AARP Helps Prevent Major Energy Price Hikes for Nevadans
Northern Nevada residents will avoid a 175 percent increase in their energy provider’s service fee, thanks to work by AARP Nevada and other consumer protection groups.
Instead, those residents will only see a 12 percent increase in the charge this month, rather than the proposed spike.
Last month, Nevada’s utility regulators rejected Sierra Pacific Power’s request to raise its basic monthly service fee from $16.50 to $45.30, which would have been the nation’s highest service charge from an investor-owned utility. The fee has increased by $2 instead.
“We don’t want customers owing $45 before they even turn on the lights,” said Bill Malcolm, an AARP government affairs director of financial security and livable communities. “High fixed charges make controlling your energy bill more difficult.”
Recently, the number of utility providers pursuing higher service charges has surged, according to research by consulting firm Synapse Energy Economics. A service charge is a fixed monthly fee paid by customers regardless of their actual energy consumption. Utility providers often prefer to collect revenue through these fixed fees, as opposed to those tied to consumption, because it lowers the company’s risk of lost revenue due to weather patterns or energy efficiency campaigns.
But low-income customers tend to be hit hardest by these high fixed fees because they typically use less energy, according to Synapse’s research commissioned by the Consumers Union, the advocacy arm of Consumer Reports. The high fixed charges effectively result in a higher per-unit cost for the lower-income, lower-use households compared to the higher-income, higher-use households.
The rising charges are hurting many older Nevadans, according to AARP. “Many of our members are on fixed incomes,” wrote Jessica Padron, assistant state director for AARP Nevada, in August comments submitted to the Public Utilities Commission of Nevada regarding Sierra Pacific Power’s proposal. “Others are low income and struggle to make ends meet, especially in this current inflationary environment.”
Sierra Pacific Power’s proposed 175 percent increase to its basic service charge “appears excessive,” Padron wrote, “and doesn’t appear supported by its costs to serve the residential customers.” AARP Nevada instead argued for a 24 percent reduction in the proposed charge, as recommended by the Nevada Bureau of Customer Protection.
The commission settled on a $2 increase, bringing the fee to $18.50, which “balances the need for Sierra Pacific to cover rising fixed costs while still adhering to the principles of gradualism in rate-making that protects customers from rate shock,” Public Utilities Commissioner Randy Brown said during a September hearing. The rate now matches what Southern Nevada customers are paying.
Across the country, AARP fights to keep utility prices affordable for older Americans. Last year, we notched more than 30 wins in 17 states, preventing utility shutoffs, expanding eligibility and funding for energy assistance programs, and increasing transparency around rates and charges.
“In many ways, stepping up to ensure families have affordable, reliable, and safe utility services is some of our most important work,” said Nancy LeaMond, AARP’s chief advocacy and engagement officer. “AARP will continue to look for future opportunities to ensure the health, financial well-being and overall quality of life of Americans is not jeopardized by utility companies trying to improve their bottom line on the backs of consumers.”
Learn more about how to manage your money, and listen to our Today’s Tips podcast for more winter energy-saving advice.
Emily Paulin is a reporter for AARP covering nursing homes, health care, and federal and state policy. Her work has also appeared in Broadsheet, an Australian lifestyle publication.
