Nevada Power settles Test Site dispute

Bill Gang

Wednesday, April 8, 1998 | 11:13 a.m.

A settlement has been reached in a dispute over which companies get to provide the Nevada Test Site's electrical power into the year 2000.

The controversy dates back to 1963, when Nevada Power Co. and Valley Electric Association Inc. formalized their shares of the government's business.

Valley Electric filed a legal action in District Court in 1994 challenging the split and a year later District Judge Gene Porter sided with the rural power company, stating the earlier agreement clearly gave that company a controlling share of the market.

In doing so, Porter reversed a Nevada Public Service Commission conclusion that the 1963 agreement merely provided the parties with the opportunity to compete for test site business.

Nevada Power appealed to the Nevada Supreme Court, which reversed Porter in January, calling the 1963 agreement "ambiguous" and reinstating the PSC ruling.

That change was formalized Monday in Porter's courtroom.

But in the meantime, Nevada Power, Valley Electric and Lincoln County Power District No. 1 negotiated a settlement that would give each a piece of the Department of Energy pie.

The power companies, according to the settlement, recognized that they each have portions of the test site within their service areas and can't physically limit the use of electricity to those areas.

In the deal, Nevada Power and Valley electric will each provide 40 percent of the power needs, with Lincoln Power filling in the other 20 percent.

The deal is supposed to be in effect through the middle of 2000, but PSC attorney Tony Sanchez noted that power companies and their monopolies are going to be deregulated on Dec. 31, 1999.

The settlement leaves the door open for renegotiation or modification if power requirements or the ability of companies to supply the necessary power change.