News Releases

Sierra Pacific Lowers its Natural Gas Request by One-Third

Sep 25, 2001

Sierra Pacific Power Company
Contact: Faye I. Andersen
Phone: (775) 834-4822

For Immediate Release

Sierra Pacific Power Company has filed a motion with the Public Utilities Commission of Nevada (PUCN) seeking to reduce its request to increase natural gas prices for its customers by one-third.

The impetus for the company's request was twofold, according to Sierra Pacific Power Company President Jeff Ceccarelli."We recognize that the instability in the nation's economy, due to recent terrorist attacks, is taking its own toll on Nevadans and their ability to cope with rising prices for commodities like natural gas this winter," he said.

Ceccarelli went on to say that the company was listening to customers at the recent PUCN Consumer Session and company open house."It was clear that our customers wanted us to spread out our recovery of the expenses we had already paid on behalf of our customers to purchase natural gas," he said.

He recounted discussions at a recent hearing before the PUCN that the commission expressed an interest in the company working on a way to reduce the increase to customers."Our request to the PUCN would make this happen," Ceccarelli said.

In its motion to the PUCN, Sierra Pacific is seeking commission approval to lower its requested increase from the previously filed 55 percent, to 37 percent and double the period in which the rates are recovered to 24 months. The request would lower the increase for a typical residential customer who uses 60 therms of natural gas to $18.43 from $27.43.

"While we need to recover costs we have already paid to provide natural gas to our customers, we recognize this is a difficult time for everyone," Ceccarelli said. This way, customers get a break."

He explained that there is no profit for the company in this request . This is a dollar-for-dollar pass through of the cost of gas and the company is seeking reimbursement for money already spent.

On June 29, the company filed to recover fuel costs that would adjust the price of natural gas to reflect the higher costs the company paid to purchase natural gas on behalf of its customers. Nevada regulations handle these gas prices through a Purchased Gas Adjustment, which requires utilities to purchase the gas on behalf of customers, keep track of the expenses, then seek reimbursement based on actual costs.

According to Ceccarelli, the company's original request was a direct result of what happened regionally to the price of natural gas over the past fall and winter. The request covers increased costs of gas supplies from August 2000 through April 2001.

He said natural gas prices, fueled by an energy crisis in the West, reached historic levels last fall and winter. Increases in natural gas prices nationwide were a result of growing demand, coupled with tight domestic supplies and volatile prices for other energy resources. Lower prices are passed through to customers using the same process.

If granted by the PUCN, customers rates would change October 15.

"If there is a silver lining in all this, it's that natural gas prices have fallen recently and we're encouraged that these prices may stay down in the near future," Ceccarelli said.