On September 17, 2025, the Nevada Public Utilities Commission voted in favor of NV Energy’s proposal to introduce a mandatory daily demand charge for its residential and small commercial customers, as part of its 2025 Southern Nevada rate case. This novel multi-part rate structure helps ensure a more equitable cost allocation among customers within the class. CRA’s energy expert Amparo Nieto supported NV Energy’s team during the process, by leading an update to the Electricity Marginal Cost Service study and providing key insights to the Company into the design of cost-reflective, multi-part rates that enhance the efficiency of price signals for NVE’s customers.
NV Energy’s current two-part residential rate structure does not appropriately balance cost recovery between high and low-load factor customers, due to the Nevada statutes that prohibit mandatory time-of-use-based rates for any residential customers, and a low residential Basic Service Charge that does not fully reflect the cost of the local distribution facilities. This existing structure leads to increasing cost shifts as more customers install solar generation due to the gap between avoided costs and revenue shortfall. The recently approved daily demand charge will help mitigate these equity concerns, obviating the need to increase the fixed monthly customer charge to all customers. By making it a daily demand charge, it mitigates the potential bill volatility that a customer may experience from a traditional monthly demand charge. The new rate structure is scheduled for implementation in April 2026, and will differentiate between single-family homes and multifamily residences. The charges are revenue neutral for the average customer in each rate, but will enhance energy affordability for the bulk of non-solar residential and small commercial customers, while increasing the electricity bill for solar customers on net energy metering (NEM), other things equal.
In prior publications and testimonies, Ms. Nieto has recommended inclusion of a monthly contract demand charge to reflect the fixed nature of the local line transformer and conductor requirements which are sized with long-term customer maximum demand in mind. When a contract demand charge is not deemed feasible to implement, a non-coincident demand charge is a reasonable alternative as it improves intra-class fairness and transparency around true cost impacts of energy usage growth.
