Subject: Detailed Update on the Public Utilities Commission's Order on Townhomes Classification

Dear SNHBA Members,

We hope this message finds you well. We would like to provide you with an update regarding the recent order from the Public Utilities Commission of Nevada that directly impacts our industry.

Background: 

SNHBA filed a petition with the Public Utilities Commission of Nevada seeking clarity on the classification of townhomes as single-family dwellings, especially concerning NV Energy's Rule 9 Line Extension Allowances. This was done to address ambiguities in how townhomes were being treated for utility allowances.

Details of the Order:

1. Classification of Townhomes: 

The order clearly states that townhomes will now be considered as single-family dwellings for the purposes of NV Energy's Rule 9 Line Extension Allowances. This is a significant shift from the previous ambiguity where townhomes might have been classified differently.

2. Financial Implications:

NV Energy had raised concerns about the financial impacts of such a classification, including the potential for increased electric bills for townhome residents. However, with the Commission's ruling, it's anticipated that townhome developers will be eligible for higher allowances to offset line extension project costs associated with new townhome construction.

3. No Reimbursement for Past Projects:

It's important to note that while the order acknowledges our stance on the classification, there will be no reimbursement for prior line extension allowances. This means that past projects won't benefit retroactively from this new classification.

4. Upcoming NV Energy Compliance:

NV Energy is mandated to align its Rule 9 tariff with this order. They have until December 1, 2023, to make the necessary adjustments.

Implications for Builders:

The order's acceptance signifies a considerable shift in how townhomes will be perceived under NV Energy's allowances. This could streamline processes, alter financial calculations concerning townhome development, and potentially reduce costs. Still, the exact financial and operational implications will become clearer once NV Energy revises their tariff.

Reimbursement Details for Rule 9 Line Extension Agreements:

For clarity regarding the reimbursement rates under NV Energy's Rule 9 Line Extension Allowances following the recent order:

• Post-December 1, 2023, Agreements: Any Rule 9 line extension agreements that are executed after December 1, 2023, will be reimbursed at the newly established higher single-family rate.
• Agreements Before December 1, 2023: For those agreements signed prior to December 1, 2023, where projects are still in the development phase, there is a possibility of eligibility for the increased reimbursement. It's crucial to understand that eligibility will be contingent on the specific language contained within the individual Rule 9 Agreement.

If there are any uncertainties or questions related to specific projects and their reimbursement rates, we recommend reaching out to the expert team at Davison Van Cleve. They are well-versed in this domain and can provide tailored advice and clarity for your unique situation.

Recommendations:

We urge all builders to remain vigilant and stay updated with NV Energy's forthcoming tariff revisions related to Rule 9. This will help in understanding and leveraging the benefits that this new classification offers.

Dallas A. Harris | Attorney

Davison Van Cleve PC

4675 W. Teco Ave., Suite 230

Las Vegas, NV 89118

dah@dvclaw.com

T: 909.575.7320 | F: 503.241.8160