Revises provisions relating to public utilities. (BDR 58-1106)

- 83rd Session (2025)
Senate Bill No. 417–Committee on
Growth and Infrastructure

CHAPTER..........

AN ACT relating to public 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 submiss ion and approval of such an
alternative rate -making plan; revising certain provisions
relating to the application and approval for an alternative
rate-making plan by an electric utility; 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
a general rate schedule by applying to Public Utilities Commission of Nevada.
(NRS 704.100, 704.110) Section 11 of this bill requires the Commission to adopt
regulations establishing procedures for a natural gas utility to apply to the
Commission for the approval of an alternative rate -making plan, which establishes
the alternative rate -making mechanisms that the n atural gas utility is authorized to
use to set rates during the time period of the plan. The regulations adopted by the
Commission must: (1) establish the alternative rate -making mechanisms that may
be included in a plan and any limitations on such alterna tive rate -making
mechanisms; (2) prescribe the information that must be included in an alternative
rate-making plan and an application for the approval of such a plan; (3) specify the
circumstances under which a natural gas utility for which an alternative rate-
making plan has been approved must file a general rate application; (4) provide a
process to educate customers of a natural gas utility regarding alternative rate -
making mechanisms; (5) require a natural gas utility for which an alternative rate -
making plan has been approved to keep certain records; and (6) establish criteria for
the evaluation of an alternative rate -making plan. Additionally, section 11 requires
that, if a natural gas utility files an application for an alternative rate -making plan
that includes formula rates or a multi -year rate plan, the alternative rate -making
plan must include: (1) an earnings -sharing mechanism; and (2) certain information
and calculations relating to changes in risk to the natural gas utility.
Section 12 of this bill authorizes a natural gas utility to submit an application to
establish an alternative rate-making plan pursuant to the regulations adopted by the
Commission, establishes time limits for the Commission to approve or deny such
an application and requi res the Commission to conduct a consumer session in each
major geographic area in which the natural gas utility provides services before
taking action on such an application. Section 12 requires an application for the
approval of an alternative rate -making plan to include a plan to educate the
customers of the natural gas utility regarding the alternative rate -making
mechanisms in the plan proposed by the utility. Section 12 prohibits the
Commission from approving an alternative rate -making plan unless the
Commission determines that the plan meets certain requirements. Section 12 also
authorizes an alternative rate -making plan to include certain provisions, including,
without limitation, a mechanism for earnings -sharing with the customers of the
utility. Additionally, section 12 authorizes a natural gas utility to reject an
application for an alternative rate-making plan with modifications approved by the

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Commission. Finally, section 12 authorizes the Commission to investigate and
change rates, tolls, charges , rules, regulations, practices and services relating to an
alternative rate -making plan under certain circumstances. Section 13 of this bill
provides that the provisions of this bill do not limit the existing rate -making
authority of the Commission.
Sections 3-10 of this bill define certain terms relating to alternative rate-making
plans.
Sections 14 and 15 of this bill create exceptions from the procedure set forth in
existing law to change a general rate schedule to authorize a natural gas utility
to file an application to establish an alternative rate -making plan pursuant to
section 12.
Existing law requires the Commission to adopt regulations to establish
procedures for an electric utility to apply to the Commission for the approval of an
alternative rate-making plan. (NRS 704.762) Section 16 of this bill requires that, if
an electric utility files an application for an alternative rate -making plan that
includes formula rates or a multi -year rate plan, the alternative rate -making plan
must include: (1) an earnings -sharing mechanism; and (2) certain information and
calculations relating to changes in risk to the electric utility.
Existing law authorizes an electric utility to apply to the Commissi on to
establish an alternative rate-making plan and sets forth certain requirements relating
to the approval of the plan by the Commission. (NRS 704.7621) Section 17 of this
bill requires that, if the Commission approves an application for an alternative r ate-
making plan that authorizes the recovery of the costs of a capital expenditure: (1)
the electric utility must prove the capital expenditure was prudent; and (2) if the
Commission determines that the electric utility did not prove the capital
expenditure was prudent, the Commission shall require the electric utility to refund
the costs of the capital expenditure charged to the customers of the electric utility.

