Sierra Pacific Wants 9% Hike

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Customers of Sierra Pacific Power Co. would get a nearly 9 percent increase in their electricity bills, under a request for $83.5 million in new annual revenue filed Thursday by the Reno-based utility.
The deferred energy proposal filed with the state Public
Utilities Commission seeks to recover costs the company paid out to
purchase and generate power, and to establish "going-forward"
rates that reflect current market prices, utility representative
Mary Simmons said.
If approved by the commission, the proposal would result in a
monthly bill increase starting in May of just over $8, to about
$103, for the average residential customer using 740 kilowatt hours
of electricity. That's an 8.6 percent increase.
Simmons said the requested increase in annual revenues would
cover the utility's costs on a dollar-for-dollar basis and doesn't
include any profit for the company.
Simmons also said there's "no immediate answer" to when
volatile energy prices might stabilize, noting that the cost for
natural gas nationally has climbed to its highest level in history
during the past year.
Walt Higgins, chairman and chief executive of Sierra Pacific
Resources, the parent of Sierra Pacific Power and Las Vegas-based
Nevada Power Co., said last month that both utilities were planning
for rate increase requests based on rising natural gas costs.
Nevada Power's request will be filed in January.
Damage to Gulf Coast natural gas drilling rigs and processing
plants by hurricanes Katrina and Rita have driven up prices for
fuel for generating electricity, Higgins added.
State Consumer Advocate Eric Witkoski has said the utilities
commission could trim the rate increase requests if it determines
gas purchases were not prudent.
About half of the electricity supplied to Sierra's northern
Nevada customers is produced by company-owned, natural gas-fired
generators or bought from other suppliers who also use natural gas
as their generating fuel. The remaining 50 percent is supplied by
using other sources such as coal, hydro and geothermal power.
Sierra's latest request follows the recent approval it got from
the PUC for a 6.5 percent rate increase that took effect Nov. 1.
Nevada Power recently was granted a 3.75 percent rate increase
effective Oct. 1 that brought the average monthly bill for a
typical homeowner to just under $128