If you think your utility bills are getting bad, you ain’t seen nothing yet
Nothing like the powerless feeling that comes when you look at your first new-and-improved Sierra Pacific utility bill. You tear open the envelope cautiously, thinking: “Yeah, I’ve been conserving. I’ve turned my computers off during the day, invested in a $25 clothesline and made the kids read by candlelight in the evenings. How bad could it be?”
Power consumers are discovering the answer in recent weeks, as Sierra Pacific rate hikes become evident in our monthly bills. Besides incremental monthly rate hikes, there was a record-breaking 17 percent hike in March. But thanks to state legislation passed in recent months—and one bill still being debated in court—these hikes could be a mere drop in the bucket. A rate hike is coming down the pipe that some worry may be three times as big. And nobody’s sure what would happen to residential power bills if AB 661, which re-deregulates power for mines and casinos, gets a thumbs-up by the Nevada Supreme Court.
Yes, utility rates have gone up almost everywhere. But Nevada’s been hit hard. Nevada’s rate hikes are the second highest in the nation, according to a recent media survey. The only state that beat Nevada’s 25.3 percent increase from June 2000 to June 2001 was Rhode Island, where rates rose about 27 percent. California’s rates increased by only 3.4 percent. (These mind-bogglers were culled from a Reno Gazette-Journal graphic illustrating a story headlined: “Power crisis not affecting everyone.")
While the rate hikes may not be affecting power mongers in Washington, D.C., where rates have gone down more than 6 percent in the past 12 months, pretty much everyone in the Silver State will feel the pain.
Charlotte Pruiett lives on her Social Security check and income from working for the Washoe County Senior Citizen Center. She’s tried to conserve power at her home in Sparks, because she knew a rate increase was coming. She wasn’t prepared when her usual $104 bill jumped to $140.31.
It couldn’t have come at a worse time. Her husband died last month, so she’s already trying to get by on less income. What might she have to trim out of her budget?
“I don’t know yet,” she said. “I just got the bill. It’s not going to be easy, since everything else is going up, too. … I sure wasn’t looking for a $140 electric bill.”
For folks living paycheck to paycheck—or who, like Pruiett, survive on a fixed income like a monthly Social Security check—any monthly increase could force folks to choose between power and frivolous stuff, like food and needed medications.
“People—just very average consumers—are going to see $300 bills, even if they keep the house at high temperatures and insulate,” said consumer advocate Tim Hay of the Nevada Attorney General’s Bureau of Consumer Protection.
If you happen to number among Nevada’s 147,000 households who live at or below 150 percent of the state’s poverty level, there is help.
The state’s welfare division has some money to help qualifying low-income individuals with their power bills. The Low-Income Home Energy Assistance program gets about $3 million in federal funds, which earns it a ranking of 49th—or second worst—in the nation. AB 209, sponsored by Assemblywoman Bonnie Parnell, D-Carson City, allocated $4 million in state funds to boost LIHEA’s pot, and that’s exciting, said program director Linda Mercer. Since power bills started creeping into the upper atmosphere, there’s been a flood of families applying for assistance.
“We’ve seen an increase of about 80 percent,” Mercer said. “We have not run out of money yet. But we’re down to bare bones now.”
Another energy assistance program has run out of money. Because of the heavy demand for help, Sierra Pacific’s SAFES program, administered in Washoe County by the Community Services Agency, quickly used up this year’s allotment of $79,000. The program provides one-time assistance for people with shut-off notices.
“We’re hoping Sierra Pacific comes through with some more funds to finish out the year,” said Michele McKee, a CSA executive assistant. The agency did recently receive a $1.1 million federal grant to start a new energy savings account program for low-income families. For every dollar a family puts in, CSA matches it up to $450. The money can be used to pay bills or replace furnaces or energy-related appliances, McKee said. The CSA will also do energy audits and help do some energy-related repairs on homes for low-income families.
Another $5 million for low-income energy assistance is supposed to come from Sierra Pacific, as stipulated by AB 369’s passage during the state legislative session. But the money, Hay said, has been slow in coming.
About two weeks ago, Hay sent a letter to Sierra Pacific Resources’ CEO Walt Higgins. That same day, SPR had requested a residential natural gas rate hike of 55 percent. That hike, along with SPR’s 17 percent rate hike in March, imposes a serious hardship on low-income consumers, Hay wrote.
SPR said it is working with the Public Utilities Commission on the best way to fulfill its $5 million commitment.
“We’ve proposed a combination of low-income energy assistance payments and weatherization programs to make low-income households more energy efficient,” said Sierra Pacific spokesman Bob Sagan.
But wait. Utility rate hikes have only just begun for Nevadans. Here’s why.
Beside the $5 million contribution to a low-income energy fund, AB 369 put off the sale of SPR’s power plants in Nevada. That kept the power generating facilities in Nevada’s hands, essentially overseen by the Public Utilities Commission. To get the power company to agree to these things, legislators threw SPR a juicy bone called deferred accounting. Deferred accounting takes much of the risk out of the power biz, assuring that no matter how much Sierra Pacific spends to buy power or fuel, it’ll be able to charge the consumer enough to call the investment a success.
What does that mean for Joe Power-user?
Well, SPR estimated that it would need another biggie rate hike to balance the books in the very near future. In fact, it’ll need a rate hike of $550 to $800 million or more, between the northern Sierra Pacific Power Co. and the southern Nevada Power Co. That hike, anticipated early next year, will be three times the size of the 17 percent March hike.
Could things possibly get worse for power users in Nevada?
Glad you asked. The Nevada Supreme Court is still holding in its hands the fate of AB 661, the re-deregulation bill that would allow mines and casinos to look beyond SPR for better power bargains. (In fact, the smoke hadn’t cleared on the after-midnight passage of AB 661 when a press release announced that Harrah’s Entertainment had signed a seven-year power deal with Enron Energy Services.)
“Our folks are going to be stuck with high bills for years, while the casinos and mines get to shop around [for power],” Hay said.
The only hang-up for AB 661 is that it was passed after the midnight legislative deadline—but, hey, remember Daylight Savings Time?—and it wasn’t re-passed during the later special legislative session, as it became a wedge for those seeking redistricting clout. Jeesh. Only in Nevada.
With the remotely possible exception of AB 661, the utility got what it wanted during the 2001 Nevada Legislature. The Sierra Pacific Resources Web site features a report card with happy red check marks by seven pieces of Nevada utility legislation.
“It’s amazing how much presence the utilities had in the legislature," Hay said. "Between the [Sierra Pacific] lobbyists and staff, some committees met with more Sierra Pacific people than [committee] members. If you were a legislator, you couldn’t escape Sierra Pacific from morning ’til night."