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 2 to 13, inclusive, of this
act.
Sec. 2. As used in sections 2 to 13, inclusive, of this act,
unless the context otherwise requires, the words and terms defined
in sections 3 to 10, inclusive, of this act have the meanings
ascribed to them in those sections.
Sec. 3. “Alternative rate-making mechanism” means a rate -
making mechanism in an alternative rate -making plan and
includes, without limitation, performance -based rates, formula
rates, multi -year rate plans, an earnings -sharing mechanism,
decoupling mechanism or any other rate -making mecha nism
authorized by the Commission by regulation.
Sec. 4. “Alternative rate -making plan” means a plan that
would implement one or more alternative rate -making

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mechanisms to be used in addition to or in place of the rate -
making process established by NRS 704.110.
Sec. 5. “Decoupling mechanism” means a mechanism that
disassociates a natural gas utility’s financial performance and
results from the sales of natural gas by the natural gas utility.
Sec. 6. “Earnings-sharing mechanism” means a mechanism
designed by the Commission that requires a natural gas utility to
share earnings with its customers.
Sec. 7. “Formula rates” means rat es that are periodically
adjusted based on a predetermined formula approved by the
Commission without the need for a natural gas utility to file a
general rate application pursuant to NRS 704.110.
Sec. 8. “Multi-year rate plan” means a rate mechanism
under which the Commission sets rates and revenue requirements
for a multi -year plan period of more than 36 months, including,
without limitation, a plan which authorizes periodic changes in
rates, including, without limitation , adjustments to account for
inflation or capital investments, without a general rate application.
Sec. 9. “Natural gas utility” means a public utility which
purchases natural gas for resale.
Sec. 10. “Performance-based rates” means rates that are set
or adjusted based on the performance of a natural gas utility, as
determined by such performance metrics as the Commission may
establish.
Sec. 11. 1. The Commis sion shall adopt regulations to
establish procedures for a natural gas utility to apply to the
Commission for the approval of an alternative rate -making plan.
The regulations must:
(a) Establish the alternative rate-making mechanisms that may
be included in such a plan and any limitations on such alternative
rate-making mechanisms as the Commission deems appropriate,
including, without limitation, any restrictions on the types of
alternative rate-making mechanisms that may be used in concert
within the same alternative rate-making plan.
(b) Prescribe the information that must be included in an
alternative rate -making plan and an application submitted in
accordance with the regulations adopted pursuant to this section.
(c) Specify the circumstances under which a natural gas utility
for which the Commission has approved an alternative rate -
making plan is required to file a general rate application pursuant
to NRS 704.110, including, without limitation, if the alternative
rate-making plan ceases to meet th e criteria established by the

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Commission pursuant to paragraph (g) or after any period of time
established by regulation of the Commission.
(d) Provide a process to educate customers of a natural gas
utility regarding the available alternative rate-making mechanisms
that may be included in an alternative rate-making plan.
(e) Establish requirements for a natural gas utility for which
the Commission has approved an alternative rate -making plan to
keep or cause to be kept any information and records which t he
natural gas utility would have been required to submit to the
Commission as part of an application filed pursuant to NRS
704.110 or 704.185, if the filing of any such application is delayed
or excused pursuant to the alternative rate-making plan.
(f) If the Commission determines that it is practicable, require
a natural gas utility to include in its application for the approval of
an alternative rate-making plan:
(1) One or more cost-of-service studies; and
(2) An analysis estimating and comparing:
(I) The rates that would be charged and the revenue that
would be collected under the alternative rate -making plan
proposed in the application; and
(II) The rates that would be charged and the revenue
that would be collected pursuant to the rate-making process
established by NRS 704.110.
(g) Establish the criteria for the evaluation of an alternative
rate-making plan for a natural gas utility which may include,
without limitation, whether the plan:
(1) Provides for just and reasonable rates that are
comparable to rates established pursuant to NRS 704.110;
(2) Ensures that customers of a natural gas utility benefit
from lower regulatory administrative costs where appropriate;
(3) Aligns an economically viable utility model with state
public policy goals;
(4) Enables the delivery of natural gas service and options
for service and pricing that customers of a natural gas utility
value, including, without limitation, the develop ment and use of
low carbon fuels by customers that prioritize such an option over
other factors, including price;
(5) Fosters statewid e improvements to the economic and
operational efficiency of the natural gas infrastructure system;
(6) Furthers the p ublic interest, including, without
limitation, the promotion of safe, economic, efficient and reliable
service to all customers of the natural gas utility;

