In a filing with the Public Utilities Commission today, NV Energy and MidAmerican Energy Holdings report that they have reached a settlement agreement with the state Bureau of Consumer Protection that drops previous proposals to have ratepayers pick up half the $2 billion acquisition premium resulting from the deal. Approval by the PUC is still needed.
NV Energy stock was selling for $19.28 a share on May 29 and MidAmerican, owned by billionaire Warren Buffett, offered $23.62 a share the next day. That works out to offering $5.6 billion for $3.6 billion in stockholder equity. Today the stock price stands at $23.80.
NV Energy also agreed to not request an increase in allowed return on equity in excess of 10 percent in any rate case filed in 2014. Nor will the company ask for rate hikes to cover any salary increases for senior management for 24 months following the close of the sale.
In addition NV Energy proposes to offer retail customers $20 million in one-time credits on power bills. That would be a one-time bill credit of about $13 for single-family residential customers in southern Nevada, a one-time bill credit of about $7 for single-family residential electric customers in Northern Nevada and a one-time bill credit of about $2 for single-family residential gas customers in Northern Nevada. The Bureau of Consumer Protection had recommended an immediate $30 million reduction in the rates.
NV Energy also agrees to not seek to recover lost revenues in 2014 for 2013 program costs, nor will the company request recovery of lost revenues in excess of 50 percent of costs in 2015 for 2014 programs.
The company also will make permanent the charges for opting out of the smart meter program.
A hearing on the sale of the company and these details is scheduled for Nov. 18.
NV Energy also disputes claims that its power rates are the highest in the Mountain West, citing figures complied by the U.S. Enegy Information Administration. In August Nevada residential retail electricity cost 11.69 cents per kWh, compared to New Mexico’s 11.82, Arizona’s 11.77 and Colorado’s 11.88. The Californian residential rate was 16.24 cents. Idaho’s rate was 9.21 cents.