Guinn to make last-minute decision on deregulation

Wednesday, Feb. 9, 2000 | 11 a.m.

CARSON CITY -- Gov. Kenny Guinn is going to hold off until the last minute before announcing whether the new era of electric deregulation starts in Nevada on the suggested date of March 1.

"I've decided to wait right up until March 1," Guinn said Tuesday. "Deregulation will depend on how many outstanding issues they have."

He was referring to the state Public Utilities Commission, which is trying to get ready to allow companies to compete against Nevada Power Co. in Southern Nevada and Sierra Pacific Power Co. in Northern Nevada.

A "giant step was taken," he said, when the Federal Energy Regulatory Commission accepted a plan that would set up the Mountain West Independent Scheduling Administrator to operate the transmission lines to make sure that the new companies have access to the lines on a par with the two major utilities.

"That helps, so now you have a mechanism for a scheduler" that will determine when and how companies can transmit power to customers.

But there's no financing so far for this independent administrator. The Mountain West administrator has advised the PUC it may be September before it is operational.

Still unresolved is Nevada Power's request for a $44 million rate hike. Hearings are scheduled later this month. This rate must be in place before competition can start. The commission voted 2-1 last week to deny the application of the utility for a $110 million rate increase, but allowed the lower amount to be considered.

Another major issue hanging is that rates have not been established for use of the distribution systems in both the south and north.

Guinn's comments come on the eve of a hearing by the PUC to decide whether to accept a stipulation from the two utilities and the commission staff on the upcoming merger of the two utilities. Nevada Power and Sierra Pacific agreed as part of their merger to sell off their generating plants.

The stipulation sets the guidelines on how the two utilities will proceed. And it settles several other matters that affect opening the market to competition.

Guinn said, "I'm waiting to see how much progress they (the PUC) make ... those things that have to be in place before I can make a decision."

"If they tell me they can't meet the requirements, you cannot go there and be disorganized," he said. "It would be the worst thing in the world. I've had a number of people tell me they do not want to get into it until it is clear who has the responsibility for the fixed charges in terms of transmission and scheduling."

The governor said there's been no expressions of concern by the smaller users -- residential customers whose rates are frozen for three years. "They're feeling pretty comfortable," he said.

"You have some big users who are interested (in the open market) but they want to be sure it's well organized and they have someone available to rule if there is a disagreement between the transporter and the supplier."

As it stands now, most of the companies that have filed to supply electricity in Nevada are targeting the big users, rather than residential customers.