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(7) Enhances the resilience and security of the natural gas
infrastructure system while addressing concerns relating to
customer privacy;
(8) Facilitates the research and development of innovative
natural gas services and options to benefit customers; and
(9) Balances the interests of customers and shareholders by
providing services customers want while preserving reasonable
shareholder value.
2. In addition to any requirement adopted by regulation of
the Commission pursuant to subsection 1, if a natural gas utility
files an application for an alternative rate -making plan that
includes formula rates or a multi -year rate plan, the alternative
rate-making plan must include, without limitation:
(a) An earnings-sharing mechanism; and
(b) A discussion identifying any changes in risk to the natural
gas utility and a calculation to adjust the rate of return of the
natural gas utility based on the changes in risk to the natural gas
utility, which must demonstrate the impact of the changes on the
rates charged to customers of the natural gas utility.
3. The Commission is not required to ac cept applications to
establish an alternative rate -making plan if the Commission
determines, after a reasonable investigation, that the use of an
alternative rate -making plan is not consistent with the criteria
established by the Commission pursuant to par agraph (g) of
subsection 1.
Sec. 12. 1. Except as otherwise provided in subsection 3 of
section 11 of this act and in accordance with the regulations
adopted by the Commission pursuant to section 11 of this act, not
earlier than the date on which the Commission first adopts
regulations pursuant to section 11 of this act, a natural gas utility
may apply to the Commission to establish an alternative
rate-making plan which sets forth the alternative rate -making
mechanisms to be used to establish rates during the time period
covered by the plan.
2. A natural gas utility may file an application pursuant to
subsection 1:
(a) At the same time the natural gas utility files a general rate
application pursuant to NRS 704.110; or
(b) Not later than 6 months after the date o n which the
Commission issues an order approving a general rate application
filed by the natural gas utility pursuant to NRS 704.110.
3. The Commission shall approve, with or without
modifications, or deny an a pplication submitted pursuant to

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subsection 1 not later than 210 days after the Commission receives
a copy of the application unless the Commission, upon good
cause, extends by not more than 90 days the time to act upon the
application. If the Commission f ails to act upon an application
within the time provided by this subsection, the application shall
be deemed to be denied.
4. The Commission shall conduct a consumer session
pursuant to NRS 704.069 in each major geographic area in which
the natural gas u tility provides services to solicit comments from
the public before taking action on an application submitted
pursuant to subsection 1.
5. The Commission shall not approve an application
submitted pursuant to subsection 1 unless the Commission
determines that the plan:
(a) Is in the public interest;
(b) Results in just and reasonable rates, as determined by the
Commission;
(c) Protects the interests of the customers of the natural gas
utility;
(d) Satisfies the criteria established by the Co mmission
pursuant to paragraph (g) of subsection 1 of section 11 of this act;
(e) Specifies the time period to which the plan applies; and
(f) Includes a plan for educating the customers of the natural
gas utility regarding the alternative rate -making mechanisms
included in the plan.
6. An alternative rate -making plan may include, without
limitation:
(a) An earnings-sharing mechanism that balances the interests
of customers that purchase natural gas for consumption in this
State and the shareholders of the natural gas utility; and
(b) Any other term or condition proposed by a natural gas
utility or any party participating in the proceeding or that the
Commission finds is reasonable and serves the public interest.
7. If the Commission approves an application for an
alternative rate -making plan that authorizes the recovery of the
costs of a capital expenditure:
(a) The natural gas utility must prove that the capital
expenditure was prudent at the time the natural gas utility files a
general rate application pursuant to NRS 704.110 or at any time
established by regulation of the Commission; and
(b) If the Commission determines during a general rate case
proceeding conducted pursuant to NRS 704.110 that the natural
gas utility did not prove that th e capital expenditure was prudent,

