by Dana Gentry, Nevada Current
An extended economic hangover caused by high electric and natural gas bills for Nevada ratepayers will begin to subside in April, as the exorbitant cost of natural gas in 2022 and early 2023, coupled with higher usage resulting from frigid temperatures that winter, fall off the 12-month rolling average used by NV Energy and Southwest Gas to calculate bills.
The annualized decrease for Southwest Gas customers in Southern Nevada, scheduled to take effect in April, amounts to $105.5 million, or about 10% for a single-family home, and a reduction of $69.8 million or 12.4% for households in Northern Nevada.
However, the decrease in the cost of gas may be partially offset by Southwest Gas’s general rate increase requests at both ends of the state.
In Southern Nevada, Southwest Gas originally sought a general revenue increase of $63.5 million, but it was reduced to $56.1 million by a stipulated agreement. In Northern Nevada, the company’s $10 million general rate hike request was reduced by $1 million via a stipulation. A hearing before the Nevada Public Utilities Commission on the general rate cases has yet to be scheduled.
NV Energy, which provides electrical power to the state, notified the PUC it’s reducing the base tariff and deferred energy rates by $37.5 million in Southern Nevada, amounting to a slight decrease of .79 cents on a $170 monthly bill, beginning in April.
In Northern Nevada, a single-family residential bill is expected to decrease about 3.4% – from $117.25 to $113.28, based on an annualized decrease in revenue of $43 million.
NV Energy’s natural gas division in Northern Nevada will see a decrease in revenue of $26.4 million, resulting in an average reduction of 11% on residential bills.
The adjustments reflect the plummeting cost of natural gas in the last year.
The average annual price of wholesale natural gas for Nevada’s electricity customers remained in the single-digits since 1997, topping out at $8.26 per thousand cubic feet in 2008.
But in December 2022, “due to colder-than-normal temperatures and regional pipeline constraints,” natural gas prices at several hubs in the western U.S. spiked to more than $48 per thousand cubic feet, the U.S. Energy Information Administration reported.
The price of natural gas sold to Nevada ratepayers saw another unusually high spike in January 2023, hitting $36.81 per thousand cubic feet, up from $3.74 in January of 2021 and $7.45 in January 2022.
The high cost of natural gas in the first quarter of 2023 will fall off the 12-month rolling average cost of gas in July, likely resulting in additional decreases for Nevada utility customers.
In Nov. 2023, the last month on record, the price of natural gas sold in Nevada was $5.52 per thousand cubic feet.
NV Energy generates 60% of its electricity for Southern Nevada and 41% of its energy for Northern Nevada from natural gas, a greater share than any other state served by parent company Berkshire Hathaway Energy, which also provides electricity via PacifiCorp to 2 million customers in California, Oregon, Washington, Wyoming, Idaho, and Utah.
Natural gas made up just 21% of Pacificorp’s energy portfolio in 2022. The bulk -– 43% – comes from coal.
On Friday, the PUC will hold a hearing on NV Energy’s fifth amendment to its integrated resource portfolio, the result, according to critics, of the utility’s failure to adequately plan for the amount of energy resources it requires.
While supply chain issues have temporarily inflated costs for renewable projects, industry experts contend NV Energy is still obligated to employ competitive procurement processes for the best and lowest-cost energy options. But compared with other electric utilities in the western U.S., even its sister company PacifiCorp, NV Energy is lagging.
Assemblyman Howard Watts says the utility’s failure to plan appropriately is costing customers more, increasing reliance on fossil fuels, and is contrary to the state’s goal of producing half its energy from renewable sources by 2030.
Watts says the company’s planning failure may be inflating its bottom line.
“Whether by accident or design, the submission of so many amendments with so many changes in proposed resources points to flawed and fractured planning by the utility,” Watts wrote in comments filed last year with the PUC. “The state cannot afford to plan and procure from one crisis to the next without the opportunity to fully evaluate other, potentially more cost-effective and forward-thinking, alternatives.”
Nevada Current is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Nevada Current maintains editorial independence. Contact Editor Hugh Jackson for questions: [email protected]. Follow Nevada Current on Facebook and Twitter.
