S.B. 417
- *SB417*
SENATE BILL NO. 417–COMMITTEE ON
GROWTH AND INFRASTRUCTURE
MARCH 20, 2025
____________
Referred to Committee on Growth and Infrastructure
SUMMARY—Revises provisions relating to natural gas utilities.
(BDR 58-1106)
FISCAL NOTE: Effect on Local Government: No.
Effect on the State: Yes.
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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
AN ACT relating to natural gas utilities; requiring the Public
Utilities Commission of Nevada to adopt regulations
governing the filing of an application for the
establishment of an alternative rate-making plan by a
natural gas utility; setting forth certain requirements for
the submission and approval of such an alternative rate-
making plan; and providing other matters properly
relating thereto.
Legislative Counsel’s Digest:
Existing law sets forth certain procedures for a public utility to make changes to 1
a general rate schedule by applying to Public Utilities Commission of Nevada. 2
(NRS 704.100, 704.110) Section 11 of this bill requires the Commission to adopt 3
regulations establishing procedures for a natural gas utility to apply to the 4
Commission for the approval of an alternative rate-making plan, which establishes 5
the alternative rate-making mechanisms that the natural gas utility is authorized to 6
use to set rates during the time period of the plan. The regulations adopted by the 7
Commission must: (1) establish the alternative rate-making mechanisms that may 8
be included in a plan and any limitations on such alternative rate-making 9
mechanisms; (2) prescribe the information that must be included in an alternative 10
rate-making plan and an application for the approval of such a plan; (3) specify the 11
circumstances under which a natural gas utility for which an alternative rate-12
making plan has been approved must file a general rate application; (4) provide a 13
process to educate customers of a natural gas utility regarding alternative rate-14
making mechanisms; (5) require a natural gas utility for which an alternative rate-15
making plan has been approved to keep certain records; and (6) establish criteria for 16
the evaluation of an alternative rate-making plan. 17
Section 12 of this bill authorizes a natural gas utility to submit an application to 18
establish an alternative rate-making plan pursuant to the regulations adopted by the 19
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Commission, establishes time limits for the Commission to approve or deny such 20
an application and requires the Commission to conduct a consumer session before 21
taking action on such an application. Section 12 requires an application for the 22
approval of an alternative rate-making plan to include a plan to educate the 23
customers of the natural gas utility regarding the alternative rate-making 24
mechanisms in the plan proposed by the utility. Section 12 prohibits the 25
Commission from approving an alternative rate-making plan unless the 26
Commission determines that the plan meets certain requirements. Section 12 also 27
authorizes an alternative rate-making plan to include certain provisions, including, 28
without limitation, a mechanism for earnings-sharing with the customers of the 29
utility. If an alternative rate-making plan includes a formula rate, section 12 30
authorizes the Commission to make certain considerations when determining 31
whether to approve the alternative rate-making plan, which include whether the 32
plan includes: (1) the recovery of the cost of certain capital expenditures; and (2) an 33
annual attrition adjustment. Finally, section 12 authorizes the Commission to 34
investigate and change rates, tolls, charges, rules, regulations, practices and services 35
relating to an alternative rate-making plan under certain circumstances. Section 13 36
of this bill provides that the provisions of this bill do not limit the existing rate-37
making authority of the Commission. 38
Sections 3-10 of this bill define certain terms relating to alternative rate-making 39
plans. 40
Sections 14 and 15 of this bill create exceptions from the procedure set forth in 41
existing law to change a general rate schedule to authorize a natural gas utility 42
to file an application to establish an alternative rate-making plan pursuant to 43
section 12. 44
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Chapter 704 of NRS is hereby amended by adding 1
thereto the provisions set forth as sections 2 to 13, inclusive, of this 2
act. 3
Sec. 2. As used in sections 2 to 13, inclusive, of this act, 4
unless the context otherwise requires, the words and terms defined 5
in sections 3 to 10, inclusive, of this act have the meanings 6
ascribed to them in those sections. 7
Sec. 3. “Alternative rate-making mechanism” means a rate-8
making mechanism in an alternative rate-making plan and 9
includes, without limitation, performance-based rates, formula 10
rates, multi-year rate plans, an earnings-sharing mechanism, 11
decoupling mechanism or any other rate-making mechanism 12
authorized by the Commission by regulation. 13
Sec. 4. “Alternative rate-making plan” means a plan that 14
would implement one or more alternative rate-making 15
mechanisms to be used in addition to or in place of the rate-16
making process established by NRS 704.110. 17
Sec. 5. “Decoupling mechanism” means a mechanism that 18
disassociates a natural gas utility’s financial performance and 19
results from the sales of natural gas by the natural gas utility. 20
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Sec. 6. “Earnings-sharing mechanism” means a mechanism 1
designed by the Commission that requires a natural gas utility to 2
share earnings with its customers. 3
Sec. 7. “Formula rates” means rates that are periodically 4
adjusted based on a predetermined formula approved by the 5
