Gov. Joe Lombardo let a seat on the three-member Public Utility Commission go vacant, allowing an additional avenue for the commission’s rulings to be challenged. (Photo by Anton Petrus/Getty Images)
The appointment of a hearing officer to cast the deciding vote in a contentious NV Energy rate request before the Public Utilities Commission was “not statutorily required” and resulted in the approval of a $30 million-plus bill for ratepayers, according to a motion for reconsideration filed by Wynn Resorts, an intervening party in the case.
The 2-1 vote by the PUC to saddle NV Energy customers in Southern Nevada with more than $19 million for natural disaster preparation in Northern Nevada is being challenged by major resorts and the Attorney General’s Bureau of Consumer Protection on a variety of issues.
Attorney Curt Ledford, representing Wynn Resorts, wrote the Commission’s findings are ‘unreasonable because they are based on erroneous conclusions of law and mistaken facts, and were the result of a tie-breaking vote from a Commission-appointed Acting Commissioner that was not statutorily required and which had the effect of changing the outcome that would have resulted had the vote been based on the two statutorily required votes.”
Ledford argues the PUC’s appointment of hearing officer Sam Crano to cast the deciding vote on the rate hike was unnecessary because Nevada law does not require three commissioners participate in all votes, but rather only those involving general rate applications and annual deferred energy adjustments.
“Only in the most dire of circumstances – when the Governor has not appointed an Acting Commissioner – does the Commission itself have the authority to appoint a hearing officer as Acting Commissioner,” Ledford wrote in his motion.
Gov. Joe Lombardo has yet to fill a vacant spot on the commission. Ledford notes that Crano, an attorney, would be ineligible for Lombardo’s appointment to the Commission, given the requirement that no more than two members of the board share the same profession. Commissioners Hayley Williamson and Tammy Cordova are attorneys.
Ledford cites Crano’s participation in the vote as cause for reconsideration.
“The Legislature’s intent that no more than two Commissioners be from the same field of experience was intended to ensure that a diversity of perspectives is reflected in Commission decisions,” says his motion.
PUC General Counsel Garrett Weir told the Current last month that appointing a hearing master can prevent a utility’s application from being summarily approved.
“Notably, if the Commission fails to act on certain types of utility applications (such as rate cases) within a specified time period, the applications are deemed approved in their entirety pursuant to statute,” Weir said via email.
Nevada law requires the PUC to approve or disapprove of any change to the rate schedule within 210 days of the application’s filing. Another law says in the event the PUC does not issue an order in 210 days, “the proposed changes shall be deemed to be approved by the Commission.”
Ledford asserts a tie vote – the outcome if Crano had not been allowed a vote as a hearing master – is deemed a denial, citing a Pennsylvania court case. He did not respond to requests for comment on whether it’s applicable in Nevada.
The PUC voted last month to approve NV Energy’s natural disaster preparation plan (NDPP), despite the utility’s failure to “adequately assess or quantify the socialized benefits associated” with the costs, according to the order written by PUC chairwoman Williamson, who voted in favor of the rate.
Motions for Reconsideration filed by Wynn Resorts, Caesars Entertainment, the Nevada Resort Association, and the BCP cite NV Energy’s failure to make the case for a statewide rate, when the efforts are focused on combating wildfires in Lake Tahoe.
Williamson, who led the effort to approve the NDPP, is also vice-chair of the Tahoe Regional Planning Authority.
NV Energy is the parent company of Nevada Power Co., which operates in Southern Nevada, and Sierra Pacific Power Co., the utility in the northern part of the state.
Laura Grenier, an attorney representing the Nevada Resort Association, argued the Commission’s order was not based on “substantial evidence, constitutes ad hoc rulemaking, and created an illegal cost shift of more than $19.6 million of costs spent by Sierra Pacific Power Company to Nevada Power Company customer rates.”
Grenier argued the PUC’s decision “… relied on insufficient evidence to justify a cost recovery approach that unlawfully requires customers of one utility to pay costs incurred by a separate and distinct utility. Nevada has a clear precedent of allocating utility costs to the cost causer.”
The average $2.50 a month charge is expected to double statewide as a result of the PUC’s approval.
The Commission has 40 days to grant or deny a petition for reconsideration. Parties have 30 days following final action by the Commission to request judicial review by a District Court.
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