Nevada Power Co. v. Eighth Judicial District Court of State of Nevada

102 P.3d 578, 120 Nev. 948, 120 Nev. Adv. Rep. 97, 2004 Nev. LEXIS 140
CourtNevada Supreme Court
DecidedDecember 23, 2004
Docket41215
StatusPublished
Cited by29 cases

This text of 102 P.3d 578 (Nevada Power Co. v. Eighth Judicial District Court of State of Nevada) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nevada Power Co. v. Eighth Judicial District Court of State of Nevada, 102 P.3d 578, 120 Nev. 948, 120 Nev. Adv. Rep. 97, 2004 Nev. LEXIS 140 (Neb. 2004).

Opinion

*951 OPINION

Per Curiam:

This original writ petition challenges the district court’s jurisdiction over a class action complaint against petitioner Nevada Power Company that alleges causes of action for deceptive and unfair trade practices, breach of the covenant of good faith and fair dealing, and breach of contract. We address two principal issues. First, does the district court have subject-matter jurisdiction to entertain a complaint against a public utility that alleges causes of action for unfair and deceptive trade practices, breach of the covenant of good faith and fair dealing, and breach of contract? Second, if the district court does have jurisdiction over those claims, does the Public Utilities Commission of Nevada (PUC) have primary jurisdiction over them so that the district court should defer to the PUC? We conclude that the district court has subject-matter jurisdiction over the claims against Nevada Power and properly chose to exercise that jurisdiction. Accordingly, we deny the petition.

*952 FACTS 2

Petitioner Nevada Power is a regulated public utility that provides electric power to more than 657,000 residential and commercial customers in southern Nevada. The real parties in interest are Bonneville Square Associates, LLC, and Union Plaza Operating Company. 3 Bonneville is primarily engaged in the business of owning commercial office buildings and has its principal place of business in Las Vegas, Nevada. Union Plaza is engaged in the business of hotel and gaming operations and also has its principal place of business in Las Vegas. Bonneville and Union Plaza are commercial customers of Nevada Power.

Nevada Power classifies its customers by size and the voltage level at which service is taken and charges its customers based on rates approved by the PUC. Nevada Power classified Bonneville and Union Plaza as Large General Service-Secondary (LGS-S) customers and charged them at the LGS-S rate.

The LGS-S customers receive service at an incoming voltage of approximately 12,000 volts. That voltage must be reduced or converted to 480 volts before the customer can use the power. As part of its service to LGS-S customers, Nevada Power provides an on-site transformer to perform this conversion. The transformer uses energy in the conversion process. As the owner of the transformer, Nevada Power is responsible for its maintenance and upkeep, including the energy used in the conversion process. The LGS-S rate includes costs related to the maintenance and upkeep of the transformers and the energy lost in the conversion process.

Another class of Nevada Power customers of similar size and receiving a similar incoming voltage level own their own transformers. These customers are charged at the Large General Service Primary (LGS-P) rate. Because an LGS-P customer owns the transformer and provides for its maintenance and upkeep, including the energy lost in the conversion process, the LGS-P rate does not include those costs and is therefore lower than the LGS-S rate.

The customer is charged for electricity based on a meter reading. Meters can be placed on either side of a transformer: on the primary side of the transformer, before the conversion process, or on the secondary side of the transformer, after the conversion process. Because energy is lost in the conversion process, the meter’s placement affects the amount of electricity that the cus *953 tomer is charged for using. The LGS-S customer, since it does not own the transformer, does not use the energy lost in the conversion process. Thus, the meter usually is placed on the secondary side of the transformer, after the conversion has taken place, so that the LGS-S customer is not charged for energy that it did not use. In contrast, the LGS-P customer is usually metered on the primary side of the transformer to account for the energy used by its transformer.

When Union Plaza built its two towers in 1971 and 1983, Nevada Power prepared the plans for the placement of the meters and transformers needed for the towers. Although Nevada Power had classified Union Plaza as an LGS-S customer, Nevada Power’s plans called for the meters to be placed on the primary side of the transformers for both towers. When Nevada Power presented the plans to Union Plaza, it represented that primary side placement of the meters was in Union Plaza’s best interest because Nevada Power would pay for the meters and installation costs if the meters were placed on the primary side of the transformers. Nevada Power did not disclose that because Union Plaza was an LGS-S customer, metering on the primary side would result in it being charged twice for the lost energy.

In 1990, Bonneville expanded its office building in Las Vegas. As part of the expansion, Bonneville planned to install a new meter and transformer. Nevada Power prepared the plans for the placement of the meter and transformer. Although Nevada Power was charging Bonneville at the LGS-S rate, Nevada Power prepared plans that placed the meter on the primary side of the transformer and represented to Bonneville that this meter placement was in Bonneville’s best interest because Nevada Power would pay for the meter and installation costs if it were placed on the primary side. As in its interactions with Union Plaza, Nevada Power did not disclose that because Bonneville was an LGS-S customer, metering on the primary side would result in it being charged twice for the lost energy.

Bonneville and Union Plaza, individually and on behalf of others similarly situated, filed in the district court a class action complaint against Nevada Power. In the first amended class action complaint, Bonneville and Union Plaza asserted claims for unfair and deceptive trade practices, breach of the covenant of good faith and fair dealing, and breach of contract. All three claims are based on the general allegation that Nevada Power deliberately and knowingly engaged in a pattern and practice of misleading or failing to disclose material facts that caused some of its LGS-S customers to be metered on the primary side while being charged the higher LGS-S tariff rate. Bonneville and Union Plaza seek special and compensatory damages and, for the unfair-and-deceptive-trade-practices claim, punitive damages.

*954 Nevada Power filed a motion to dismiss for lack of subject-matter jurisdiction and lack of primary jurisdiction. It argued that Bonneville and Union Plaza’s claims essentially challenged the tariff rate and the placement of their meters. According to Nevada Power, those claims are within the PUC’s exclusive jurisdiction and therefore the district court lacks subject-matter jurisdiction. Alternatively, Nevada Power argued that, at the very least, the PUC has primary jurisdiction over the claims and therefore the district court should defer to the PUC and dismiss the complaint. Bonneville and Union Plaza opposed the motion, taking issue with Nevada Power’s characterization of their claims and arguing that the district court, not the PUC, has jurisdiction over those claims.

After hearing arguments, the district court summarily denied the motion.

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Bluebook (online)
102 P.3d 578, 120 Nev. 948, 120 Nev. Adv. Rep. 97, 2004 Nev. LEXIS 140, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nevada-power-co-v-eighth-judicial-district-court-of-state-of-nevada-nev-2004.