Commission without the need for a natural gas utility to file a 6
general rate application pursuant to NRS 704.110. 7
Sec. 8. “Multi-year rate plan” means a rate mechanism 8
under which the Commission sets rates and revenue requirements 9
for a multi-year plan period of more than 36 months, including, 10
without limitation, a plan which authorizes periodic changes in 11
rates, including, without limitation, adjustments to account for 12
inflation or capital investments, without a general rate application. 13
Sec. 9. “Natural gas utility” means a public utility which 14
purchases natural gas for resale. 15
Sec. 10. “Performance-based rates” means rates that are set 16
or adjusted based on the performance of a natural gas utility, as 17
determined by such performance metrics as the Commission may 18
establish. 19
Sec. 11. 1. The Commission shall adopt regulations to 20
establish procedures for a natural gas utility to apply to the 21
Commission for the approval of an alternative rate-making plan. 22
The regulations must: 23
(a) Establish the alternative rate-making mechanisms that may 24
be included in such a plan and any limitations on such alternative 25
rate-making mechanisms as the Commission deems appropriate, 26
including, without limitation, any restrictions on the types of 27
alternative rate-making mechanisms that may be used in concert 28
within the same alternative rate-making plan. 29
(b) Prescribe the information that must be included in an 30
alternative rate-making plan and an application submitted in 31
accordance with the regulations adopted pursuant to this section. 32
(c) Specify the circumstances under which a natural gas utility 33
for which the Commission has approved an alternative rate-34
making plan is required to file a general rate application pursuant 35
to NRS 704.110, including, without limitation, if the alternative 36
rate-making plan ceases to meet the criteria established by the 37
Commission pursuant to paragraph (g) or the natural gas utility 38
has not filed a general rate application pursuant to NRS 704.110 39
within the immediately preceding 6 years. 40
(d) Provide a process to educate customers of a natural gas 41
utility regarding the available alternative rate-making mechanisms 42
that may be included in an alternative rate-making plan. 43
(e) Establish requirements for a natural gas utility for which 44
the Commission has approved an alternative rate-making plan to 45
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keep or cause to be kept any information and records which the 1
natural gas utility would have been required to submit to the 2
Commission as part of an application filed pursuant to NRS 3
704.100 or 704.185, if the filing of any such application is delayed 4
or excused pursuant to the alternative rate-making plan. 5
(f) If the Commission determines that it is practicable, require 6
a natural gas utility to include in its application for the approval of 7
an alternative rate-making plan: 8
(1) One or more cost-of-service studies; and 9
(2) An analysis estimating and comparing: 10
(I) The rates that would be charged and the revenue that 11
would be collected under the alternative rate-making plan 12
proposed in the application; and 13
(II) The rates that would be charged and the revenue 14
that would be collected pursuant to alternative rate-making 15
process established by NRS 704.100. 16
(g) Establish the criteria for the evaluation of an alternative 17
rate-making plan for a natural gas utility which may include, 18
without limitation, whether the plan: 19
(1) Provides for just and reasonable rates that are 20
comparable to rates established pursuant to NRS 704.110; 21
(2) Ensures that customers of a natural gas utility benefit 22
from lower regulatory administrative costs where appropriate; and 23
(3) Balances the interests of customers and shareholders. 24
2. The Commission is not required to accept applications to 25
establish an alternative rate-making plan if the Commission 26
determines, after a reasonable investigation, that the use of an 27
alternative rate-making plan is not consistent with the criteria 28
established by the Commission pursuant to paragraph (g) of 29
subsection 1. 30
Sec. 12. 1. Except as otherwise provided in subsection 2 of 31
section 11 of this act and in accordance with the regulations 32
adopted by the Commission pursuant to section 11 of this act, not 33
earlier than the date on which the Commission first adopts 34
regulations pursuant to section 11 of this act, a natural gas utility 35
may apply to the Commission to establish an alternative rate-36
making plan which sets forth the alternative rate-making 37
mechanisms to be used to establish rates during the time period 38
covered by the plan. 39
2. The Commission shall approve, with or without 40
modifications, or deny an application submitted pursuant to 41
subsection 1 not later than 210 days after the Commission receives 42
a copy of the application unless the Commission, upon good 43
cause, extends by not more than 90 days the time to act upon the 44
application. If the Commission fails to act upon an application 45
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within the time provided by this subsection, the application shall 1
be deemed to be denied. 2
3. The Commission shall conduct at least one consumer 3
session pursuant to NRS 704.069 to solicit comments from the 4
public before taking action on an application submitted pursuant 5
to subsection 1. 6
4. The Commission shall not approve an application 7
submitted pursuant to subsection 1 unless the Commission 8
determines that the plan: 9
(a) Is in the public interest; 10
(b) Results in just and reasonable rates, as determined by the 11
Commission; 12
(c) Protects the interests of the customers of the natural gas 13
utility; 14
(d) Satisfies the criteria established by the Commission 15
