PSC report targets power restructuring

Friday, June 14, 1996 | 11:59 a.m.

The time has come for major changes to the monopolistic electric industry in Nevada, but protecting the environment, forecasting future power needs and diversifying fuels should remain under state regulation, a report said.

The Nevada Public Service Commission approved on a 4-1 vote Thursday night its interim order and a report focusing on ways to benefit the small state's position as giant neighboring California presses to spur power sales on the open market.

The report will become a cornerstone for the 1997 Legislature, which is studying the issue and will ultimately decide how far Nevada will plunge into the competitive power market.

"We need to understand where we are," said PSC Chairman John Mendoza. "It is clear to me the time for electrical restructuring is here, but not for everyone."

After months of workshops and hearings, the PSC completed the "monumental task" of offering direction to lawmakers, he said. But Mendoza warned that current customers need protection.

"We have a responsibility to watch out for residential customers who may wind up with much of the costs, but few of the benefits," Mendoza said.

Commissioner Judy Sheldrew, who put the 153-page report together in about a year, said she agreed with Mendoza, "but we must do it so all customers benefit from it and not come to any harm."

For Commissioner Jo Ann Kelly, attending her last meeting after 11 years on the PSC, keeping oversight on power demand forecasts remains a basic issue of fairness. "Everybody isn't going to get cheap power," she said.

With Nevada's weather extremes, the state can't afford to allow the markets to forecast sensitive peak demands, Kelly said.

The report is important as a credible basis for future regulations, Kelly said. "What we have produced is something for Nevada," she said.

Consultant Scott Hempling stressed that Nevada continues to need flexibility in its approach to making decisions on power needs and electrical distribution and transmission.

But Commissioner Galen Denio called the report "a reorganization and regurgitation" of discussions with industry, consumers, regulators and consultants laced with "a paucity of hard facts."

Denio urged a more logical and practical review of restructuring before the Legislature opens in January. "How can Nevada plunge in, if the state's customers enjoy competitive market prices today?" he asked.

New commissioner Donald Soderberg called the report "a work in progress" and said it took a hard look at the issues.

In other action, the PSC delayed action on an item to review power line extension procedures, a growing concern to current customers facing electric poles and high-transmission lines in their back yards.

The PSC has not examined power line placement for 18 years. Although the PSC staff believed a stipulated agreement had been reached with Nevada Power, the proposal fell through at the last minute.

Commissioner Kelly ordered the parties to reach an agreement. If that fails, the commission will start over again and hear the case from the beginning.

"There's too much building in Southern Nevada to let this slip any further," she said.