Nevada regulators decided to examine NV Energy Inc.'s request to recover present and future costs associated with wildfire mitigation with a monthly surcharge on all customers' bills.
For now, the charge would be covered by what's known as a "regulatory asset." A regulatory asset allows a utility to record but defer specific costs for later recovery. In this case, NV Energy is seeking to record wildfire mitigation costs it is now accumulating for recovery from ratepayers in a monthly surcharge starting at a later date.
The Public Utilities Commission of Nevada on Aug. 28 accepted its office of general counsel's recommendation to consider the Berkshire Hathaway Energy subsidiary's July 17 petition to record the costs of wildfire mitigation measures such as vegetation management, weather stations, fire cameras and de-energizing circuits.
Those expenditures would be made in accordance with a comprehensive natural disaster mitigation plan required by a new law. NV Energy said the law, signed by Gov. Steve Sisolak on May 22, requires the costs of the plan to be recovered as a monthly surcharge. The utility must designate the amount charged each customer as a separate line item on the bill.
NV Energy utility subsidiaries Nevada Power Co. and Sierra Pacific Power Co., are already spending money to implement the law, so they need to record those expenses for future recovery in rates, the company said.
Although the commission has begun its regulatory rulemaking for S.B. 329, NV Energy said in its petition that the utilities are not waiting for the rulemaking to be completed before implementing the law's requirements. The petition is consistent with a prior PUC order to designate the costs of dealing with unusual events rather than waiting to address such matters in a general rate case, NV Energy said. The amounts covered will be presented to the PUC for review during a general rate case prior to inclusion in rates, the company said.
Utilities seek written orders that allow such accounting if they believe it is probable they will recover those costs.
The state attorney general's Bureau of Consumer Protection opposed the petition, saying that the proposed charge is a form of single-issue ratemaking and the PUC should investigate the matter further before approving the request. While state law provides for recovery of utility costs that are reasonable and prudently incurred, how that cost recovery should occur is an open question, the bureau said.
The commissioners unanimously accepted the PUC counsel's recommendations without discussion. No information was available on the amount of the charge each utility would assess, or on the costs the utilities have incurred.