pursuant to paragraph (g) of subsection 1 of section 11 of this act; 16
(e) Specifies the time period to which the plan applies; and 17
(f) Includes a plan for educating the customers of the natural 18
gas utility regarding the alternative rate-making mechanisms 19
included in the plan. 20
5. An alternative rate-making plan may include, without 21
limitation: 22
(a) An earnings-sharing mechanism that balances the interests 23
of customers that purchase natural gas for consumption in this 24
State and the shareholders of the natural gas utility; and 25
(b) Any other term or condition proposed by a natural gas 26
utility or any party participating in the proceeding or that the 27
Commission finds is reasonable and serves the public interest. 28
6. If an alternative rate-making plan includes a formula rate, 29
the Commission may, in determining whether to approve the 30
alternative rate-making plan, consider whether the alternative 31
rate-making plan includes: 32
(a) The recovery of the costs of a capital expenditure incurred 33
by the natural gas utility, as adjusted for any accumulated 34
depreciation, deferred taxes and property taxes; or 35
(b) An annual attrition adjustment based on a Consumer Price 36
Index published by the United States Department of Labor and 37
approved by the Commission for the purposes of the alternative 38
rate-making plan. 39
7. If the Commission approves an alternative rate-making 40
plan that includes the recovery of the costs of a capital 41
expenditure pursuant to subsection 6, the natural gas utility must 42
prove that the capital expenditure was prudent at the time the 43
natural gas utility files a general rate application pursuant to 44
NRS 704.110. 45
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8. The Commission may at any time, upon its own motion or 1
after receiving a complaint from any customer, the Consumer’s 2
Advocate or the Regulatory Operations Staff of the Commission, 3
investigate any of the rates, tolls, charges, rules, regulations, 4
practices and services relating to the alternative rate-making plan, 5
and, after a full hearing as provided in NRS 704.120, by order, 6
make such changes as may be just and reasonable to the same 7
extent as authorized by NRS 704.120. 8
Sec. 13. The provisions of sections 2 to 12, inclusive, of this 9
act must not be construed to limit the existing rate-making 10
authority of the Commission. 11
Sec. 14. NRS 704.100 is hereby amended to read as follows: 12
704.100 1. Except as otherwise provided in NRS 704.075, 13
704.68861 to 704.68887, inclusive, 704.7865 and 704.7867, or as 14
may otherwise be provided by the Commission pursuant to NRS 15
704.095, 704.097 or 704.7621 [:] or section 12 of this act: 16
(a) A public utility shall not make changes in any schedule, 17
unless the public utility: 18
(1) Files with the Commission an application to make the 19
proposed changes and the Commission approves the proposed 20
changes pursuant to NRS 704.110; or 21
(2) Files the proposed changes with the Commission using a 22
letter of advice in accordance with the provisions of paragraph (f) or 23
(g). 24
(b) A public utility shall adjust its rates on a quarterly basis 25
between annual rate adjustment applications pursuant to subsection 26
8 of NRS 704.110 based on changes in the public utility’s recorded 27
costs of natural gas purchased for resale. 28
(c) An electric utility shall, between annual deferred energy 29
accounting adjustment applications filed pursuant to NRS 704.187, 30
adjust its rates on a quarterly basis pursuant to subsection 10 of 31
NRS 704.110. 32
(d) A public utility shall post copies of all proposed schedules 33
and all new or amended schedules in the same offices and in 34
substantially the same form, manner and places as required by NRS 35
704.070 for the posting of copies of schedules that are currently in 36
force. 37
(e) A public utility may not set forth as justification for a rate 38
increase any items of expense or rate base that previously have been 39
considered and disallowed by the Commission, unless those items 40
are clearly identified in the application and new facts or 41
considerations of policy for each item are advanced in the 42
application to justify a reversal of the prior decision of the 43
Commission. 44
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(f) Except as otherwise provided in paragraph (g), if the 1
proposed change in any schedule does not change any rate or will 2
result in an increase in annual gross operating revenue in an amount 3
that does not exceed $15,000: 4
(1) The public utility may file the proposed change with the 5
Commission using a letter of advice in lieu of filing an application; 6
and 7
(2) The Commission shall determine whether it should 8
dispense with a hearing regarding the proposed change. 9
A letter of advice filed pursuant to this paragraph must include a 10
certification by the attorney for the public utility or an affidavit by 11
an authorized representative of the public utility that to the best of 12
the signatory’s knowledge, information and belief, formed after a 13
reasonable inquiry, the proposed change in schedule does not 14
change any rate or result in an increase in the annual gross operating 15
revenue of the public utility in an amount that exceeds $15,000. 16
(g) If the applicant is a small-scale provider of last resort and the 17
proposed change in any schedule will result in an increase in annual 18
gross operating revenue in an amount that does not exceed $50,000 19
or 10 percent of the applicant’s annual gross operating revenue, 20
whichever is less: 21
(1) The small-scale provider of last resort may file the 22
proposed change with the Commission using a letter of advice in 23
lieu of filing an application if the small-scale provider of last resort: 24
