Read the full stored bill text
- 83rd Session (2025)
Assembly Bill No. 452–Assemblymember Brown-May
CHAPTER..........
AN ACT relating to public utilities; requiring the Public Utilities
Commission of Nevada to open one or more investigatory
dockets to examine certain matters relating to a potential
cost-sharing adjustment mechanism; requiring a utility to
refund certain overcharges; revising provisions governing
certain applications filed by a public utility ; and providing
other matters properly relating thereto.
Legislative Counsel’s Digest:
Section 1.3 of this bill requires the Public Utilities Commission of Nevada to
open one or more investigatory dockets to examine certain matters relating to a
potential cost-sharing adjustm ent mechanism for the recovery of costs for
purchased fuel and purchased power and the sharing of such costs between an
electric utility and its customers. Section 1.3 requires the Commission to submit
periodic reports to the Joint Interim Standing Committee on Growth and
Infrastructure concerning the progress of each investigatory docket and, on or
before July 1, 2026, submit a final report to the Legislative Commissio n on the
outcomes of the investigatory docket s. Under section 1.3 , the Commission is
authorized to adopt regulations to establish a cost-sharing adjustment mechanism, if
the Commission finds it is in the public interest as a result of the investigatory
docket.
If the Commission determines that a utility has charged a customer more than
any applicable rate or tariff allows, section 1.7 of this bill requires a utility to
refund to the customer, with interest, the full amount of any overcharge.
Existing law requires the Commission to issue a written order approving or
disapproving an application filed by a public utility to make any change in a
schedule not later than 210 days after the date on which the application is filed.
(NRS 704.110) Section 2 of this b ill requires the Commission, for an application
filed by certain electric utilities, to issue such a written order not later than 300 days
after the date on which the application is filed.
EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.
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
thereto the provisions set forth as sections 1.3 and 1.7 of this act.
Sec. 1.3. 1. The Commission shall open one or more
investigatory dockets to:
(a) Examine how costs for purchased fuel and purchased
power are currently passed through to customers.
(b) Examine the use of carrying charges on deferred energy
accounting and balances.
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(c) Identify opportunities to mitigate the impact on customer
rates which are associated with fluctuations in the market for
purchased fuel and purchased power or other unpredictable events
which affect customer rates.
(d) Consider elements of a potential cost-sharing adjustment
mechanism for purchased fuel and purchased power which is
designed to align the financial incentives of an electric utility with
the interest of the customers of the electric utility , including,
without limitation:
(1) A cost -sharing percentage that is high enough to
incentivize the electric utility to keep the costs of purchased fuel
and purchased power low, but not low enough that the electric
utility is exposed to unreasonable levels of risk and volatility.
(2) Whether a cost -sharing adju stment mechanism is
symmetrical or asymmetrical.
(3) Whether to use a straight -sharing method or a sharing -
band method.
(4) Whether to use a forecasted estimate of costs or historic
information concerning costs.
(5) Options to improve the transparenc y of any forecasted
estimate of costs, including the use of a forward price index and
providing access to forecasted estimates to interveners in
proceedings of the Commission who sign nondisclosure
agreements.
(6) Implications of the inclusion of costs for purchased fuel
and purchased power on the participation of an electric utility in
real time and day-ahead markets.
(e) Examine existing practices and evaluate options that
reduce load and mitigate volatility in the cost of natural gas,
including, without limitation, demand-side management programs
which are cost effective, demand response and load shifting.
2. Before the submission of the report required by subsection
3, the Commission shall submit periodic reports on the progress of
each investigatory docket opened pursuant to subsection 1 to the
Director of the Legislative Counsel Bureau for transmittal to the
Joint Interim Standing Committee on Growth and Infrastructure.
3. On or before July 1, 2026, the Commission shall submit a
report on the out comes of each investigatory docket opened
pursuant to subsection 1, including, without limitation, the status
of any regulations adopted or considered as a result of the
investigatory docket, to the Director of the Legislative Counsel
Bureau for transmittal to the Legislative Commission.
