Panel agrees to freeze Nevada electric rates

Friday, April 9, 1999 | 11:08 a.m.

CARSON CITY -- A Senate committee debated today whether power rates will be frozen for three years with the deregulation of the electric industry starting March 1, 2000.

The Senate Commerce and Labor Committee heard the freeze recommendation from its chairman, Sen. Randolph Townsend, R-Reno, who said this freeze would be effective only if the merger between Nevada Power Co., and Sierra Pacific Power Co., is completed.

Competition in the electric industry was due to start Jan. 1. The Townsend plan delays that for two months.

Exempted from this freeze is an expected rate filing by Nevada Power in July of about $40 million. Steve Rigazio, chief financial officer for the Las Vegas-based utility, said it would boost rates for a residential customer by 4-5 percent.

This increase, he said, is to recover past costs the utility paid in higher fuel costs.

This case would be the last one filed as the era of deregulation approaches and customers will be permitted to shop around for suppliers.

Come March 1, customers will be able to look for cheaper rates. And Townsend said "Some people may want higher rates because they want 'green power.' We're seeing that in California where 1 percent of the people left."

Under the Townsend plan, Nevada Power would be permitted to use its name on affiliates that may sell power and other services. The state Public Utilities Commission had adopted a rule that the name of the power company could not be expanded to associated companies. That regulation would be voided by the plan.

The rate cap was endorsed by Fred Schmidt, chief deputy attorney general in charge of the state Bureau of Consumer Affairs. This would help customers, he said, who may not have a choice of new suppliers or who don't want to move from either Nevada Power or Sierra Power, the two major electric suppliers in the state.

"This is an important protection," Schmidt told the committee.

The Townsend plan was debated as legislators faced today's deadline to move bills out of committee or see them die.