News Summary
The Attorney General’s Bureau of Consumer Protection has declared NV Energy’s newly approved mandatory demand charge unlawful, seeking its reversal from the Public Utilities Commission of Nevada. The charge, based on peak energy usage, is said to violate state law and could lead to increased bills for both solar and non-solar customers. The PUCN is set to review the petition soon amid customer backlash regarding potential rate shock and its impacts on electric vehicle owners and solar panel adoption.
Las Vegas – The Attorney General’s Bureau of Consumer Protection (BCP) has declared that NV Energy’s recently approved mandatory demand charge is “unlawful” and is seeking its reversal from the Public Utilities Commission of Nevada (PUCN). The BCP filed a petition for reconsideration on October 7, arguing that the demand charge violates Nevada law (NRS 704.085) which forbids mandatory time-of-use rates for all customers.
The BCP maintains that the demand charge, which will apply to both solar and non-solar customers, is imposed unlawfully. This charge is based on a customer’s highest 15-minute energy usage, rather than the total energy consumed over a billing cycle. The BCP’s petition describes the new charge as potentially harmful and confusing for ratepayers.
The PUCN is expected to review and present a decision on the BCP’s petition during its regularly scheduled meeting on November 18. Meanwhile, NV Energy has asserted that the new proposal complies with state law and has expressed its commitment to work with the commission throughout the reconsideration process.
Details on Demand Charge Implementation
Under the demand charge plan, which takes effect on April 16, 2024, residential and small business customers will see their bills adjusted to include a charge based on their peak energy usage alongside the standard per kilowatt-hour rate. Solar customers will not be able to use net metering credits to reduce the impact of the demand charge, likely resulting in an estimated monthly increase of $20 on their energy bills.
The approval of the demand charge is part of a broader general rate review that is set to increase NV Energy’s revenue by over $118 million. Although this charge was approved for Southern Nevada customers on September 16, 2023, demand charges had previously only been applied to larger customers, such as casinos.
Customer Reactions
Customer responses to the newly implemented demand charge have largely been negative, with many voicing concerns about “rate shock.” The reaction has been particularly intense among electric vehicle (EV) owners, who fear that the increased costs associated with charging would significantly impact their annual expenses. One local EV owner has estimated an increase of $700 per year due to the new demand charge affecting his vehicle charging costs.
The BCP’s petition also highlights that other states, which have unique circumstances, do not enforce similar mandatory demand charges, raising questions about the rationale for Nevada’s adoption of such a charge.
NV Energy’s Position
Despite the backlash, NV Energy maintains that the demand charge proposal is revenue-neutral and claims that it will not increase the overall income for the utility; rather, it changes the billing methodology. Solar users, who make up approximately 10% of NV Energy’s customer base, will be impacted most severely under the new demand charge structure.
Concerns from the public include that this charge may deter the installation of solar panels and reduce the adoption of electric vehicles, ultimately increasing overall demand on NV Energy during peak periods. The PUCN previously indicated that the demand charge was designed to provide customers with ways to manage and lower their bills by encouraging a balanced energy usage throughout the day.
This ongoing debate about the demand charge indicates rising tensions and differing views between regulators, energy providers, and consumers concerning energy costs and usage regulation in Nevada.
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Additional Resources
- Las Vegas Review-Journal
- KTNV Las Vegas
- Nevada Current
- Fox 5 Vegas
- News 3 LV
- Google Search: NV Energy demand charge
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