Legislator lobbies for deregulation power lines ‘cop’

Thursday, April 13, 2000 | 10:43 a.m.

Townsend, chairman of the Senate Commerce and Labor Committee, helped write legislation that calls for opening formerly regulated monopoly power companies to competition.

Gov. Kenny Guinn has delayed the start of competition but is expected to set a new date after state regulators resolve key issues.

"There are companies waiting at our border who want to enter the market and bring the best services they can offer to Nevada," Townsend told the Public Utilities Commission during a meeting Wednesday.

"However, they are not coming unless they view Nevada as a healthy, vibrant and independent free market," Townsend said.

To foster that kind of market, Nevada must establish the Mountain West Independent Scheduling Administrator, he added.

Mountain West is designed to serve as a traffic cop, controlling competitors' access to transmission lines owned by Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno. It has received conditional approval from the Federal Energy Regulatory Commission.

The nonprofit organization has been in limbo because of funding issues and needs about $16.4 million for the first three years of operation.

A typical customer who uses 1,000 kilowatt hours per month would pay an extra 29 cents on his monthly bill to pay for Mountain West, said Larry Blank, an economist with Tahoeconomics in Carson City.

Townsend suggested the two investor-owned electric utilities, subsidiaries of Sierra Pacific Resources, lend money to start up and operate Mountain West. He recommended that state regulators guarantee the company will be repaid for this loan if Mountain West fails to pay it off.

At the same time, he called for keeping the state's commitment to customers to cap the rates for Nevada Power and Sierra Pacific Power for customers who stay with the utilities during the first three years of competition.

Public Utilities Commissioner Richard McIntire asked whether the utility would give control of its transmission lines to Mountain West. If Sierra Pacific did transfer control, it still would retain transmission line ownership and retain any profits from operation of the transmission system.

"If this thing gets off the ground, are you going to double-cross the Mountain West ISA?" McIntire asked, questioning if the utilities would refuse to transfer control of the transmission assets to Mountain West.

"We don't know that we would commit to transfer our assets to this organization right now," said Duane Nelson, a staff attorney with Sierra Pacific.