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4. If the Commission finds it is in the public interest, as a
result of the investigatory docket opened pursuant to subsection 1,
the Commission may adopt regulations to establish a cost -sharing
adjustment mechanism.
5. As used in this section:
(a) “Cost-sharing adjustment mechanism” means a
mechanism that shares the risk of purchased fuel and purchased
power costs between an electric utility and its customers.
(b) “Electric utility” has the meaning ascribed to it i n
NRS 704.187.
Sec. 1.7. Notwithstanding any other provision of law, if the
Commission determines that a utility has charged a customer
more than any applicable rate or tariff allows, the utility shall
refund to the customer, with interest, the full amo unt of any
overcharge.
Sec. 2. NRS 704.110 is hereby amended to read as follows:
704.110 Except as otherwise provided in NRS 704.075,
704.68861 to 704.68887, inclusive, and 704.7865, or as may
otherwise be provided by the Commission pursuant to NRS
704.095, 704.097 or 704.7621:
1. If a public utility files with the Commission an application to
make changes in any schedule, including, without limitation,
changes that will result in a discontinuance, modification or
restriction of service, the Commission shall investigate the propriety
of the proposed changes to determine whether to approve or
disapprove the proposed changes. If an electric utility files such an
application and the application is a general rate application or an
annual deferred energy accounting adjustment application, the
Consumer’s Advocate shall be deemed a party of record.
2. Except as otherwise provided in this subsection and
subsection 3, if a public utility files with the Commission an
application to make changes in any schedule, the Commission shall,
not later than 210 days after the date on which the application is
filed, issue a written order approving or disapproving, in whole or in
part, the proposed changes. If the public utility is an electric utility,
the Commissi on shall, not later than 300 days after the date on
which the application is filed, issue a written order approving or
disapproving, in whole or in part, the proposed changes.
3. If a public utility files with the Commission a general rate
application, t he public utility shall submit with its application a
statement showing the recorded results of revenues, expenses,
investments and costs of capital for its most recent 12 months for
which data were available when the application was prepared.
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Except as ot herwise provided in subsection 4, in determining
whether to approve or disapprove any increased rates, the
Commission shall consider evidence in support of the increased
rates based upon actual recorded results of operations for the same
12 months, adjuste d for increased revenues, any increased
investment in facilities, increased expenses for depreciation, certain
other operating expenses as approved by the Commission and
changes in the costs of securities which are known and are
measurable with reasonable accuracy at the time of filing and which
will become effective within 6 months after the last month of those
12 months, but the public utility shall not place into effect any
increased rates until the changes have been experienced and
certified by the publ ic utility to the Commission and the
Commission has approved the increased rates. The Commission
shall also consider evidence supporting expenses for depreciation,
calculated on an annual basis, applicable to major components of the
public utility’s plant placed into service during the recorded test
period or the period for certification as set forth in the application.
Adjustments to revenues, operating expenses and costs of securities
must be calculated on an annual basis. Within 90 days after the date
on which the certification required by this subsection is filed with
the Commission, or within the period set forth in subsection 2,
whichever time is longer, the Commission shall make such order in
reference to the increased rates as is required by this cha pter. The
following public utilities shall each file a general rate application
pursuant to this subsection based on the following schedule:
(a) An electric utility that primarily serves less densely
populated counties shall file a general rate application:
(1) Not later than 5 p.m. on or before the first Monday in
June 2019; and
(2) At least once every 36 months thereafter or on a date
specified in an alternative rate -making plan approved by the
Commission pursuant to NRS 704.7621.
(b) An electric ut ility that primarily serves densely populated
counties shall file a general rate application:
(1) Not later than 5 p.m. on or before the first Monday in
June 2020; and
(2) At least once every 36 months thereafter or on a date
specified in an alternativ e rate -making plan approved by the
Commission pursuant to NRS 704.7621.
