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Commission approves statewide fee to pay for NV Energy disaster plan

Updated September 30, 2020 - 6:38 pm

A small fee that drew a big fuss will begin appearing on NV Energy customers’ bills Thursday.

The regulatory body that oversees the power company approved its first natural disaster infrastructure plan Wednesday and a statewide usage fee to pay for it. The three-person Public Utilities Commission voted 2-0 to greenlight the multimillion-dollar Natural Disaster Protection Plan and a $0.000025 per kilowatt-hour fee that applies to both Southern and Northern Nevadans. Las Vegas-based commissioner Tammy Cordova abstained from the vote.

The fee will pay for $8.6 million in plan-related expenses the power company incurred last year.

“Nothing is more important to NV Energy than the safety of our customers, our employees, and the environment,” NV Energy spokeswoman Jennifer Schuricht said. “While there is a cost associated with implementing our Natural Disaster Protection Plan, these actions will reduce the risk of Nevada experiencing the natural disasters we have seen in surrounding states.”

NV Energy had argued in commission filings that all Nevadans benefit from its disaster plan, and therefore, the whole state should pay the same usage fee. The commission agreed in the order it approved Wednesday.

“A natural disaster in Lake Tahoe, or Mt. Charleston, or the Las Vegas Strip impacts Nevada’s economy,” the order said.

A 2019 state law, Senate Bill 329, requires that NV Energy file a plan to protect its infrastructure and prevent power loss from wildfires, earthquakes or other calamities, as happened in California during the 2018 Camp Fire that killed 85 people and devastated the town of Paradise in the Sierra Nevada foothills.

Opponents of the plan, including all six of the state’s largest gaming companies, the Nevada Resort Association and the Nevada attorney general’s Bureau of Consumer Protection, argued in commission filings that the statewide fee was “unlawful” and effectively subsidizes energy users in the much less densely populated northern part of the state.

The Bureau of Consumer Protection noted that improvements last year cost about $489,000 in Southern Nevada and $8.1 million in Northern Nevada. Yet, Southern Nevadans would pay about 69 percent of the total costs under a single fee, amounting to a $5.4 million subsidy from South to North, the bureau argued in a June 16 commission filing.

Typically, Nevada energy users in the South and North pay different power rates: NV Energy is a holding company for Sierra Pacific Power in Northern Nevada and Nevada Power in Southern Nevada, which each operate as separate utility companies.

However, the commission agreed that it was not only fair but “statutorily mandated” by the 2019 law that the whole state pay the same fee.

Legal representatives for the gaming companies and the Nevada Resort Association didn’t provide comment.

Contact Mike Shoro at mshoro@reviewjournal.com or 702-387-5290. Follow @mike_shoro on Twitter.

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