TCID sues Sierra Pacific over lease

Friday, May 8, 1998 | 10:54 a.m.

The complaint, filed Tuesday in district court here, seeks unspecified damages and an injunction against Sierra Pacific.

At issue is the electric distribution system TCID leased to Sierra Pacific in 1968.

The 30-year lease expires at the end of June, at which time TCID has planned to take back the electrical system that supplies power to about 9,600 customers.

Irrigation district water right owners voted last November to pursue the electric business at the end of the lease and authorized up to $30 million in revenue bonds to pay for improvements minus depreciation.

The service area includes portions of Washoe, Churchill, Storey and Lyon counties, parts of the Pyramid Lake Paiute Reservation, the town of Fernley and all the big power users in the booming industrial park nearby.

In what has shaped up to be a nasty divorce, Sierra Pacific has filed competing applications with the state Public Utilities Commission to stay in business within TCID's service territory.

Hearings on the issue are scheduled to begin May 11 in Carson City.

TCID's suit also claims Sierra Pacific sent a disparaging letter to TCID's bond counsel in an effort to jeopardize $30 million in financing TCID is trying to secure.

The bond counsel now says the $40 million in financing for improvements and start-up costs is on hold until the PUC decides which operator gets the certificate to provide power, the Lahontan Valley News and Fallon Eagle Standard reported.

"As a direct result of the malicious and oppressive actions of Sierra, TCID has been prevented from acquiring the financing necessary to complete the acquisition of improvements," the suit said.

Further, it alleges Sierra Pacific has been contacting big electric users within the district and "falsely informing them that TCID is unreliable, mismanaged and out to gain a profit for the private owners of TCID."

TCID also maintains that under the expiring lease, Sierra Pacific is obligated to turn over equipment, right of ways and customers.

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