Starting in January, NV Energy customers in southern Nevada will see big changes to their bills. That’s because the state’s largest utility is moving forward with a controversial new rate structure known as daily demand pricing.
The move largely does away with how customers have traditionally paid for energy. Now, the company will charge ratepayers based on their peak daily demand — a 15-minute snapshot of a residential customer's highest electricity usage during the day.
The reason for the change, the company argues, is to make up for inequities between solar and non-solar customers. They say rooftop solar owners, who sell power back to the grid, aren’t paying their fair share for new electricity infrastructure and upkeep.
With the change, the company insists, a majority of its customers will see little to no increase in their bills; if anything, they’ll have more tools to help them save money. But many in the community aren’t buying it. Many others are confused.
So, what does the change mean for NV Energy customers and the company?
Instead of paying for how much power they use during the day, customers will now be charged 14 cents per kilowatt-hour for the 15 highest-usage minutes in a single day. The utility then multiplies that amount by four to determine a household's highest hourly impact on the grid for that day.
At the same time, NV Energy has reduced its basic service charge – the fee customers pay just to have service. It has also lowered the volumetric rate – how much customers pay for power.
The company says the restructuring will lead to lower bills for most customers. "The design of the entire rate is revenue neutral for the company," said NV Energy’s Senior Vice President of Regulatory and Resource Planning Shawn Elicegui during a meeting of the legislature’s Joint Interim Standing Committee on Growth and Infrastructure earlier this year.
"The amount of revenue the company is set to collect through its bills will not increase because of this charge," Elicegui went on to say. "What's happening is that the demand charge itself reflects how the customers use energy, i.e., their highest 15-minute usage on each day. ... If a customer runs their air conditioning and loads it up at the same time with other appliances, that only impacts that day and the very next day; their daily demand is reset."
Many in the community aren’t buying it. In June, southern Nevadans packed the Public Utilities Commission’s most recent consumer session to push back against NV Energy’s upcoming daily demand charge.
Robert Kasper, a retired union leader, was among those who showed up to voice concerns. "It's just a shell game," Kasper speculated. "It's a phony shell game. You ever try to look at an electric bill and try to figure out what your charges are and what they really are?"
Pastor G. Rodney King of Mount Ararat Baptist Church in North Las Vegas was another skeptical attendee. "We're already paying enough money as it is for everything else, and now they're talking about charging us the highest rate for 15 minutes for the whole day," King said. "That's unfair."
PUCN Commissioner Tammy Cordova was also at that consumer session. Before it opened to public comments, she told the crowd that the move was focused on lowering costs for the majority of NV Energy customers. And the best way to do that was to end some of the benefits that residential rooftop solar customers receive.
“I've heard folks talk about, 'My bill is so much; it is so hard to be able to afford,'" Cordova told the crowd. "Costs for everything are going up, which includes the cost for the poles and the infrastructure that the utility has to buy. And so (it went) case after case after case. I heard about this subsidy as a result of the way rates were designed, that people that couldn't afford solar were paying, because people who could afford solar weren't paying. And so, that's why I did something about it, was because folks came in here and they said, 'We can't afford you to keep increasing our bills,' and I said, well, one thing I do have control over is, I can say you don't have to pay that subsidy for the people that have solar anymore.”
Cordova said the PUCN bases its decision on evidentiary testimony and data. Evidence presented during PUCN meetings shows the change will amount to lower monthly bills for most customers. However, PUCN officials declined to comment on the record for this story.
Marie Steele was also at that Public Utilities Commission meeting. She’s NV Energy’s Vice President of Business Technology Integration. In a separate interview with KNPR, Steele reiterated that the move would balance inequities between solar and non-solar users.
"It's a modernization so that we can see and more accurately reflect how the grid is being used, and it's also to normalize inequity between solar and non-solar customers," Steele said. "I would say that we all need to pay our fair share, right? And so, and they are being compensated for the energy that they are exporting back. So this is just a more equitable way to pay for the grid that we are all using.”
