Southwest Gas customers can expect to see significant decreases in their bills beginning next month.
The Public Utilities Commission of Nevada voted Monday to approve the utility’s request for a significant decrease in its deferred energy rate, an accounting method used by the utility to adjust for changes in the price of natural gas.
The change will go into effect on July 1 and is expected to lower the average gas bill in Southern Nevada by more than $10 a month, and by more than $18 a month in Northern Nevada, according to PUC Hearing Officer Sam Crano.
The commission also approved a request from staff to investigate how NV Energy overcharged as many as 80,000 customers during the last two decades.
NV Energy, which services most of the state, overcharged some 60,000 customers by more than $17 million, disconnected service to some, and attempted to rectify the mistake by offering six months’ worth of refunds that amount to a fraction of what customers overpaid. The company informed regulators in late April that it overcharged another 20,000 customers an undisclosed amount.
“They won’t tell me how long I’ve been overcharged and how they came up with the $47 credit to my account,” Las Vegas resident Irwin Silver said during public comment. “I call up NV Energy and you give me the run around. They hang up on me.”
Chair Hailey Williamson announced the PUC’s general counsel recommended the commission grant staff’s request for an investigation.
“The scope of the investigation should include a focus on identifying the full extent of misclassifications of customers and how such misclassifications occurred, whether NV Energy misapplied its tariffs and appropriate remedies to avoid future misclassifications and compensate overcharged customers,” Williamson said. “I think this is incredibly important.”
PUC staff, through an investigation, “discovered that NV Energy has been overcharging tens of thousands of misclassified residential customers since as early as 2001,” according to the staff’s petition.
NV Energy, which says it completed an audit of the misclassifications in January, disclosed in late April that it overcharged some 20,000 “previously unidentified ‘multi-family accounts’ for an undisclosed amount.”
“Despite overcharging more than 80,000 customers for up to 23 years, NV Energy only provided refunds to a portion of affected customers. For the customers who received them, NV Energy capped refunds at six months, amounting to less than $2 million in refunds,” PUC staff asserted, adding the rule capping reimbursement to six months may not apply to customers in the north, and does not apply to customers in the south.
The skimpiness of the refunds triggered public outcry and caught the attention of the Nevada State Legislature, which approved Assembly Bill 452, sponsored by Democratic Assemblymember Tracy Brown-May. The law requires that customers receive full refunds with interest for overcharges, address high utility bills by shifting some cost volatility back to utilities, and extend regulatory timelines for rate case reviews.
The PUC, however, already has the authority to order NV Energy to fully refund customers for the overcharge.
It’s unknown how the misclassification occurred, according to the petition, but it began in 2001 when the utility adopted its multi-family rate schedule.
Between 2017 and 2024, NV Energy overcharged some 59,939 customers across 22,101 premises just over $17 million because it misclassified the multifamily residences as single-family.
During the same period, NV Energy undercharged 5,438 customers across 2,451 premises for just over $2.5 million because it misclassified single-family residences as multi-family.
The utility released a public statement saying it “promptly refunded the overcharged customers in accordance with the applicable rules and is not seeking repayment by those customers who were undercharged.”
NV Energy did not publicly disclose that the amount undercharged was a fraction (12.4%) of the amount overcharged, according to PUC staff.
“In addition to financial harm, NV Energy disconnected service for a substantial number of injured customers due to nonpayment. Between April 1, 2017 and April 1, 2024, NV Energy disconnected service to 3,177 of the 59,939 customers who overpaid,” staff wrote in its petition.
Staff writes that given the number of affected customers disconnected for nonpayment, “it is reasonable to infer that overbilling contributed to, if not caused, nonpayment and related service disconnections in some cases.”
Staff contends NV Energy used an inapplicable rule to cap refunds at six months, “denying tens of thousands of known injured customers millions of dollars of measurable financial losses…”
The utility did not notify PUC staff of the mistake, but instead unilaterally applied the six-month rule.
The PUC can issue administrative fines against NV Energy, require the utility to make customers whole, and impose any other remedy available.
Staff is recommending the Commission order NV Energy to fully refund affected customers as a sanction.
“NV Energy is committed to working with our regulators through a transparent process that provides a fair and balanced outcome for the impacted customers and will continue working with the Public Utilities Commission of Nevada through the recently opened investigatory docket,” the utility’s spokesperson Meghin Delaney said in a statement Monday. “We continue to review customer accounts to correct any remaining miscoded properties and to implement controls and process improvements to help avoid this type of error in the future.”