Editorial: Cautious approach is best way

Tuesday, Feb. 29, 2000 | 9:40 a.m.

Gov. Kenny Guinn's decision Monday to postpone the start of deregulation, which had been scheduled to begin Wednesday, was not a shocker. Nearly all involved in the arduous process of scrapping a government-regulated monopoly, which has lasted nearly a century, believed that it wasn't realistic to initiate competition among a variety of electricity providers with so many questions still unresolved.

Guinn noted a number of complex problems that have yet to be addressed: creation and financing of an independent administrator to oversee the electric distribution system; establishment of rates for those using the distribution lines; and solving the task of access to the transmission lines by companies that want to come into Nevada to compete. It is clear, then, that the governor's decision to delay deregulation's commencement was the right one.

It was newsworthy, though, that Guinn called for a summit to be held soon in an effort to resolve some differences, including the need to shape a cohesive plan for overcoming legal and technical obstacles posed by deregulation. "Many of the problems currently standing in the way of electrical deregulation are out of our hands and must be decided by the courts or federal government, so there are certainly limits on what we can achieve at this meeting," Guinn acknowledged in a statement. "However, I want to make sure that all parties are communicating effectively and working toward the same goal."

While Guinn didn't mention it directly, one of the difficulties in reaching a consensus on how to deregulate the industry has been the feuding among members of the Public Utilities Commission, the three-member body that has the final say on establishing the ground rules for deregulation. Although this tension has eased somewhat recently, getting the groups affected by deregulation to meet outside of the commission's chambers -- to see if they can hash out some of the seemingly intractable issues -- can't hurt. But Guinn, a former Southwest Gas executive, must be careful that he personally doesn't get too involved with negotiations if he is to avoid any hint that he is doing the bidding of the utilities.

Deregulating such an important industry must be done with caution. In today's world, society comes to a grinding halt if the power goes off. In addition, the costs we pay for electricity can have a huge impact on our economy -- the higher the costs, the more we all pay for goods and services. Postponing deregulation isn't going to forever derail competition. A far worse policy would be implementing deregulation only to see chaos unfold instead. Guinn is striking the proper balance. He is prodding the commission and those representing consumers, power companies and businesses to get moving. But at the same time the governor wants it done in a rational way that allows competition to be ushered in so that even such a radical change -- from a government-overseen monopoly to a market-based approach -- can result in a relatively smooth transition.