If you’ve noticed your utility bills skyrocketing, you’re not alone. Gas and electric bills across the state have been rising at an unprecedented rate over the past several years.
And while some of this has been due to natural gas prices and hotter weather, most of it is because big monopoly utilities like NV Energy and Southwest Gas are being allowed to game the system.
Here in Nevada, the Public Utility Commission is supposed to provide a check on utility rates, and to balance customer and utility interests. Instead, the PUC is letting these monopolies run wild with one record-breaking rate hike after another.
In April, the PUC approved a record $59 million rate increase for Southwest Gas, which is $20 million higher than its previous record hike in 2020. This is despite Southwest Gas reporting a first-quarter net income ($98.5 million) that is more than double that of its first quarter in 2023 ($45.9 million), and a record 12-month operating margin of $1.3 billion.
The hike also comes as SWG customers were already reeling from other recent SWG hikes. Even before this latest hike, customers reported their gas bills shooting up more than 300% in a single month.
Utilities in Nevada are allowed to make rate adjustments every three months, and those are in addition to the hikes from general rate cases.
While average Nevadans are getting hammered by higher and higher gas bills, Southwest Gas officers and shareholders — most of who reside outside of Nevada — are getting richer and richer.
And it’s more than just Southwest Gas that keeps bellying up to the PUC trough for more of your hard-earned cash. NV Energy has a proposal to roughly triple its basic service charge from $16.50 to $44.40 per month for residential customers in Northern Nevada.
In other words, if you live in Northern Nevada and use no energy at all, you would still owe NV Energy more than $44 per month! The proposal is more than a scheme to pad profits; it’s a sinister plan to guarantee profits and reduce how much customers can save through energy conservation or by installing rooftop solar.
NV Energy is also seeking an additional $95 million in rate hikes to further pad shareholder profits. And this comes just months after the PUC approved a $37 million rate hike for the utility.
In its talking points, NV Energy is seeking to confuse the public by claiming that the impact of the hikes will be lessened by cheaper electricity due to falling global natural gas prices. Actually, these proposed hikes would skim off those savings, denying customers the full benefit of lower gas prices.
The original reason gas and electric utilities were allowed to be monopolies, and thus insulated from free market competition, was to leverage private investment for public benefit.
Today, however, monopolies like SWG and NV Energy have rigged the system — with the PUC’s blessing — to enrich their shareholders by siphoning off customer wealth in ever greater amounts.
If shareholder enrichment is their primary goal, then these utilities no longer deserve to be afforded monopoly protection and captive customer bases.
The PUC is supposed to provide a check on monopoly utilities, to protect ratepayers from excessively high utility bills. It has failed miserably. PUC commissioners, it appears, have become cozy with utility lobbyists, too often buying into even the most ludicrous utility claims while largely ignoring customer concerns.
It’s akin to a rigged game of Monopoly where the banker (in this case the PUC) awards Boardwalk, Park Place and other key properties — improved with hotels — to fat-cat utility shareholders before the game even begins.
The fair approach is simple: If a utility’s profits are increasing at the same time customer bills are, then the PUC should not approve a new rate hike.
If the PUC is unwilling to effectively represent ratepayer interests, if it’s incapable of saying “no” to NV Energy and Southwest Gas, then it’s time to dump the monopoly model and give Nevadans the cost benefits that come with genuine free market competition.
It’s time for this endless cycle of budget-busting rate hikes to stop. The PUC can perhaps earn back a modicum of public trust if it rejects this latest NV Energy hike.
David Jenkins is president of Conservatives for Responsible Stewardship.
