Tens of thousands of NV Energy customers who were overcharged by the utility over the last two decades will see a reimbursement by the end of September.
On Tuesday, state energy regulators unanimously voted to accept a nearly $63 million settlement offer proposed by the utility.
It resolves an issue first reported by customers and later investigated by staff at the Public Utilities Commission of Nevada after NV Energy accidentally misclassified nearly 43,000 multifamily residential customers, or about 10 percent of its multifamily customers statewide, as single-family residential customers, which overcharged them. The overcharges are estimated to total around $65 million, and some date back as far back as 2002.
The utility initially issued partial refunds in the form of six-month credits or checks, launching a debate between the utility, watchdog groups, the state’s Bureau of Consumer Protection and others about just how far back the utility (which only maintains billing records back to 2017) should issue refunds for.
With the settlement, the utility agrees to issue an additional $57.3 million in refunds, a move that “provides a fair and reasonable outcome for affected customers that will ensure customers are refunded in a timely manner,” according to a draft filing published Friday by state energy regulators. The draft was formally approved at the commission’s meeting Tuesday.
The misclassification occurred in two ways, according to the utility.
When the company introduced a multifamily rate in 2002, not all households were included. Other misclassifications occurred when a residence or multifamily complex was added to the utility’s system.
Most of the overcharged customers — more than 37,000 — are in the south.
Because other customers paid less than they should have, the overcharges “were essentially offset by corresponding undercharging, so there was never a windfall to NV Energy,” according to the draft filing.
According to the utility, an “absence of clear controls around accountability and ownership … created conditions where misclassifications could persist and become embedded in the billing process. NV Energy also lacked effective controls to detect and correct these misclassifications quickly.”
The utility has since taken steps to remediate those issues, according to the filing.
State energy regulators said that “a more robust discussion regarding future auditing and records retention is also warranted.” That issue will be looked into as energy regulators implement AB452, 2025 legislation that, in part, requires utilities to fully refund customers, with interest, for any overcharges.
The utility must issue refunds within 210 days and money for the refunds will come from shareholders, not existing customers.
Any refunds that go unclaimed will be rerouted to the state.
“This is the right thing to do for customers, but it should never have taken this long,” Kristee Watson, executive director of the Nevada Conservation League, said in a press release. “It took sustained public pressure and legislative action to ensure accountability. While this settlement is a positive step forward, the harm experienced by customers over many years can’t simply be erased. Moving forward, NV Energy must do better.”
— This story is used with permission of The Nevada Independent. Go here for updates to this and other Nevada Independent stories.