(c) A public utility that furnishes water for municipal, industrial
or domestic purposes or services for the disposal of sewage, or both,
which had an annual gross operating revenue of $2,000,000 or more
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for at least 1 year during the immediately preceding 3 years and
which had not filed a general rate application with the Commission
on or after July 1, 2005, shall file a general rate application on or
before June 30, 2008, and at leas t once every 36 months thereafter
unless waived by the Commission pursuant to standards adopted by
regulation of the Commission. If a public utility furnishes both
water and services for the disposal of sewage, its annual gross
operating revenue for each service must be considered separately for
determining whether the public utility meets the requirements of this
paragraph for either service.
(d) A public utility that furnishes water for municipal, industrial
or domestic purposes or services for the disposal of sewage, or both,
which had an annual gross operating revenue of $2,000,000 or more
for at least 1 year during the immediately preceding 3 years and
which had filed a general rate application with the Commission on
or after July 1, 2005, shall file a general rate application on or before
June 30, 2009, and at least once every 36 months thereafter unless
waived by the Commission pursuant to standards adopted by
regulation of the Commission. If a public utility furnishes both
water and services for the disposal of sewage, its annual gross
operating revenue for each service must be considered separately for
determining whether the public utility meets the requirements of this
paragraph for either service.
The Commission shall adopt regulations setting forth standards
for waivers pursuant to paragraphs (c) and (d) and for including the
costs incurred by the public utility in preparing and presenting the
general rate application before the effective date of any change in
rates.
4. In addition to submitting the statement required pursuant to
subsection 3, a public utility may submit with its general rate
application a statement showing the effects, on an annualized basis,
of all expected changes in circumsta nces. If such a statement is
filed, it must include all increases and decreases in revenue and
expenses which may occur within 210 days after the date on which
its general rate application is filed with the Commission if such
expected changes in circumstan ces are reasonably known and are
measurable with reasonable accuracy. If a public utility submits
such a statement, the public utility has the burden of proving that the
expected changes in circumstances set forth in the statement are
reasonably known and are measurable with reasonable accuracy.
The Commission shall consider expected changes in circumstances
to be reasonably known and measurable with reasonable accuracy if
the expected changes in circumstances consist of specific and
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identifiable events or programs rather than general trends, patterns
or developments, have an objectively high probability of occurring
to the degree, in the amount and at the time expected, are primarily
measurable by recorded or verifiable revenues and expenses and are
easily and objectively calculated, with the calculation of the
expected changes relying only secondarily on estimates, forecasts,
projections or budgets. If the Commission determines that the public
utility has met its burden of proof:
(a) The Commission shall c onsider the statement submitted
pursuant to this subsection and evidence relevant to the statement,
including all reasonable projected or forecasted offsets in revenue
and expenses that are directly attributable to or associated with the
expected changes i n circumstances under consideration, in addition
to the statement required pursuant to subsection 3 as evidence in
establishing just and reasonable rates for the public utility; and
(b) The public utility is not required to file with the Commission
the ce rtification that would otherwise be required pursuant to
subsection 3.
5. If a public utility files with the Commission an application to
make changes in any schedule and the Commission does not issue a
final written order regarding the proposed changes within the time
required by this section, the proposed changes shall be deemed to be
approved by the Commission.
6. If a public utility files with the Commission a general rate
application, the public utility, or a public utility affiliated with the
public utility through common ownership, shall not file with the
Commission another general rate application until all pending
general rate applications filed by that public utility have been
decided by the Commission unless, after application and hearing,
the Commission determines that a substantial financial emergency
would exist if the public utility or its affiliate is not permitted to file
another general rate application sooner. The provisions of this
subsection do not prohibit a public utility from filin g with the
Commission, while a general rate application is pending, an
application to recover the increased cost of purchased fuel,
purchased power, or natural gas purchased for resale pursuant to
subsection 7, a quarterly rate adjustment pursuant to subse ction 8 or
10, any information relating to deferred accounting requirements
pursuant to NRS 704.185 or an annual deferred energy accounting
adjustment application pursuant to NRS 704.187, if the public utility
is otherwise authorized to so file by those provisions.
