State ponders role after utility deregulation

Larry Henry

Friday, Dec. 20, 1996 | 11:59 a.m.

By day, 64-year-old Barbara Lake dresses in a clown suit, stands on the sidewalk and flags down customers for the apartment complexes that hire her.

When night comes, she returns to a mobile home at the foot of Mount Charleston, slips under a pile of blankets and shivers in the darkness.

Lake told legislators in Las Vegas Thursday that there are no electric lines to her home or the other 89 families in Lower Kyle Canyon, 15 minutes away from the Santa Fe hotel-casino.

"What are we supposed to do?" Lake asked at a legislative subcommittee hearing.

Lake is one of many Nevadans wondering if they will benefit from a proposal to allow competition in the utility industry.

The proposal has created a battleground pitting pro-business legislators who oppose government regulation against those who worry that small consumers will pay higher electric bills -- or, like Lake, be left out in the cold even longer -- without oversight.

Thursday's hearing illustrated the differences in philosophy.

While the subcommittee was listening to testimony from state officials who want to beef up their staffs, some legislators were questioning whether the state should have much of a role at all.

Nevada Consumer Advocate Fred Schmidt, for instance, unveiled a plan to add five employees and reorganize the office. He wants to "combine resources" of the consumer advocate, the telemarketing and consumer fraud unit and the criminal securities unit.

One of the tasks he said the new office will tackle is consumer education. Most legislators agree that utility competition is coming, probably in the next two years, whether they authorize it or not, because Congress will pass federal laws putting it in place.

That will leave thousands of consumers uncertain of which way to turn for the lowest rates, Schmidt said.

"Consumers can benefit (from competition)," he said. "We need to make sure there's good education."

Assemblyman Peter Ernaut, R-Reno, the subcommittee chairman, said the state should play a minimal role in public education. He said government educational programs might be helpful when competition is in its early stages but not after that.

"The companies will educate the public through advertising," said Ernaut, who owns an advertising agency. "There's a certain amount of education consumers have to take on themselves or be run over by it."

Ernaut's remarks prompted a rebuke from Sen. Dina Titus, D-Las Vegas, who has voiced concern that small consumers will pay higher rates after casinos and mines sign with private companies.

"There's a big difference between consumer education and advertising," Titus said.

Lake is certain that she and her neighbors in Lower Kyle Canyon can benefit from education. They are working to persuade Nevada Power Co. that it won't be too expensive to string lines to their neighborhood.

Meanwhile, a gasoline-powered generator provides electricity to her mobile home. She makes $800 a month, so she shuts the generator down at night to save money.

"It's important to get somebody to compete," she said during a break in the meeting. "But I want (the Public Service Commission) involved, so we'll be sure to get a fair deal."

Sen. Kathie Augustine, R-Las Vegas, told Lake competition won't help her until there are lines running to her home. Competitors will tap into the same power source, Augustine said. Without lines, there's no power and no competition.

That added to Lake's frustration.

"I wish somebody would help me," she said. "I live at 4,000-feet elevation. It gets cold up there at night."