Opinion ID: 2631746
Heading Depth: 1
Heading Rank: 3

Heading: Deferred energy accounting

Text: NRS Chapter 704, which governs the regulation of public utilities, provides for deferred energy accounting. [1] Deferred energy accounting permits a public utility to [record] upon its books and records in deferred accounts all increases and decreases in costs for purchased fuel and purchased power that are prudently incurred by the electric utility. [2] Thus, deferred energy accounting documents the losses (or gains) resulting from any difference between wholesale purchase prices and the regulated retail consumer rates by authorizing a public utility to seek reimbursement from its customers through a rate increase (or to reimburse its customers through a rate decrease) at a later date. [3] In the mid-1990s, the Legislature began to deregulate the electric utility market. [4] Thus, from 1995 through 2001, the Legislature adopted various measures designed to steer state-regulated electricity providers and their customers toward a private, competitive market. One such measure, Senate Bill 438, was enacted in June 1999. [5] S.B. 438 had three significant impacts on the electricity market. First, it provided for a rate freeze on the retail electrical rates a utility could charge its customers through March 1, 2003. [6] Second, it designated Nevada Power as the electrical provider of last resort, meaning that Nevada Power, or possibly a Nevada Power affiliate, would provide electricity services during the rate freeze period to those customers who did not wish to change services from the state-regulated utility to a private electric company. [7] Third, because the market was moving toward competitive selling, the Legislature abandoned deferred energy accounting as a method for recouping lost revenue associated with power purchases. [8]