7. A public utility may file an application to recover the
increased cost of purchased fuel, purchased power, or natural gas
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purchased for resale once every 30 days. The provisions of this
subsection do not apply to:
(a) An electric utility wh ich is required to adjust its rates on a
quarterly basis pursuant to subsection 10; or
(b) A public utility which purchases natural gas for resale and
which adjusts its rates on a quarterly basis pursuant to subsection 8.
8. A public utility which purchases natural gas for resale must
request approval from the Commission to adjust its rates on a
quarterly basis between annual rate adjustment applications based
on changes in the public utility’s recorded costs of natural gas
purchased for resale. A p ublic utility which purchases natural gas
for resale and which adjusts its rates on a quarterly basis may
request approval from the Commission to make quarterly
adjustments to its deferred energy accounting adjustment. The
Commission shall approve or deny such a request not later than 120
days after the application is filed with the Commission. The
Commission may approve the request if the Commission finds that
approval of the request is in the public interest. If the Commission
approves a request to make q uarterly adjustments to the deferred
energy accounting adjustment of a public utility pursuant to this
subsection, any quarterly adjustment to the deferred energy
accounting adjustment must not exceed 2.5 cents per therm of
natural gas. If the balance of t he public utility’s deferred account
varies by less than 5 percent from the public utility’s annual
recorded costs of natural gas which are used to calculate quarterly
rate adjustments, the deferred energy accounting adjustment must be
set to zero cents per therm of natural gas.
9. If the Commission approves a request to make any rate
adjustments on a quarterly basis pursuant to subsection 8:
(a) The public utility shall file written notice with the
Commission before the public utility makes a quarterly rate
adjustment. A quarterly rate adjustment is not subject to the
requirements for notice and a hearing pursuant to NRS 703.320 or
the requirements for a consumer session pursuant to subsection 1 of
NRS 704.069.
(b) The public utility shall provide writt en notice of each
quarterly rate adjustment to its customers by including the written
notice with a customer’s regular monthly bill or by electronic
transmission pursuant to NRS 704.188. The public utility shall
begin providing such written notice to its customers not later than 30
days after the date on which the public utility files its written notice
with the Commission pursuant to paragraph (a). The written notice
required by this paragraph:
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(1) Must be printed separately, if included with the
customer’s regular monthly bill, or the subject line of the electronic
transmission must indicate that notice of a quarterly rate adjustment
is included, if provided by electronic transmission pursuant to NRS
704.188; and
(2) Must include the following in clear and bold text:
(I) The total amount of the increase or decrease in the
public utility’s revenues from the rate adjustment, stated in dollars
and as a percentage;
(II) The amount of the monthly increase or decrease in
charges for each class of custo mer or class of service, stated in
dollars and as a percentage;
(III) A statement that customers may send written
comments or protests regarding the rate adjustment to the
Commission;
(IV) A statement that the transactions and recorded costs
of natural gas which are the basis for any quarterly rate adjustment
will be reviewed for reasonableness and prudence in the next
proceeding held by the Commission to review the annual rate
adjustment application pursuant to paragraph (d); and
(V) Any other information required by the Commission.
(c) The public utility shall file an annual rate adjustment
application with the Commission. The annual rate adjustment
application is subject to the requirements for notice and a hearing
pursuant to NRS 703.320 and the requirements for a consumer
session pursuant to subsection 1 of NRS 704.069.
(d) The proceeding regarding the annual rate adjustment
application must include a review of each quarterly rate adjustment
and the transactions and recorded costs of natura l gas included in
each quarterly filing and the annual rate adjustment application.
There is no presumption of reasonableness or prudence for any
quarterly rate adjustment or for any transactions or recorded costs of
natural gas included in any quarterly r ate adjustment or the annual
rate adjustment application, and the public utility has the burden of
proving reasonableness and prudence in the proceeding.
(e) The Commission shall not allow the public utility to recover
any recorded costs of natural gas wh ich were the result of any
practice or transaction that was unreasonable or was undertaken,
managed or performed imprudently by the public utility, and the
Commission shall order the public utility to adjust its rates if the
Commission determines that any recorded costs of natural gas
included in any quarterly rate adjustment or the annual rate
adjustment application were not reasonable or prudent.
