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Consumer Rights Attorney Questions NV Energy's Prepayment Plan Proposal

PHOTO: Nevada's Public Utilities Commission is considering a request from Nevada Energy to create a prepayment option for its customers, but the Legal Aid Center of Southern Nevada says the program could put some people in perpetual debt. Photo courtesy of the U.S. Department of Energy.
PHOTO: Nevada's Public Utilities Commission is considering a request from Nevada Energy to create a prepayment option for its customers, but the Legal Aid Center of Southern Nevada says the program could put some people in perpetual debt. Photo courtesy of the U.S. Department of Energy.
July 21, 2014

CARSON CITY, Nev. – The Legal Aid Center of Southern Nevada is questioning a prepayment plan for electricity bills being considered by Nevada's Public Utilities Commission.

Sophia Medina, a consumer rights attorney with the Legal Aid Center, says NV Energy's proposed Flexible Payment program would operate in a similar way to prepaid cell phones.

She says her organization's concerns, which are also shared by AARP Nevada, is that low-income people would be the most-likely customers.

"So, the concern is, people aren't going to be able to anticipate the electricity usage, she explains. “And therefore the electricity is going to be turned off."

In its filing with the Public Utilities Commission, NV Energy says opt-in Flexible Payment-style programs in other states have saved customers money and resulted in lower energy use.

Medina says that lower use can be explained in part by deprivation. Meaning, customers only use the amount of electricity they can afford and then do without.

She says another problem with the plan is that people can end up borrowing money from high-interest payday lenders.

"It almost guarantees that people will get on a debt treadmill,” she maintains. “If you don't have electricity and you need a payday loan to get electricity, that is obviously a cause for concern and raises some definite red flags."

Medina says the prepayment plan also eliminates current protections in the Consumer Bill of Rights, including a required 10-day notice prior to termination.

Meaning, that under the pre-paid proposal, NV Energy could immediately shut off services remotely.

The Public Utilities Commission is holding a hearing on the issue, which is part of NV Energy's rate increase request.

The hearing is scheduled for 6 p.m. Tuesday at 9075 West Diablo Drive, Suite 250 in Las Vegas.




Troy Wilde, Public News Service - NV