(I) Includes with the letter of advice a certification by the 25
attorney for the small-scale provider of last resort or an affidavit by 26
an authorized representative of the small-scale provider of last resort 27
that to the best of the signatory’s knowledge, information and belief, 28
formed after a reasonable inquiry, the proposed change in schedule 29
does not change any rate or result in an increase in the annual gross 30
operating revenue of the small-scale provider of last resort in an 31
amount that exceeds $50,000 or 10 percent, whichever is less; 32
(II) Demonstrates that the proposed change in schedule is 33
required by or directly related to a regulation or order of the Federal 34
Communications Commission; and 35
(III) Except as otherwise provided in subsection 2, files 36
the letter of advice not later than 5 years after the Commission has 37
issued a final order on a general rate application filed by the 38
applicant in accordance with subsection 3 of NRS 704.110; and 39
(2) The Commission shall determine whether it should 40
dispense with a hearing regarding the proposed change. 41
Not later than 10 business days after the filing of a letter of 42
advice pursuant to subparagraph (1), the Regulatory Operations 43
Staff of the Commission or any other interested party may file with 44
the Commission a request that the Commission order an applicant to 45
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file a general rate application in accordance with subsection 3 of 1
NRS 704.110. The Commission may hold a hearing to consider such 2
a request. 3
(h) In making the determination pursuant to paragraph (f) or (g), 4
the Commission shall first consider all timely written protests, any 5
presentation that the Regulatory Operations Staff of the Commission 6
may desire to present, the application of the public utility and any 7
other matters deemed relevant by the Commission. 8
2. An applicant that is a small-scale provider of last resort may 9
submit to the Commission a written request for a waiver of the 5-10
year period specified in sub-subparagraph (III) of subparagraph (1) 11
of paragraph (g) of subsection 1. The Commission shall, not later 12
than 90 days after receipt of such a request, issue an order approving 13
or denying the request. The Commission may approve the request if 14
the applicant provides proof satisfactory to the Commission that the 15
applicant is not earning more than the rate of return authorized by 16
the Commission and that it is in the public interest for the 17
Commission to grant the request for a waiver. The Commission 18
shall not approve a request for a waiver if the request is submitted 19
later than 7 years after the issuance by the Commission of a final 20
order on a general rate application filed by the applicant in 21
accordance with subsection 3 of NRS 704.110. If the Commission 22
approves a request for a waiver submitted pursuant to this 23
subsection, the applicant shall file the letter of advice pursuant to 24
subparagraph (1) of paragraph (g) of subsection 1 not earlier than 25
120 days after the date on which the applicant submitted the request 26
for a waiver pursuant to this subsection, unless the order issued by 27
the Commission approving the request for a waiver specifies a 28
different period for the filing of the letter of advice. 29
3. As used in this section, “electric utility” has the meaning 30
ascribed to it in NRS 704.187. 31
Sec. 15. NRS 704.110 is hereby amended to read as follows: 32
704.110 Except as otherwise provided in NRS 704.075, 33
704.68861 to 704.68887, inclusive, and 704.7865, or as may 34
otherwise be provided by the Commission pursuant to NRS 35
704.095, 704.097 or 704.7621 [:] or section 12 of this act: 36
1. If a public utility files with the Commission an application to 37
make changes in any schedule, including, without limitation, 38
changes that will result in a discontinuance, modification or 39
restriction of service, the Commission shall investigate the propriety 40
of the proposed changes to determine whether to approve or 41
disapprove the proposed changes. If an electric utility files such an 42
application and the application is a general rate application or an 43
annual deferred energy accounting adjustment application, the 44
Consumer’s Advocate shall be deemed a party of record. 45
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2. Except as otherwise provided in subsection 3, if a public 1
utility files with the Commission an application to make changes in 2
any schedule, the Commission shall, not later than 210 days after the 3
date on which the application is filed, issue a written order 4
approving or disapproving, in whole or in part, the proposed 5
changes. 6
3. If a public utility files with the Commission a general rate 7
application, the public utility shall submit with its application a 8
statement showing the recorded results of revenues, expenses, 9
investments and costs of capital for its most recent 12 months for 10
which data were available when the application was prepared. 11
Except as otherwise provided in subsection 4, in determining 12
whether to approve or disapprove any increased rates, the 13
Commission shall consider evidence in support of the increased 14
rates based upon actual recorded results of operations for the same 15
12 months, adjusted for increased revenues, any increased 16
investment in facilities, increased expenses for depreciation, certain 17
other operating expenses as approved by the Commission and 18
changes in the costs of securities which are known and are 19
measurable with reasonable accuracy at the time of filing and which 20
will become effective within 6 months after the last month of those 21
12 months, but the public utility shall not place into effect any 22
increased rates until the changes have been experienced and 23