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the Commission shall require the natural gas utility to refund the
customers of the natural gas utility the amount previously
recovered through charges to customers of the natural gas utility
for the costs of the capital expenditure.
8. If the Commission approves an application for an
alternative rate -making plan with modifications pursuant to
subsection 3 , the natural gas utility may accept or reject the
modified alternative rate -making plan by filing a notice with
the Commission not later than 30 days after the date on which the
Commission issues an order approving the application. If a
natural gas utility files a notice to reject the modified alternative
rate-making plan, the alternative rate -making plan shall be
deemed withdrawn and:
(a) If a general rate application was filed at the same time as
the application for the alternative rate -making plan and the
general rate application or any portion thereof was approved, the
rates approved in the general rate applicat ion shall be deemed in
effect. To the extent that a portion of a general rate application is
approved, the rates that were in effect before the portion of the
general rate application was approved by the Commission remain
in effect for any portion of the g eneral rate application not
approved by the Commission until changed or modified by the
Commission.
(b) If a general rate application was not filed at the same time
as the application for the alternative rate -making plan, the rates
that were in effect bef ore the modified alternative rate -making
plan was approved remain in effect until changed or modified by
the Commission.
9. The Commission may at any time, upon its own motion or
after receiving a complaint from any customer, the Consumer’s
Advocate or t he Regulatory Operations Staff of the Commission,
investigate any of the rates, tolls, charges, rules, regulations,
practices and services relating to the alternative rate -making plan,
and, after a full hearing as provided in NRS 704.120, by order,
make su ch changes as may be just and reasonable to the same
extent as authorized by NRS 704.120.
Sec. 13. The provisions of sections 2 to 12, inclusive, of this
act must not be construed to limit the existing rate -making
authority of the Commission.
Sec. 14. NRS 704.100 is hereby amended to read as follows:
704.100 1. Except as otherwise provided in NRS 704.075,
704.68861 to 704.68887, inclusive, 704.7865 and 704.7867, or as

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may otherwise be prov ided by the Commission pursuant to NRS
704.095, 704.097 or 704.7621 [:] or section 12 of this act:
(a) A public utility shall not make changes in any schedule,
unless the public utility:
(1) Files with the Commission an application to make the
proposed changes and the Commission approves the proposed
changes pursuant to NRS 704.110; or
(2) Files the proposed changes with the Commission using a
letter of advice in accordance with the provisions of paragraph (f)
or (g).
(b) A public utility shall adjust its rates on a quarterly basis
between annual rate adjustment applications pursuant to subsection
8 of NRS 704.110 based on changes in the public utility’s recorded
costs of natural gas purchased for resale.
(c) An electric utility shall, between a nnual deferred energy
accounting adjustment applications filed pursuant to NRS 704.187,
adjust its rates on a quarterly basis pursuant to subsection 10 of
NRS 704.110.
(d) A public utility shall post copies of all proposed schedules
and all new or amende d schedules in the same offices and in
substantially the same form, manner and places as required by NRS
704.070 for the posting of copies of schedules that are currently in
force.
(e) A public utility may not set forth as justification for a rate
increase any items of expense or rate base that previously have been
considered and disallowed by the Commission, unless those items
are clearly identified in the application and new facts or
considerations of policy for each item are advanced in the
application to justify a reversal of the prior decision of the
Commission.
(f) Except as otherwise provided in paragraph (g), if the
proposed change in any schedule does not change any rate or will
result in an increase in annual gross operating revenue in an amount
that does not exceed $15,000:
(1) The public utility may file the proposed change with the
Commission using a letter of advice in lieu of filing an application;
and
(2) The Commission shall determine whether it should
dispense with a hearing regarding the proposed change.
 A letter of advice filed pursuant to this paragraph must include a
certification by the attorney for the public utility or an affidavit by
an authorized representative of the public utility that to the best of
the signatory’s knowled ge, information and belief, formed after a