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10. An electric utility shall adjust its rates on a quarterly basis
based on changes in the electric utility’s recorded costs of purchased
fuel or purchased power. In addition to adjusting its rates on a
quarterly basis, an electric utility may request approval from the
Commission to make quarterly adjustments to its deferred energy
accounting adjustment. The Commission shall approve or deny such
a request not later than 120 days after the application is filed with
the Commission. The Commission may approve the request if the
Commission finds that approval of the request is in the public
interest. If the Commissi on approves a request to make quarterly
adjustments to the deferred energy accounting adjustment of an
electric utility pursuant to this subsection, any quarterly adjustment
to the deferred energy accounting adjustment must not exceed 0.25
cents per kilowa tt-hour of electricity. If the balance of the electric
utility’s deferred account varies by less than 5 percent from the
electric utility’s annual recorded costs for purchased fuel or
purchased power which are used to calculate quarterly rate
adjustments, the deferred energy accounting adjustment must be set
to zero cents per kilowatt-hour of electricity.
11. A quarterly rate adjustment filed pursuant to subsection 10
is subject to the following requirements:
(a) The electric utility shall file written n otice with the
Commission on or before August 15, 2007, and every quarter
thereafter of the quarterly rate adjustment to be made by the electric
utility for the following quarter. The first quarterly rate adjustment
by the electric utility will take effect on October 1, 2007, and each
subsequent quarterly rate adjustment will take effect every quarter
thereafter. The first quarterly adjustment to a deferred energy
accounting adjustment must be made pursuant to an order issued by
the Commission approving the application of an electric utility to
make quarterly adjustments to its deferred energy accounting
adjustment. A quarterly rate adjustment is not subject to the
requirements for notice and a hearing pursuant to NRS 703.320 or
the requirements for a consumer session pursuant to subsection 1 of
NRS 704.069.
(b) The electric utility shall provide written notice of each
quarterly rate adjustment to its customers by including the written
notice with a customer’s regular monthly bill or by electronic
submission pursuant to NRS 704.188. The electric utility shall begin
providing such written notice to its customers not later than 30 days
after the date on which the electric utility files a written notice with
the Commission pursuant to paragraph (a). The written notice
required by this paragraph:
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(1) Must be printed separately, if included with the
customer’s regular monthly bill, or the subject line of the electronic
transmission must indicate that notice of a quarterly rate adjustment
is included, if provided by electronic transmission pursuant to NRS
704.188; and
(2) Must include the following in clear and bold text:
(I) The total amount of the increase or decrease in the
electric utility’s revenues from the rate adjustment, stated in dollars
and as a percentage;
(II) The amount of the monthly increase or decrease in
charges for each class of customer or class of service, stated in
dollars and as a percentage;
(III) A statement that customers may send written
comments or protests regarding the rate a djustment to the
Commission;
(IV) A statement that the transactions and recorded costs
of purchased fuel or purchased power which are the basis for any
quarterly rate adjustment will be reviewed for reasonableness and
prudence in the next proceeding hel d by the Commission to review
the annual deferred energy accounting adjustment application
pursuant to paragraph (d); and
(V) Any other information required by the Commission.
(c) The electric utility shall file an annual deferred energy
accounting adj ustment application pursuant to NRS 704.187 with
the Commission. The annual deferred energy accounting adjustment
application is subject to the requirements for notice and a hearing
pursuant to NRS 703.320 and the requirements for a consumer
session pursuant to subsection 1 of NRS 704.069.
(d) The proceeding regarding the annual deferred energy
accounting adjustment application must include a review of each
quarterly rate adjustment and the transactions and recorded costs of
purchased fuel and purchased power included in each quarterly
filing and the annual deferred energy accounting adjustment
application. There is no presumption of reasonableness or prudence
for any quarterly rate adjustment or for any transactions or recorded
costs of purchased fuel an d purchased power included in any
quarterly rate adjustment or the annual deferred energy accounting
adjustment application, and the electric utility has the burden of
proving reasonableness and prudence in the proceeding.