certified by the public utility to the Commission and the 24
Commission has approved the increased rates. The Commission 25
shall also consider evidence supporting expenses for depreciation, 26
calculated on an annual basis, applicable to major components of the 27
public utility’s plant placed into service during the recorded test 28
period or the period for certification as set forth in the application. 29
Adjustments to revenues, operating expenses and costs of securities 30
must be calculated on an annual basis. Within 90 days after the date 31
on which the certification required by this subsection is filed with 32
the Commission, or within the period set forth in subsection 2, 33
whichever time is longer, the Commission shall make such order in 34
reference to the increased rates as is required by this chapter. The 35
following public utilities shall each file a general rate application 36
pursuant to this subsection based on the following schedule: 37
(a) An electric utility that primarily serves less densely 38
populated counties shall file a general rate application: 39
(1) Not later than 5 p.m. on or before the first Monday in 40
June 2019; and 41
(2) At least once every 36 months thereafter or on a date 42
specified in an alternative rate-making plan approved by the 43
Commission pursuant to NRS 704.7621. 44
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(b) An electric utility that primarily serves densely populated 1
counties shall file a general rate application: 2
(1) Not later than 5 p.m. on or before the first Monday in 3
June 2020; and 4
(2) At least once every 36 months thereafter or on a date 5
specified in an alternative rate-making plan approved by the 6
Commission pursuant to NRS 704.7621. 7
(c) A public utility that furnishes water for municipal, industrial 8
or domestic purposes or services for the disposal of sewage, or both, 9
which had an annual gross operating revenue of $2,000,000 or more 10
for at least 1 year during the immediately preceding 3 years and 11
which had not filed a general rate application with the Commission 12
on or after July 1, 2005, shall file a general rate application on or 13
before June 30, 2008, and at least once every 36 months thereafter 14
unless waived by the Commission pursuant to standards adopted by 15
regulation of the Commission. If a public utility furnishes both 16
water and services for the disposal of sewage, its annual gross 17
operating revenue for each service must be considered separately for 18
determining whether the public utility meets the requirements of this 19
paragraph for either service. 20
(d) A public utility that furnishes water for municipal, industrial 21
or domestic purposes or services for the disposal of sewage, or both, 22
which had an annual gross operating revenue of $2,000,000 or more 23
for at least 1 year during the immediately preceding 3 years and 24
which had filed a general rate application with the Commission on 25
or after July 1, 2005, shall file a general rate application on or before 26
June 30, 2009, and at least once every 36 months thereafter unless 27
waived by the Commission pursuant to standards adopted by 28
regulation of the Commission. If a public utility furnishes both 29
water and services for the disposal of sewage, its annual gross 30
operating revenue for each service must be considered separately for 31
determining whether the public utility meets the requirements of this 32
paragraph for either service. 33
The Commission shall adopt regulations setting forth standards 34
for waivers pursuant to paragraphs (c) and (d) and for including the 35
costs incurred by the public utility in preparing and presenting the 36
general rate application before the effective date of any change in 37
rates. 38
4. In addition to submitting the statement required pursuant to 39
subsection 3, a public utility may submit with its general rate 40
application a statement showing the effects, on an annualized basis, 41
of all expected changes in circumstances. If such a statement is 42
filed, it must include all increases and decreases in revenue and 43
expenses which may occur within 210 days after the date on which 44
its general rate application is filed with the Commission if such 45
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expected changes in circumstances are reasonably known and are 1
measurable with reasonable accuracy. If a public utility submits 2
such a statement, the public utility has the burden of proving that the 3
expected changes in circumstances set forth in the statement are 4
reasonably known and are measurable with reasonable accuracy. 5
The Commission shall consider expected changes in circumstances 6
to be reasonably known and measurable with reasonable accuracy if 7
the expected changes in circumstances consist of specific and 8
identifiable events or programs rather than general trends, patterns 9
or developments, have an objectively high probability of occurring 10
to the degree, in the amount and at the time expected, are primarily 11
measurable by recorded or verifiable revenues and expenses and are 12
easily and objectively calculated, with the calculation of the 13
expected changes relying only secondarily on estimates, forecasts, 14
projections or budgets. If the Commission determines that the public 15
utility has met its burden of proof: 16
(a) The Commission shall consider the statement submitted 17
pursuant to this subsection and evidence relevant to the statement, 18
including all reasonable projected or forecasted offsets in revenue 19
and expenses that are directly attributable to or associated with the 20
expected changes in circumstances under consideration, in addition 21
to the statement required pursuant to subsection 3 as evidence in 22
establishing just and reasonable rates for the public utility; and 23