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reasonable inquiry, the proposed change in schedule does not
change any rate or result in an increase in the annual gross operating
revenue of the public utility in an amount that exceeds $15,000.
(g) If the applicant is a small-scale provider of last resort and the
proposed change in any schedule will result in an increase in annual
gross operating revenue in an amount that does not exceed $50,000
or 10 percent of the applicant’s annual gross operating revenue,
whichever is less:
(1) The small -scale provider of last resort may file the
proposed change with the Commission using a letter of advice in
lieu of filing an application if the small-scale provider of last resort:
(I) Includes with the letter of advice a certification by the
attorney for the small -scale provider of last resort or an affidavit by
an authorized representative of the small-scale provider of last resort
that to the best of the signatory’s knowledge, information and belief,
formed after a re asonable inquiry, the proposed change in schedule
does not change any rate or result in an increase in the annual gross
operating revenue of the small -scale provider of last resort in an
amount that exceeds $50,000 or 10 percent, whichever is less;
(II) Demonstrates that the proposed change in schedule is
required by or directly related to a regulation or order of the Federal
Communications Commission; and
(III) Except as otherwise provided in subsection 2, files
the letter of advice not later than 5 years after the Commission has
issued a final order on a general rate application filed by the
applicant in accordance with subsection 3 of NRS 704.110; and
(2) The Commission shall determine whether it should
dispense with a hearing regarding the proposed change.
 Not later than 10 business days after the filing of a letter of
advice pursuant to subparagraph (1), the Regulatory Operations
Staff of the Commission or any other interested party may file with
the Commission a request that the Commission order an applicant to
file a general rate application in accordance with subsection 3 of
NRS 704.110. The Commission may hold a hearing to consider such
a request.
(h) In making the determination pursuant to paragraph (f) or (g),
the Commission shall first consider all timely written protests, any
presentation that the Regulatory Operations Staff of the Commission
may desire to present, the application of the public util ity and any
other matters deemed relevant by the Commission.
2. An applicant that is a small -scale provider of last resort may
submit to the Commission a written request for a waiver of the 5 -
year period specified in sub -subparagraph (III) of subparagrap h (1)

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of paragraph (g) of subsection 1. The Commission shall, not later
than 90 days after receipt of such a request, issue an order approving
or denying the request. The Commission may approve the request if
the applicant provides proof satisfactory to th e Commission that the
applicant is not earning more than the rate of return authorized by
the Commission and that it is in the public interest for the
Commission to grant the request for a waiver. The Commission
shall not approve a request for a waiver if the request is submitted
later than 7 years after the issuance by the Commission of a final
order on a general rate application filed by the applicant in
accordance with subsection 3 of NRS 704.110. If the Commission
approves a request for a waiver submitt ed pursuant to this
subsection, the applicant shall file the letter of advice pursuant to
subparagraph (1) of paragraph (g) of subsection 1 not earlier than
120 days after the date on which the applicant submitted the request
for a waiver pursuant to this subsection, unless the order issued by
the Commission approving the request for a waiver specifies a
different period for the filing of the letter of advice.
3. As used in this section, “electric utility” has the meaning
ascribed to it in NRS 704.187.
Sec. 15. 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 [:] or section 12 of this act:
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 appli cation 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 subsection 3, if a public
utility files with the Commission an application to make change s 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.
3. If a public utility files with the Commissio n a general rate
application, the public utility shall submit with its application a
statement showing the recorded results of revenues, expenses,

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investments and costs of capital for its most recent 12 months for
which data were available when the applica tion was prepared.
Except as otherwise 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, adjusted 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 experi enced and
certified by the public 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. W ithin 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 r ates as is required by this chapter. 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 utility 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 alternative rate -making plan approved by the
Commission pursuant to NRS 704.7621.

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(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
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 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 gr oss
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 s hall 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 circumstances. If such a s tatement 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 circumstances are reasonabl y 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 wi th reasonable accuracy.

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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
identifiable events or programs rather t han 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 c alculated, 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 consider the state ment 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 in circumstances u nder 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 certification 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 throug h 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 deter mines 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 filing 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 subsection 8 or
10, an y information relating to deferred accounting requirements
pursuant to NRS 704.185 or an annual deferred energy accounting

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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
purchased for resale once every 30 days. The provisions of this
subsection do not apply to:
(a) An electric utility which is required t o 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 public utility which pu rchases 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 lat er 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 quarterly adjustments t o 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 the public utility’s de ferred 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 qua rterly 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 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
transmission pursuant to NRS 704.188. The public utility shall

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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:
(1) Must be printed s eparately, 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 decre ase 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 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 tran sactions and recorded costs of natural 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 rate 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 which were the result of any
practice or transaction that was unreasonable or was undertaken,
managed or performed imprudently by the public utility, and the

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Commission shall order the public utility to adjust its rates i f 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.
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 Commission 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 kilowatt -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 c alculate 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 notice 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 i ssued 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 mon thly bill or by electronic
submission pursuant to NRS 704.188. The electric utility shall begin

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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 pu rsuant to paragraph (a). The written notice
required by this paragraph:
(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 adjus tment, 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 adjustment 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 an d
prudence in the next proceeding held 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 adjustment 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 requi rements 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 cos ts 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 and 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.

