News Releases

PUCN Grants Sierra Pacific Recovery of Natural Gas Costs

Nov 4, 2001

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

For Immediate Release

The Public Utilities Commission of Nevada (PUCN) today granted Sierra Pacific Power Company's request to adjust its natural gas prices and increase rates to its natural gas customers by $12.24 per month. The increase reflects the costs the company paid to purchase natural gas for its customers. It will become effective immediately.

"We're pleased that after this review and audit, the commission recognized that our purchases of natural gas for our customers were prudent and appropriate in a very volatile energy market," said Sierra Pacific Power President Jeff Ceccarelli of today's decision.

The company requested the increase in June to counter unprecedented hikes in the costs it paid last winter and fall to supply its customers with natural gas and reset prices going forward. Nevada regulations require utilities to purchase the gas on behalf of their customers, keep track of the expenses and then seek reimbursement over a 12-month period based on actual costs. The increase covers the increased costs of natural gas from August 2000 to April 2001. The increase also adjusts the price of natural gas going forward.

He explained that this is a dollar-for-dollar pass through of costs and the company is seeking reimbursement for money already spent. There is no profit for the company in this increase to customers.

Ceccarelli said that even with this increase, Sierra Pacific's natural gas prices are still the lowest in northern Nevada. Based on a usage of 60 therms per month, the average residential customerÂ's bill will increase from $49.90 to $62.14.

The company's original request to adjust its rates was based on Nevada regulations, which allows utilities to recover fuel costs over a 12-month period. In September, Sierra Pacific offered to reduce the request by one-third by spreading the increase over a 24-month period. The increase granted by the PUCN spreads the price change over 36 months.

"We recognize that these are tough times for everyone, and by spreading out the increase a little longer it will give our customers a break," Ceccarelli 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.

Ceccarelli said that natural gas prices have declined during the summer months, but were edging back up as the winter heating season approached."We hope that natural gas prices will never again reach the historic highs they did last winter," he said.

# # #