(b) The public utility is not required to file with the Commission 24
the certification that would otherwise be required pursuant to 25
subsection 3. 26
5. If a public utility files with the Commission an application to 27
make changes in any schedule and the Commission does not issue a 28
final written order regarding the proposed changes within the time 29
required by this section, the proposed changes shall be deemed to be 30
approved by the Commission. 31
6. If a public utility files with the Commission a general rate 32
application, the public utility, or a public utility affiliated with the 33
public utility through common ownership, shall not file with the 34
Commission another general rate application until all pending 35
general rate applications filed by that public utility have been 36
decided by the Commission unless, after application and hearing, 37
the Commission determines that a substantial financial emergency 38
would exist if the public utility or its affiliate is not permitted to file 39
another general rate application sooner. The provisions of this 40
subsection do not prohibit a public utility from filing with the 41
Commission, while a general rate application is pending, an 42
application to recover the increased cost of purchased fuel, 43
purchased power, or natural gas purchased for resale pursuant to 44
subsection 7, a quarterly rate adjustment pursuant to subsection 8 or 45
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10, any information relating to deferred accounting requirements 1
pursuant to NRS 704.185 or an annual deferred energy accounting 2
adjustment application pursuant to NRS 704.187, if the public utility 3
is otherwise authorized to so file by those provisions. 4
7. A public utility may file an application to recover the 5
increased cost of purchased fuel, purchased power, or natural gas 6
purchased for resale once every 30 days. The provisions of this 7
subsection do not apply to: 8
(a) An electric utility which is required to adjust its rates on a 9
quarterly basis pursuant to subsection 10; or 10
(b) A public utility which purchases natural gas for resale and 11
which adjusts its rates on a quarterly basis pursuant to subsection 8. 12
8. A public utility which purchases natural gas for resale must 13
request approval from the Commission to adjust its rates on a 14
quarterly basis between annual rate adjustment applications based 15
on changes in the public utility’s recorded costs of natural gas 16
purchased for resale. A public utility which purchases natural gas 17
for resale and which adjusts its rates on a quarterly basis may 18
request approval from the Commission to make quarterly 19
adjustments to its deferred energy accounting adjustment. The 20
Commission shall approve or deny such a request not later than 120 21
days after the application is filed with the Commission. The 22
Commission may approve the request if the Commission finds that 23
approval of the request is in the public interest. If the Commission 24
approves a request to make quarterly adjustments to the deferred 25
energy accounting adjustment of a public utility pursuant to this 26
subsection, any quarterly adjustment to the deferred energy 27
accounting adjustment must not exceed 2.5 cents per therm of 28
natural gas. If the balance of the public utility’s deferred account 29
varies by less than 5 percent from the public utility’s annual 30
recorded costs of natural gas which are used to calculate quarterly 31
rate adjustments, the deferred energy accounting adjustment must be 32
set to zero cents per therm of natural gas. 33
9. If the Commission approves a request to make any rate 34
adjustments on a quarterly basis pursuant to subsection 8: 35
(a) The public utility shall file written notice with the 36
Commission before the public utility makes a quarterly rate 37
adjustment. A quarterly rate adjustment is not subject to the 38
requirements for notice and a hearing pursuant to NRS 703.320 or 39
the requirements for a consumer session pursuant to subsection 1 of 40
NRS 704.069. 41
(b) The public utility shall provide written notice of each 42
quarterly rate adjustment to its customers by including the written 43
notice with a customer’s regular monthly bill or by electronic 44
transmission pursuant to NRS 704.188. The public utility shall 45
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begin providing such written notice to its customers not later than 30 1
days after the date on which the public utility files its written notice 2
with the Commission pursuant to paragraph (a). The written notice 3
required by this paragraph: 4
(1) Must be printed separately, if included with the 5
customer’s regular monthly bill, or the subject line of the electronic 6
transmission must indicate that notice of a quarterly rate adjustment 7
is included, if provided by electronic transmission pursuant to NRS 8
704.188; and 9
(2) Must include the following in clear and bold text: 10
(I) The total amount of the increase or decrease in the 11
public utility’s revenues from the rate adjustment, stated in dollars 12
and as a percentage; 13
(II) The amount of the monthly increase or decrease in 14
charges for each class of customer or class of service, stated in 15
dollars and as a percentage; 16
(III) A statement that customers may send written 17
comments or protests regarding the rate adjustment to the 18
Commission; 19
(IV) A statement that the transactions and recorded costs 20
of natural gas which are the basis for any quarterly rate adjustment 21
will be reviewed for reasonableness and prudence in the next 22
proceeding held by the Commission to review the annual rate 23
adjustment application pursuant to paragraph (d); and 24
(V) Any other information required by the Commission. 25
(c) The public utility shall file an annual rate adjustment 26
