High court looks at Nevada Power overcharge allegations

The Nevada Supreme Court is deciding whether a lawsuit saying Nevada Power Co. overcharged companies millions for electricity must go through the Public Utilities Commission before it hits the courts.

Bonneville Square, which owns a large office building in Las Vegas, and Union Plaza Hotel/Casino filed a class-action lawsuit against Nevada Power accusing the utility of overcharging them and up to 544 other companies for as long as 30 years.

The company allegedly installed meters at those companies "on the wrong side" of the transformer. The effect was that they charged them at a higher rate for power than they should have, said attorney Dan Polsenberg.

"They were billing the higher rate while the meter is registering the higher amount of electricity," Polsenberg told the Nevada Supreme Court. "It's inherently unfair."

But Harold Morse, representing Nevada Power, said that's not the issue before the court. He said the issue is whether the allegations should be dealt with by the state's utilities commission. Morse argued the PUC is the appropriate forum, and that plaintiffs can take it to court if they don't like what the commission does.

But Polsenberg said placing the decision before the PUC could limit the damages those businesses can recover. He said the utilities commission can only provide $100,000 in civil penalties while the total involved in this case could surpass $30 million.

He told the court the PUC sets rates and that's not what this case is about. "We're not looking at the rate," he said. "We're looking at the conduct of Nevada Power."

He said the case is a case of consumer fraud.

Morse and co-counsel Robert Eisenberg argued the PUC has the authority to fix the problem if it rules there is one.

The high court must decide whether to dismiss the case, effectively handing the issue to the PUC, or remand it to district court, allowing the lawsuit to proceed.