Sierra Pacific Power submitted a request Friday to increase power rates nearly 10 percent in a bid to recover debt incurred through contracted power purchases last summer.
The company said it wants to recoup $205 million from Northern Nevada and some Lake Tahoe customers over six years -- three years longer than the current statutory maximum -- resulting in a net increase of 9.9 percent on the "fuel and purchased power" portion of customers' bills.
Nevada's Public Utilities Commission will take up the issue at a meeting April 8.
"We are trying to be sensitive to the fact that increases are difficult for customers right now," said Sierra Pacific Power President Jeff Ceccarelli, explaining the requested six-year amortization schedule. "But as we sit here today, the next time we talk about rates it would likely be a decrease."
The request comes two months after a requested $28 million, 4 percent hike in the "general rate" portion of customer's bills, a three-year increase. If approved, both rate adjustments would go into effect June 1.
Nevada's Consumer Advocate Tim Hay said the amount Sierra Pacific Power is seeking is inflated from earlier predictions of $177 million. That amount, calculated over a three-year period, would have raised electricity rates by as much as 20 percent.
"That is a lot more than we had anticipated," Hay said. "They say (the $205 million amount) is a dollar-for-dollar pass-through for the cost, but they are asking for a 9.4 percent carrying cost. That's more than the cost of their financing. The difference is pure profit."
Ceccarelli said the additional $28 million accounts for two months of debt incurred since estimates were made. Outstanding energy expenditures the company made for March through November cost Sierra Pacific $205 million.
The attorney general's Bureau of Consumer Advocacy, the department Hay heads, is concerned about the prospect of stretching repayment of debt to six years because of the additional financing costs. Nevada Power, Sierra Pacific's sister company, recently asked the commission for the same leeway on a request to raise $912 million in fuel and purchased power costs from Southern Nevada customers.
"Right now we have been focusing almost all of our resources on Nevada Power (Sierra Pacific Power's sister company), but we anticipate recommending something substantially lower" in Northern Nevada, Hay said Thursday. "We look at how it was acquired, at what price it was acquired and whether the company acquired more than it needed" in recommending board approval or disapproval.
Last week, a public meeting in Las Vegas was so crowded with disgruntled consumers -- 400 showed for a 275-seat auditorium -- that the company scheduled an additional meeting.
Nevada Power's proposed plan would raise power rates by as much as 16 percent in Southern Nevada. Power consumers, along with Hay, questioned the company's business practices at the meeting.
Rate increases have spurred some backlash in Northern Nevada, where a petition recommending a"No" vote to the commission has circulated. Carson City-resident Reba Montrose is circulating the petition, which already has 1,500 signatures, according to Wanda Wright, a Reno business owner who started it in her neighborhood. For more information about the petition, call Montrose at 841-4285,