Groups such as Vote Solar and Solar United Neighbors oppose the charge, as does the state's Bureau of Consumer Protection. They have filed two lawsuits challenging the rate, framing it as an illegal change that penalizes solar customers. Judges in Carson City and Clark County denied those suits from moving forward, siding with the PUCN and NV Energy.
Attorney General Aaron Ford has vowed to take the case to the state Supreme Court, but it remains unclear whether the court would take up the matter.
Kristee Watson is executive director of the Nevada Conservation League. She said the restructuring is aimed directly at halting the state’s progress on renewable energy development.
“The data supports that clean, renewable, affordable energy is the cheapest and most reliable way to go. Why we're even having conversations about expanding fossil fuel is beyond me," Watson said. "We have not exhausted our resources to make sure that we're investing in battery storage, geothermal, and solar energy. We're the sunniest state in the nation. Other states are meeting their renewable portfolio standard, and Nevada is not. And that is the fault of NV Energy, and the PUC needs to hold them accountable to that. There's absolutely no reason why we should be paying for dirty, expensive fossil fuels when we could, as the sunniest state in the nation, be leading the way on clean, affordable, renewable energy.”
For Mary Wagner, the move is especially upsetting because it punishes people who are trying to protect their families and the environment. Here’s Wagner, the Nevada field organizer for Moms Clean Air Force
“It's unfortunate that they are punishing the people who are doing the best to ensure that we are mitigating our energy resources in our state, but also the people that are doing something for clean air," Wagner said. "We do have high air pollution on top of extreme heat in our state, and it's unfair that people that are doing something to ensure that they're helping our state are being punished by the very company that's supposed to serve us.”
Despite the opposition, the new rate structure is, for all intents and purposes, the law of the land. Barring legal intervention, NV Energy’s Daily Demand charge will go into effect January 1st, 2027.
Between now and then, the company says, it will educate customers about the rate change’s effect on them.
"I think what will help in what's coming out in the next month is actually seeing that annual bill compare, right?" NV Energy's Marie Steele said. "So that's what's forthcoming in the next month is an annual bill compare and website tools that will help you see what your usage is at every 15-minute interval, right? Is it your air conditioning? Is it your pool pump? Right? They'll have a lot more information about what's going on behind the meter to help them see what's making up that bill. So, I think, you know, it'll be great to get more information into their hands, and that's what's happening now."
Still, other energy experts question the need for the change.
"The arguments that NV Energy is trying to make in this case and what other utilities have made over a number of years are trying to shift basically more of the cost that the utility incurs into some sort of a cost that's not controlled by the consumer," said Stephanie Chase, a research and communications manager at the Energy and Policy Institute.
Chase previously worked for the Public Counsel Unit at the Washington State Attorney General’s office as a regulatory analyst, advocating on behalf of consumers. According to her, there’s a pretty clear reason why NV Energy would go in this direction. It has to do with a customer’s two charges: fixed — for utility infrastructure and service — and usage.
"Utilities have a lot of incentives to try to shift more of those costs to being into the fixed charge versus into the variable charge because consumers can upgrade the the, you know, efficiency of their home," Chase said. "They can do weatherization and and those sorts of things to bring down their usage, but if the utility puts more into, sort of, these fixed charges or the, you know, more standard charges or a demand charge, then that is less controllable by the consumer, and the utility is going to be able to, you know, collect a bigger proportion of their bill through those those ways that the customer cannot control every month.”
As of now, NV Energy’s daily demand pricing is only slated to go into effect for Southern Nevada customers. Company officials have said on the record that they plan to impose the rate structure on northern Nevada customers in the future.
KNPR's Rafaela Gandolfo Bustamante and Heidi Kyser contributed to this story.
Note: NV Energy is a financial supporter of Nevada Public Radio.
