NV Energy proposes monthly service charge jump of $28 in Northern Nevada

The basic service charge of $16.50 paid monthly by NV Energy customers in Northern Nevada could increase to $44.40 if the utility has its way. 

The utility says the move is a means of reducing a $7.8 million subsidy paid by ratepayers who buy electricity from the utility, to the benefit of solar rooftop customers, who generate their own electricity for the most part, but remain on the power company’s grid.   

Sierra Pacific Power Company, NV Energy’s northern subsidiary, filed a general rate case last week seeking to increase revenue by $95 million for capital, as well as operating and management costs.  

Kevin McGehee, lobbyist for the Nevada Solar PAC, agrees customers who buy electricity from the utility are subsidizing those with rooftop solar and says increasing the monthly service fee is a reasonable means of addressing the disparity. 

“Any increase in rates makes solar more attractive,” McGehee said in an interview.  

Customers with rooftop solar currently pay NV Energy $16.50 in Northern Nevada and $18.50 in Southern Nevada to distribute energy. Customers who buy their energy from the utility pay the same, in addition to the electricity they use. 

The average bills incurred by net metering customers was $48 in 2022, $54 in 2023, and is forecasted to be $51 in 2024, including the proposed service fee increase and decrease in rates. 

‘The movement to cost-based levels limits intra-class customer subsidies,” NV Energy argues in the rate hike request. “This is specifically impactful given the required calculation of combining fully bundled residential customers and NEM (net metering) customers in rate design.”  

“The higher prices in 2023 resulted in a challenging year for our customers, as they experienced the highest bills in the last decade,” NV Energy said in testimony on the proposed rate hike, adding it projects bills will decline during the next two years. 

Bills in Southern Nevada are expected to decrease, as well, given the decline in natural gas prices. 

NV Energy suggests that by the end of 2024, its base tariff energy rate and deferred energy adjustment will be down 19% from the end of 2023. 

“This decrease is greater than the proposed 9% overall effective rate increase,” which includes the higher monthly service charge,” resulting in an overall 10% decrease, according to the utility.   

NV Energy says the average bill for Northern Nevada ratepayers is forecasted to be $111 this year, including the proposed increase, down from $118 last year.

The increase in the monthly service charge could be especially burdensome to low-income residents who use less energy but will be on the hook for the higher service charge. 

NV Energy says the additional revenue is needed to cover the “increased cost of debt and requested return on investment,” as well as “higher day-to-day costs” including a return to pre-pandemic staffing levels, increased insurance expenses and “overall inflationary pressures on the supply chain.” 

In January, NV Energy increased the monthly service charge in Southern Nevada from $12.50 to $18.50, as part of its general rate case, which the utility was previously required to submit every three years. A bill passed by the Nevada Legislature last year allows utilities to submit general rate cases more frequently.