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(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
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 general
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 retirement 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 pursuant
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 amendment 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 disapproved
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

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- 83rd Session (2025)
(b) Authorize a utility to implement a reduced rate for low -
income residential customers.
15. The Commission 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
energy accounting adjustment in excess o f 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 o r 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 submitted 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 util ity which purchases natural gas for 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 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 700,000 or more than it does from customers 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, d erives 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.
Sec. 16. NRS 704.762 is hereby amended to read as follows:
704.762 1. The Commission shall adopt regulations to
establish procedures for an electric utility to apply to the

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- 83rd Session (2025)
Commission for the approval of an alternative rate -making plan.
The regulations must:
(a) Establish the alternative rate -making mechanisms that may
be included in such a plan and any limitations on such alternative
rate-making mechanisms as the Commission deems appropriate,
including, without limitation, any restrictions on the types of
alternative rate -making mechanisms that may be used in concert
within the same alternative rate-making plan.
(b) Provide the information that must be included in an
alternative rate-making plan and an application submitted pursuant
to the regulations adopted pursuant to this section.
(c) Specify the circumstances under which an electric utility for
which the Commission has approved an alternative rate-making plan
is required to file a general rate application pursuant to NRS
704.110 including, without limitation, if the alternative rate -making
plan ceases to meet the criteria established by the Commission
pursuant to paragraph (g).
(d) Provide a process to educate customers of an electric utility
regarding the available alternative rate -making mechani sms that
may be included in an alternative rate-making plan.
(e) Establish requirements for an electric utility for which the
Commission has approved an alternative rate -making plan to keep
or cause to be kept any information and records which the utility
would have been required to submit to the Commission as part of an
application pursuant to NRS 704.110 or 704.187, if the filing of any
such application is delayed or excused pursuant to the alternative
rate-making plan.
(f) If the Commission determines that it is practicable, require
an electric utility to include in its application for the approval of an
alternative rate-making plan:
(1) One or more cost of service studies.
(2) An analysis estimating and comparing:
(I) The rates that would be cha rged and the revenue that
would be collected under the alternative rate -making plan proposed
in the application; and
(II) The rates that would be charged and the revenue that
would be collected pursuant to the rate -making process established
by NRS 704.110.
(g) Establish criteria for the evaluation of an alternative rate -
making plan which may include, without limitation, whether the
plan:
(1) Aligns an economically viable utility model with state
public policy goals.

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- 83rd Session (2025)
(2) Provides for just and reasonable rates that are comparable
to rates established pursuant to NRS 704.110.
(3) Enables the delivery of electric service and options for
services and pricing that customers value including, without
limitation, the development and the use of renewable re sources by
customers that prioritize such resources above other factors,
including price.
(4) Fosters statewide improvements to the economic and
operational efficiency of the electrical grid.
(5) Furthers the public interest including, without limitation,
the promotion of safe, economic, efficient and reliable electric
service to all customers of the electric utility.
(6) Enhances the resilience and security of the electrical grid
while addressing concerns regarding customer privacy.
(7) Ensures that customers of an electric utility benefit from
lower regulatory administrative costs where appropriate.
(8) Facilitates the research and development of innovative
electric utility services and options to benefit customers.
(9) Balances the int erests of customers and shareholders by
providing for services that customers want while preserving
reasonable shareholder value.
2. In addition to any requirement adopted by regulation of
the Commission pursuant to subsection 1, if an electric utility f iles
an application for an alternative rate -making plan that includes
formula rates or a multi -year rate plan, the alternative rate -
making plan must include, without limitation:
(a) An earnings-sharing mechanism; and
(b) A discussion identifying any chan ges in risk to the electric
utility and a calculation to adjust the rate of return of the electric
utility based on the changes in risk to the electric utility , which
must demonstrate the impact of the changes on the rates charged
to customers of the electric utility.
3. The Commission is not required to accept applications to
establish an alternative rate -making plan if the Commission
determines, after a reasonable investigation, that the use of an
alternative rate -making plan is not consistent with the criteria
established by the Commission pursuant to paragraph (g) of
subsection 1.
Sec. 17. NRS 704.7621 is hereby amended to read as follows:
704.7621 1. Except as otherwise provided in subsection [2] 3
of NRS 704.762, and in accordance with the regulations adopted by
the Commission pursuant to NRS 704.762:

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- 83rd Session (2025)
(a) Not sooner than the first Monday in January 2020, an electric
utility that primarily serves less densely populated counties may
apply to the Commission to establish an alternative rate-making plan
which sets forth the alternative rate -making mechanisms to be used
to establish rates during the time period covered by the plan.
(b) Not sooner than the first Monday in January 2021, an
electric utility that primarily serves densely populated counties may
apply to the Commission to establish an alternative rate-making plan
which sets forth the alternative rate -making mechanisms to be used
to establish rates during the time period covered by the plan.
2. The Commissio n shall approve, with or without
modifications, or deny an application submitted pursuant to
subsection 1 not later than 210 days after the Commission receives a
copy of the application unless the Commission, upon good cause,
extends by not more than 90 da ys the time to act upon the
application. If the Commission fails to act upon an application
within the time provided by this subsection, the application shall be
deemed to be denied.
3. The Commission shall conduct at least one consumer session
pursuant to NRS 704.069 to solicit comments from the public before
taking action on an application submitted pursuant to subsection 1.
4. The Commission shall not approve an application submitted
pursuant to subsection 1 unless the Commission determines that the
plan:
(a) Is in the public interest;
(b) Results in just and reasonable rates, as determined by the
Commission;
(c) Protects the interests of the customers of the electric utility;
(d) Satisfies the criteria established by the Commission pursuant
to paragraph (g) of subsection 1 of NRS 704.762;
(e) Specifies the time period to which the plan applies; and
(f) Includes a plan for educating the customers of the electric
utility regarding the alternative rate-making mechanisms included in
the plan.
5. An alternative rate -making plan may include, without
limitation:
(a) An earnings-sharing mechanism that balances the interests of
customers that purchase electricity for consumption in this State and
the shareholders of the electric utility.
(b) A term or condition waiving the requirement that the electric
utility file a general rate application every 36 months pursuant to
subsection 3 of NRS 704.110 or extending beyond 36 months the
time between required general rate application filings.

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- 83rd Session (2025)
(c) Any other term or condition proposed by an electric utility or
any party participating in the proceeding or that the Commission
finds is reasonable and serves the public interest.
6. If the Commission approves an application for an
alternative rate -making plan that authorizes the recovery of the
costs of a capital expenditure:
(a) The electric utility must prove that the capital expenditure
was prudent at the time the electric utility files a general rate
application pursuant to NRS 704.110 or at any time established by
regulation of the Commission; and
(b) If the Commission determines during a general rate case
proceeding conducted pursuant to NRS 704.110 that the electric
utility did not prove that the capital expenditure was prudent, the
Commission shall require the electric utility to refund the
customers of the electric utility the amount previously recovered
through charges to customers of the electric utility for the costs of
the capital expenditure.
7. The Commission may at any time, upon its own motion or
after receiving a complaint from any customer, the Consumer’s
Advocate or the Regulatory Operations Staff of the Commission,
investigate any of the rates, tolls, charges, rules, regulations,
practices and service relating to an alternative r ate-making plan,
and, after a full hearing as provided in NRS 704.120, by order, make
such changes as may be just and reasonable to the same extent as
authorized by NRS 704.120.
[7.] 8. As used in this section:
(a) “Electric utility that primarily serve s densely populated
counties” has the meaning ascribed to it in NRS 704.110.
(b) “Electric utility that primarily serves less densely populated
counties” has the meaning ascribed to it in NRS 704.110.

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