Nevada utility regulators unanimously rejected a request from NV Energy to increase basic service charges for its Northern Nevada customers by 175 percent, instead awarding the utility only a fraction of the requested amount on Tuesday.

NV Energy, the state’s largest electric utility, had sought to increase its base service charge — the flat rate customers pay just to have electricity — by $28.80 per month for residential single-family users, while simultaneously reducing how much customers pay for actual energy use.

The request would have raised the base cost for Northern Nevada from $16.50 to $45.30 per month, making it the highest in the United States “by a significant margin,” the state’s Bureau of Consumer Protection said.

NV Energy, which serves nearly 328,000 customers across Northern Nevada, had argued the price change would ensure more stable monthly electricity bills. The utility also said it would simultaneously cut in half the cost customers pay per kilowatt hour for electricity, a move the utility said would result in no net increase in average customer bills, but opponents said it would punish those who conserve energy or go solar use energy.

The proposed rate increase drew substantial public protest, with more than 250 people offering fiery comments at multiple consumer sessions hosted by utility regulators, and groups ranging from the Nevada Conservation League to Solar United Neighbors offering vocal opposition.

The Solar Energies Industry Association described the proposal as “extreme (and) unsupported” and alleged that NV Energy was attempting to circumvent legal protections for net energy metering customers “under the guise of bill stability.”

Instead, Nevada’s three-member Public Utilities Commission approved a $2 per month increase, or 12 percent, for single-family homes in Northern Nevada. The new monthly rate, which goes into effect in October, will bring Northern Nevada customers on par with the base service fees paid by their Southern Nevada counterparts.

“NV Energy teams are already analyzing the various components of the order and what it means for customer bills and rates in northern Nevada,” a spokesperson for the utility said in an email.

Commissioner Randy Brown said NV Energy’s original request was “far too high.”

According to Advanced Energy Uniteda national trade association focused on clean energy, the highest fixed rate in the country for investor-owned utilities is $34.71, in Mississippi. The national average is $11.66 for 170 other investor-owned utilities.

“Today’s decision not only prevents a disastrous rate hike for households, but also shows that the PUCN has listened to consumer concerns,” Emilie Olson, leader of Advanced Energy United in Nevada, said in an email. “By choosing a modest increase instead, PUCN’s vote demonstrates that it is prioritizing affordability for all consumers, protecting Northern Nevada taxpayers from unfair monthly rate increases, and setting a positive precedent that will help avoid similar burdensome increases in basic service costs for consumers in the South. Nevada too.”

In his design orderthe committee declared that the proposed increase was “excessive and not in the public interest”, noting that it would disproportionately impact low-consumption customers and discourage energy savings. The order refuted NV Energy’s arguments about price stability by noting that most of the volatility in customers’ bills came from fuel costs.

NV Energy generates its electricity from a portfolio that includes coal, solar energy, geothermal energy and natural gas. The US Energy Information Administration expects natural gas prices to remain lower in 2024 than in previous years due to higher-than-normal inventories. More than half of the electricity used in Nevada is generated by natural gas plants.

If natural gas prices rise again, opponents of the rate increase reasoned, customers’ bills would do so too. NV Energy countered that raising basic service costs and lowering the amount paid for use would keep prices more stable during times of volatile natural gas prices.

In its original request, NV Energy described the base service fee increase as necessary to cover capital costs in Northern Nevada, including expanding service and addressing a financial shortfall caused by net metering — credits that residential solar producers receive for adding electricity to the grid. To do this, the utility said it needed to recover nearly $106 million annually from ratepayers, the bulk of which, $95 million, came from residential electricity users.

State energy regulators also limited requested rate increases for residential multifamily users and natural gas customers.

NV Energy has requested that the base service fee paid by residential multifamily users be increased from $8 to $18.80 per month; the commission instead allows an increase to $9.25. The utility may also increase the base service charge for its small commercial users and natural gas customers from $14 to $16, less than the $18 NV Energy charges.

The committee also lowered NV Energy’s blanket request by setting the return on equity for shareholders at 9.65 percent, a small increase from the current rate of 9.5 percent but well below the utility’s proposed increase to 10.4 percent.

This story was published on September 18 by The Nevada Independent and is republished with permission.