Nevada Finalizing Electric Rate Incentives to Attract New Businesses


Nevada Power Company (“Nevada Power”) and Sierra Pacific Power Company (“Sierra”) are seeking final approval from the Public Utilities Commission of Nevada (“PUCN”) to offer an Economic Development Rate Rider (“Rate Rider”) as an incentive to attract new businesses to the State of Nevada. During the 2013 Nevada Legislative Session, the Legislature passed Assembly Bill 239, which created the Rate Rider as a new incentive for businesses to relocate or commence operations in Nevada. A business that qualifies for the Rate Rider will see a discount in its Base Tariff Energy Rate (“BTER”) by the following amounts:

(a) 30% in the first year of the Effective Rate Period;
(b) 20% in the second and third years of the Effective Rate Period; and
(c) 10% in the fourth year of the Effective Rate Period.

To qualify for the Rate Rider, the business must satisfy the following requirements:

(a) The business is or intends to be a new commercial or industrial customer of an electric utility in Nevada;
(b) The business is not, and has not been during the immediately preceding 12 months, a customer of any other electric utility in Nevada;
(c) The new load to be served by the electric utility is more than 300 kilowatts;
(d) The electric utility has determined that the business’ use of the load is not for a project, purpose or facility which carries an abnormal risk or is seasonal, intermittent or temporary; and
(e) The business has applied for each economic incentive, including, without limitation, any abatement or partial abatement of taxes, offered by Nevada or any local government for which the applicant is eligible.

A business that desires to apply for the Rate Rider must file an application with the Nevada Governor’s Office of Economic Development (“GOED”) requesting a letter of eligibility. If the requirements discussed above are met, the GOED will provide the letter of eligibility to the PUCN for final approval to participate in the Rate Rider Program. Upon PUCN approval, the business and the applicable electric utility will enter into a Service Agreement that provides each parties’ respective rights and obligations over the four year period of the program.

Nevada Power and Sierra have filed for approval of their respective Rate Rider tariffs and proposed Service Agreements with the PUCN. (See PUCN Docket Numbers 14-03013 and 14-03014.) The PUCN has requested interested parties who would like to comment on the proposed tariffs and Service Agreements to file comments or petitions to intervene by April 16, 2014.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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