application with the Commission. The annual rate adjustment 27
application is subject to the requirements for notice and a hearing 28
pursuant to NRS 703.320 and the requirements for a consumer 29
session pursuant to subsection 1 of NRS 704.069. 30
(d) The proceeding regarding the annual rate adjustment 31
application must include a review of each quarterly rate adjustment 32
and the transactions and recorded costs of natural gas included in 33
each quarterly filing and the annual rate adjustment application. 34
There is no presumption of reasonableness or prudence for any 35
quarterly rate adjustment or for any transactions or recorded costs of 36
natural gas included in any quarterly rate adjustment or the annual 37
rate adjustment application, and the public utility has the burden of 38
proving reasonableness and prudence in the proceeding. 39
(e) The Commission shall not allow the public utility to recover 40
any recorded costs of natural gas which were the result of any 41
practice or transaction that was unreasonable or was undertaken, 42
managed or performed imprudently by the public utility, and the 43
Commission shall order the public utility to adjust its rates if the 44
Commission determines that any recorded costs of natural gas 45
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included in any quarterly rate adjustment or the annual rate 1
adjustment application were not reasonable or prudent. 2
10. An electric utility shall adjust its rates on a quarterly basis 3
based on changes in the electric utility’s recorded costs of purchased 4
fuel or purchased power. In addition to adjusting its rates on a 5
quarterly basis, an electric utility may request approval from the 6
Commission to make quarterly adjustments to its deferred energy 7
accounting adjustment. The Commission shall approve or deny such 8
a request not later than 120 days after the application is filed with 9
the Commission. The Commission may approve the request if the 10
Commission finds that approval of the request is in the public 11
interest. If the Commission approves a request to make quarterly 12
adjustments to the deferred energy accounting adjustment of an 13
electric utility pursuant to this subsection, any quarterly adjustment 14
to the deferred energy accounting adjustment must not exceed 0.25 15
cents per kilowatt-hour of electricity. If the balance of the electric 16
utility’s deferred account varies by less than 5 percent from the 17
electric utility’s annual recorded costs for purchased fuel or 18
purchased power which are used to calculate quarterly rate 19
adjustments, the deferred energy accounting adjustment must be set 20
to zero cents per kilowatt-hour of electricity. 21
11. A quarterly rate adjustment filed pursuant to subsection 10 22
is subject to the following requirements: 23
(a) The electric utility shall file written notice with the 24
Commission on or before August 15, 2007, and every quarter 25
thereafter of the quarterly rate adjustment to be made by the electric 26
utility for the following quarter. The first quarterly rate adjustment 27
by the electric utility will take effect on October 1, 2007, and each 28
subsequent quarterly rate adjustment will take effect every quarter 29
thereafter. The first quarterly adjustment to a deferred energy 30
accounting adjustment must be made pursuant to an order issued by 31
the Commission approving the application of an electric utility to 32
make quarterly adjustments to its deferred energy accounting 33
adjustment. A quarterly rate adjustment is not subject to the 34
requirements for notice and a hearing pursuant to NRS 703.320 or 35
the requirements for a consumer session pursuant to subsection 1 of 36
NRS 704.069. 37
(b) The electric utility shall provide written notice of each 38
quarterly rate adjustment to its customers by including the written 39
notice with a customer’s regular monthly bill or by electronic 40
submission pursuant to NRS 704.188. The electric utility shall begin 41
providing such written notice to its customers not later than 30 days 42
after the date on which the electric utility files a written notice with 43
the Commission pursuant to paragraph (a). The written notice 44
required by this paragraph: 45
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(1) Must be printed separately, if included with the 1
customer’s regular monthly bill, or the subject line of the electronic 2
transmission must indicate that notice of a quarterly rate adjustment 3
is included, if provided by electronic transmission pursuant to NRS 4
704.188; and 5
(2) Must include the following in clear and bold text: 6
(I) The total amount of the increase or decrease in the 7
electric utility’s revenues from the rate adjustment, stated in dollars 8
and as a percentage; 9
(II) The amount of the monthly increase or decrease in 10
charges for each class of customer or class of service, stated in 11
dollars and as a percentage; 12
(III) A statement that customers may send written 13
comments or protests regarding the rate adjustment to the 14
Commission; 15
(IV) A statement that the transactions and recorded costs 16
of purchased fuel or purchased power which are the basis for any 17
quarterly rate adjustment will be reviewed for reasonableness and 18
prudence in the next proceeding held by the Commission to review 19
the annual deferred energy accounting adjustment application 20
pursuant to paragraph (d); and 21
(V) Any other information required by the Commission. 22
(c) The electric utility shall file an annual deferred energy 23
accounting adjustment application pursuant to NRS 704.187 with 24
the Commission. The annual deferred energy accounting adjustment 25
application is subject to the requirements for notice and a hearing 26
pursuant to NRS 703.320 and the requirements for a consumer 27
session pursuant to subsection 1 of NRS 704.069. 28
