Nevada Power retail unit may be renamed

Thursday, Aug. 20, 1998 | 11:23 a.m.

Nevada Power Co. may form an affiliate with another name to provide service to its customers in the competitive electrical environment planned in Nevada.

The Public Utilities Commission of Nevada today gave initial approval to the controversial regulation establishing requirements for electricity distribution companies and affiliates.

The regulation now will be set for a hearing, giving Nevada Power a chance to fight it.

Commissioners also approved a regulation on policies for "providers of last resort" -- rules governing how customers who don't choose a power company would be served when competition begins.

Nevada Power's affiliate must have a new name because its broad name recognition would give it an unfair advantage, PUC members say.

The issue is controversial because Nevada Power and Northern Nevada's utility, Sierra Pacific Resources, believe their established corporate identities are invaluable in competing against out-of-state competitors who can use their corporate names if they plan to enter the market when restructuring occurs in January 2000.

The PUC sought legal briefs from affected parties prior to making a final decision.

Commissioners solicited opinions on whether the policy violates the First and Fifth amendments of the U.S. Constitution. The First Amendment guarantees freedom of speech while the Fifth Amendment prohibits the confiscation of property without just compensation. The property, in this case, is the companies' corporate identities.

Under the proposed regulation, however, any new affiliate would be able to identify its relationship to the parent company as long as the parent company's logo is not used and a disclaimer states the affiliate is not the parent. The disclaimer was necessary to satisfy Nevada's Unfair and Deceptive Trade Practices Act and provisions of the Federal Trade Commission.

In legal briefings opposing the rule, Nevada Power was joined by Southwest Gas Corp. and the Utility Shareholders Association of Nevada. But one of Nevada Power's potential future competitors, Enron Energy Corp. of Houston, supports the rule.

"We're attempting to balance the right of the state to provide competition vs. the rights of the companies to use their corporate identities and logos," said Commission Chairwoman Judy Sheldrew.

"We're not intending to disadvantage the existing companies but to encourage competition," Commissioner Tim Hay said on Wednesday.

The proposed provider of last resort regulation suggests a two-step process. Utilities would bid to serve a percentage of customers who choose not to choose a provider. If 100 percent of those customers are not sought, the remaining would be served by the affiliate of the current utility provider -- in the Las Vegas area, Nevada Power.