Regulators delay action on Nevada Power issues

Friday, Dec. 17, 1999 | 11:13 a.m.

Two separate Nevada Power Co. electrical rate issues stalled in Public Utilities Commission sessions Thursday.

A hearing on a controversial flat-rate charge for distribution service was continued to next month to allow more time for regulators, intervenors and the utility to hammer out compromises that can be reviewed by the full commission.

About 24 intervenors have joined Consumer Advocate Fred Schmidt in reviewing the case, which is now set for a hearing Jan. 6. Intervenors in the case include major customers, competitors and shareholders. Schmidt's office, a vocal critic of the plan, is intervening on behalf of Nevada consumers.

Critics of the controversial plan fear it will discourage competition in the electrical industry when that begins in March.

Under the Nevada Power proposal, any single-family home that changes service to a Nevada Power competitor would be assessed a charge of $24.74 a month for their use of the distribution system.

Distribution lines are the power lines that connect substations with homes and businesses. The distribution system will stay regulated so that all the power companies entering the market when competition begins in March won't have to put in their own power lines to provide service.

Customers who stay with Nevada Power would not be affected, which is why critics say the plan could hurt competition.

In a separate issue in a regular PUC meeting, a split vote by the commission on Nevada Power's application for a $110 million increase in rates on deferred energy costs put that proposal on hold.

Recently appointed Commissioner Richard McIntire, who formerly worked on the PUC staff, did not vote on the matter since he helped form the staff's recommendation. Commission Chairman Don Soderberg and Commissioner Judy Sheldrew split their votes.

At issue were amendments to Nevada Power's application for increased fuel and purchased energy expenses -- the annual fuel costs the utility can pass through to consumers. In the amendment, the company sought one $110 million increase to cover the three years during which electricity rates are frozen as part of the transition to competition instead of a $50 million increase for one year.

Under the $110 million proposal, residential rates would climb 15 percent. Under the $50 million plan, they'd go up 10 percent, said Bill Branch, director of rates and regulatory affairs for Nevada Power and its parent company, Sierra Pacific Resources Inc.

As part of the amendment, Nevada Power sought a switch in the "test date" used to determine how much fuel costs changed.

The PUC staff urged rejection of the amendment based on the proposal to change the test date.

Because of the tie vote, Nevada Power's original deferred energy case will be heard as planned in late January.

In other action on the PUC's agenda meeting, two more companies that had applied for licensing to sell electricity in the state were approved. Avistar Inc., doing business as PHASER Advanced Metering Services, and Coral Power LLC were licensed. They become the third and fourth companies to be approved to conduct business when competition begins in March.