(d) The proceeding regarding the annual deferred energy 29
accounting adjustment application must include a review of each 30
quarterly rate adjustment and the transactions and recorded costs of 31
purchased fuel and purchased power included in each quarterly 32
filing and the annual deferred energy accounting adjustment 33
application. There is no presumption of reasonableness or prudence 34
for any quarterly rate adjustment or for any transactions or recorded 35
costs of purchased fuel and purchased power included in any 36
quarterly rate adjustment or the annual deferred energy accounting 37
adjustment application, and the electric utility has the burden of 38
proving reasonableness and prudence in the proceeding. 39
(e) The Commission shall not allow the electric utility to recover 40
any recorded costs of purchased fuel and purchased power which 41
were the result of any practice or transaction that was unreasonable 42
or was undertaken, managed or performed imprudently by the 43
electric utility, and the Commission shall order the electric utility to 44
adjust its rates if the Commission determines that any recorded costs 45
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of purchased fuel and purchased power included in any quarterly 1
rate adjustment or the annual deferred energy accounting adjustment 2
application were not reasonable or prudent. 3
12. If an electric utility files an annual deferred energy 4
accounting adjustment application pursuant to subsection 11 and 5
NRS 704.187 while a general rate application is pending, the 6
electric utility shall: 7
(a) Submit with its annual deferred energy accounting 8
adjustment application information relating to the cost of service 9
and rate design; and 10
(b) Supplement its general rate application with the same 11
information, if such information was not submitted with the general 12
rate application. 13
13. A utility facility identified in a 3-year plan submitted 14
pursuant to NRS 704.741 and accepted by the Commission for 15
acquisition or construction pursuant to NRS 704.751 and the 16
regulations adopted pursuant thereto, or the retirement or 17
elimination of a utility facility identified in an emissions reduction 18
and capacity replacement plan submitted pursuant to NRS 704.7316 19
and accepted by the Commission for retirement or elimination 20
pursuant to NRS 704.751 and the regulations adopted pursuant 21
thereto, shall be deemed to be a prudent investment. The utility may 22
recover all just and reasonable costs of planning and constructing, or 23
retiring or eliminating, as applicable, such a facility. For the 24
purposes of this subsection, a plan or an amendment to a plan shall 25
be deemed to be accepted by the Commission only as to that portion 26
of the plan or amendment accepted as filed or modified with the 27
consent of the utility pursuant to NRS 704.751. 28
14. In regard to any rate or schedule approved or disapproved 29
pursuant to this section, the Commission may, after a hearing: 30
(a) Upon the request of the utility, approve a new rate but delay 31
the implementation of that new rate: 32
(1) Until a date determined by the Commission; and 33
(2) Under conditions as determined by the Commission, 34
including, without limitation, a requirement that interest charges be 35
included in the collection of the new rate; and 36
(b) Authorize a utility to implement a reduced rate for low-37
income residential customers. 38
15. The Commission may, upon request and for good cause 39
shown, permit a public utility which purchases natural gas for resale 40
or an electric utility to make a quarterly adjustment to its deferred 41
energy accounting adjustment in excess of the maximum allowable 42
adjustment pursuant to subsection 8 or 10. 43
16. A public utility which purchases natural gas for resale or an 44
electric utility that makes quarterly adjustments to its deferred 45
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energy accounting adjustment pursuant to subsection 8 or 10 may 1
submit to the Commission for approval an application to discontinue 2
making quarterly adjustments to its deferred energy accounting 3
adjustment and to subsequently make annual adjustments to its 4
deferred energy accounting adjustment. The Commission may 5
approve an application submitted pursuant to this subsection if the 6
Commission finds that approval of the application is in the public 7
interest. 8
17. As used in this section: 9
(a) “Deferred energy accounting adjustment” means the rate of a 10
public utility which purchases natural gas for resale or an electric 11
utility that is calculated by dividing the balance of a deferred 12
account during a specified period by the total therms or kilowatt-13
hours which have been sold in the geographical area to which the 14
rate applies during the specified period, not including kilowatt-hours 15
sold pursuant to an expanded solar access program established 16
pursuant to NRS 704.7865. 17
(b) “Electric utility” has the meaning ascribed to it in 18
NRS 704.187. 19
(c) “Electric utility that primarily serves densely populated 20
counties” means an electric utility that, with regard to the provision 21
of electric service, derives more of its annual gross operating 22
revenue in this State from customers located in counties whose 23
population is 700,000 or more than it does from customers located 24
in counties whose population is less than 700,000. 25
(d) “Electric utility that primarily serves less densely populated 26
counties” means an electric utility that, with regard to the provision 27
of electric service, derives more of its annual gross operating 28
revenue in this State from customers located in counties whose 29
population is less than 700,000 than it does from customers located 30
in counties whose population is 700,000 or more. 31
H