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NV Energy files new tariffs to help large customers during pandemic

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NV Energy files new tariffs to help large customers during pandemic

Saying it wants to help Nevada's employers cope with the economic downturn resulting from the COVID-19 pandemic, NV Energy Inc. filed applications to lower the price large customers pay for energy. Specifically, the company is seeking to base the new price on the production costs of new renewable energy resources being built in the state.

The so-called Customer Price Stability Tariff would be extended to customers that consume 8,760 MWh or more electricity per year or are health and educational government entities using facilities under a common budget and controlling 1 MW or more of load in the relevant utility's service territory.

NV Energy subsidiaries Nevada Power Co. and Sierra Pacific Power Co. filed very similar applications on May 4 with the Public Utilities Commission of Nevada.

The companies announced the tariff request as part of a four-part plan to reduce energy costs for customers and help Nevada with economic recovery during and following the pandemic. NV Energy said the tariff is designed to assist critical service providers such as cities, counties, school districts and colleges, as well as some of the state's largest employers. Cheaper rates will help these entities put people back to work and can provide critical services to communities, the Berkshire Hathaway Energy subsidiary said.

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"The [Customer Price Stability Tariff] utilizes new solar energy and battery storage resources being built in Nevada, which will create jobs and drive economic development, to offer reduced energy prices and provide price stability for many of the state's largest employers and government entities," NV Energy said in a press release.

The utilities are asking that the tariff be put in place for five years. The Public Utilities Commission of Nevada would have to approve each individual customer agreement and extend the rate beyond five years on a customer-by-customer basis, according to the applications.

The so-called "energy resource rate" would be based on solar production costs of most recently approved fixed-price power purchase agreements with NV Energy and would result in much-needed rate stability for many of Nevada's largest employers and various government entities, the applications said.

In addition, customers would pay a "program participation rate" to offset system costs all customers should pay, such as for wholesale market capacity purchases and excess rooftop solar costs, the applications said.

Large customer retention also is a motive

In a white paper attached to the applications, NV Energy said some of its largest customers sought alternative energy suppliers but many chose to remain with the utility. However, NV Energy said those that stayed did so with the understanding that the company would propose a program to help them acquire renewable energy with stable and lower rates. COVID-19 has only increased those customers' desire to achieve savings, NV Energy said.

"Since March of this year, the coronavirus (COVID-19) pandemic has caused unprecedented disruption to the Nevada economy, which relies heavily on tourism and hospitality," NV Energy said in the white paper.

The utility said the departure of some of its largest customers has an impact on remaining customers, especially the residential rate class.

"Providing price stability and retention of these commercial and governmental customers is essential for the achievement of the state's energy objectives and recovery from the COVID19 economic crisis," the white paper concluded.

The other three parts of the COVID-19 response plan for economic recovery include waiving disconnects and late payment penalties and providing extended payment options; donating more than $1 million to non-profits for food, housing, health and energy assistance; and rate cuts.

For rate cuts, NV Energy said it will file in June for a $120 million reduction for its southern Nevada customers, the largest reduction the company said it has ever requested. If approved, the reduction, which will take effect on Jan. 1, 2021, would follow a $105.7 million decrease NV Energy implemented statewide April 1. NV Energy also has applied for a rate decrease of $30.6 million that would be implemented on Oct. 1, the company said.