Sierra Pacific Power Co. seeking $111 million in electricity rate increases
CARSON CITY – A $111 million rate-increase request that would boost electricity bills of typical Sierra Pacific Power Co. residential customers by nearly 16 percent was filed Monday with the state Public Utilities Commission.
The proposal, which would take effect next July, seeks to recover costs stemming from a new, gas-fired generating plant at Sierra’s Tracy plant that’s scheduled for operation in April. Of the $111 million, $75 million is attributed to that 541-megawatt plant.
The overall increase for Sierra’s business and residential customers in Northern Nevada is just less than 13 percent. For typical residential customers using 750 kilowatt-hours of electricity, monthly bills would increase 15.6 percent from about $98 to $113.
Michael Yakira, chief executive officer of Sierra’s parent Sierra Pacific Resources, said the new power plant will give the Reno-based utility enough generation to meet more than 90 percent of customers’ electricity demand.
Yakira added that the goal is to reduce dependence on outside energy suppliers, which should help stabilize energy prices for customers in the long run.
While the proposal would mean higher rates, Sierra also said previously approved fuel and purchased power costs the company has been recovering from customers will expire in July and reduce electric rates by approximately $40 million.
However, that decrease would be offset by a Sierra Pacific Power bid for $42 million more from its customers to cover some of the costs of an experimental, clean-coal generating plant at the Tracy station east of Reno that wouldn’t run reliably and was mothballed.
Construction on the Pinon Pine clean-coal project began in early 1995. The project, plagued by cost overruns, came online in late 1996 – but as a conventional, gas-fired power plant. The experimental gasified coal system was shut down.
The PUC hasn’t set a hearing date for the $111 million rate increase plan. A Jan. 9-11 hearing is scheduled on the bid for the additional $42 million.