’s highest-ever rate increase _ a hearing was a must.
The rate increase is supposed to take effect Thursday. It’s unlikely that Griffin could schedule a hearing by that time, although it’s possible a hearing could be held by Friday or early next week.
Hay also filed a request with the PUC on Monday to set aside its decision until opponents can analyze the rate hike request.
The consumer advocate said the PUC decision violated a Nevada law limiting utilities from seeking an increase in rates more than once every 30 days. The PUC adopted two smaller rate increases just two days before granting the 17.7 percent increase.
Since last summer the utilities have been raising rates monthly and those increases could total about 60 percent by March 2003 when the monthly rate adjustment program ends.
Hay also said the PUC staffers based their decision on a press release from Sierra Pacific Resources, the parent of the two electrical utilities, and not on information contained in the company’s application for the increase.
“The commission has fallen for the rhetoric and unsupported claims made by the company and as a result has overreacted by allowing a rate increase that is unlawful,” he said.
Other critics included Sen. Randolph Townsend, R-Reno, the chairman of the state Senate panel working on deregulation measures. Townsend said the PUC vote for the rate hike was “outrageous and bizarre.”
Townsend, who chairs the Senate Commerce and Labor Committee, said he’s troubled that the PUC made its decision without hearing any opposing arguments. He also thinks it’s poorly timed.
But PUC Chairman Don Soderberg defended the rate hike approval, saying the commission faced a tough decision and could have taken the easy route of denying or delaying the rate hike.
Soderberg also said the PUC vote doesn’t mean the increase is set in stone. He said utility executives “carry the burden of justifying their numbers, and that burden has not been relieved by anything we have done.”
Soderberg said that if later data show the increase isn’t warranted, ratepayers could get refunds.
Under the rate hike, residential and small commercial customers will see increases averaging just over 13 percent. Hotel-casinos will see increases of about 20 percent, mines will get rate hikes averaging about 25 percent, and agricultural irrigators will get increases ranging from 15 percent to nearly 30 percent.
A residential customer who gets by on just 650 kilowatt hours of electricity a month will see a 10.4 percent increase _ up just over $6 to about $68.
The rate hike followed Sierra Pacific Resources’ recent report showing fourth quarter losses of $18.2 million and year-end losses for 2000 totaling $39.8 million _ a 177 percent drop from 1999.
Utility executives blamed the huge plunge on skyrocketing fuel prices, exacerbated by the California energy crisis.
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