Sierra Pacific Resources
Contact: Media Contact:Faye I. Andersen / Analyst Contact: Rich Atkinson
Phone: 775-834-4822 / 775-834-4358
For Immediate Release
The Public Utilities Commission of Nevada (PUCN) today approved a $9.3 million rebate for Sierra Pacific Power Company's electric and natural gas customers that will become effective on their October bills. This is the third and final installment of a"shared savings agreement" which enables customers to benefit from the operating efficiencies achieved by the company in 1999.
"We're pleased with the PUCN's action today and would like to thank the Bureau of Consumer Protection, PUCN staff and all of the parties that participated in the agreement that led to today's outcome," said Doug Ponn, vice president of Government and Regulatory Affairs for Sierra Pacific.
For the typical residential electric customer, the rebate amounts to $11.26. For the typical natural gas customer, the rebate is $3.72. Electric customers will also receive another 51¢ as part of a refund announced last month, bringing the total rebate for electric customers to $11.77. In addition, electric prices today in northern Nevada remain lower than they were in 1994.
This third and final rebate is part of an agreement first negotiated with the Bureau of Consumer Protection and the PUCN in 1997, as part of a previous"shared savings agreement" that split the proceeds from hard work and operating efficiencies achieved by the company during a three-year period. Under the agreement, any Sierra Pacific earnings for 1997, 1998 and 1999 that exceeded a certain plateau were divided 50/50 between the utility's customers and its shareholders.
The company previously rebated customers close to $20 million in May and August 1999 for savings attained during 1997 and 1998.
In additional actions today, the PUCN approved an agreement between the parties which allows Sierra Pacific Power and Nevada Power companies to withdraw their Petitions to Reconsider that arose from their restructuring cases and directed the companies to unbundle rates. (The unbundling of rates involves breaking out the costs of the different components needed to supplying electricity to a customer, which include generation, transmission and distribution.) Today's action allows the companies to continue to pursue certain issues arising from these cases.
"These agreements settle litigation and disagreements between many diverse parties. Hard decisions had to be made by all and in the end no one came away with everything they wanted," Ponn said."But, during this time of ever-increasing fuel and purchased power costs, customers are better off to have the certainty of knowing how their rates will be set. This is a certainty not found in some other parts of the country."
Two weeks ago, the PUCN set a schedule for opening the market to competition that will begin November 1 for the largest commercial customers. The market will open for medium commercial customers on April 1, 2001, with small commercial customers getting the go-ahead June 1, 2001. The opening of competition for residential customers would be phased in from September 1 through December 31, 2001.
At that same meeting two weeks ago, the PUCN approved an agreement to allow Nevada Power Company to increase its rates August 1 to recover increased costs of electricity and purchased power to serve customers and to implement a mandatory monthly rate adjustment for these costs. Today they approved an amendment to that agreement which procedurally separates those issues from the original agreement.
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