(e) The Commission shall not allow the electric utility to recover
any recorded costs of purchased fuel and purchased power which
were the result of any practice or transaction that was unreasonable
or was undertaken, managed or performed imprudently by the
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electric utility, and the Commission shall order the electric utility to
adjust its rates if the Commission determines that any recorded costs
of purchased fuel and purchased power included in any quarterly
rate adjustment or the annual deferred energy accounting adjustment
application were not reasonable or prudent.
12. If an electric utility files an annual deferred energy
accounting adjustment application pursuant to subsection 11 and
NRS 704.187 while a general rate application is pending, the
electric utility shall:
(a) Submit with its annual deferred energy accounting
adjustment application information relating to the cost of service
and rate design; and
(b) Supplement its general rate application with the same
information, if such information was not submitted with the genera l
rate application.
13. A utility facility identified in a 3 -year plan submitted
pursuant to NRS 704.741 and accepted by the Commission for
acquisition or construction pursuant to NRS 704.751 and the
regulations adopted pursuant thereto, or the retiremen t or
elimination of a utility facility identified in an emissions reduction
and capacity replacement plan submitted pursuant to NRS 704.7316
and accepted by the Commission for retirement or elimination
pursuant to NRS 704.751 and the regulations adopted pu rsuant
thereto, shall be deemed to be a prudent investment. The utility may
recover all just and reasonable costs of planning and constructing, or
retiring or eliminating, as applicable, such a facility. For the
purposes of this subsection, a plan or an am endment to a plan shall
be deemed to be accepted by the Commission only as to that portion
of the plan or amendment accepted as filed or modified with the
consent of the utility pursuant to NRS 704.751.
14. In regard to any rate or schedule approved or d isapproved
pursuant to this section, the Commission may, after a hearing:
(a) Upon the request of the utility, approve a new rate but delay
the implementation of that new rate:
(1) Until a date determined by the Commission; and
(2) Under conditions as determined by the Commission,
including, without limitation, a requirement that interest charges be
included in the collection of the new rate; and
(b) Authorize a utility to implement a reduced rate for low -
income residential customers.
15. The Commis sion may, upon request and for good cause
shown, permit a public utility which purchases natural gas for resale
or an electric utility to make a quarterly adjustment to its deferred
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energy accounting adjustment in excess of the maximum allowable
adjustment pursuant to subsection 8 or 10.
16. A public utility which purchases natural gas for resale or an
electric utility that makes quarterly adjustments to its deferred
energy accounting adjustment pursuant to subsection 8 or 10 may
submit to the Commission for approval an application to discontinue
making quarterly adjustments to its deferred energy accounting
adjustment and to subsequently make annual adjustments to its
deferred energy accounting adjustment. The Commission may
approve an application submitt ed pursuant to this subsection if the
Commission finds that approval of the application is in the public
interest.
17. As used in this section:
(a) “Deferred energy accounting adjustment” means the rate of a
public utility which purchases natural gas fo r resale or an electric
utility that is calculated by dividing the balance of a deferred
account during a specified period by the total therms or kilowatt -
hours which have been sold in the geographical area to which the
rate applies during the specified period, not including kilowatt-hours
sold pursuant to an expanded solar access program established
pursuant to NRS 704.7865.
(b) “Electric utility” has the meaning ascribed to it in
NRS 704.187.
(c) “Electric utility that primarily serves densely populate d
counties” means an electric utility that, with regard to the provision
of electric service, derives more of its annual gross operating
revenue in this State from customers located in counties whose
population is 700,000 or more than it does from customer s located
in counties whose population is less than 700,000.
(d) “Electric utility that primarily serves less densely populated
counties” means an electric utility that, with regard to the provision
of electric service, derives more of its annual gross operating
revenue in this State from customers located in counties whose
population is less than 700,000 than it does from customers located
in counties whose population is 700,000 or more.
Secs. 3-6. (Deleted by amendment.)
Sec. 7. This act becomes effective on July 1, 2025.
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