Temporary regulator named to get electric cases moving

Thursday, Jan. 13, 2000 | 10:40 a.m.

PGE Merger at Issue

The Public Utilities Commission of Nevada should not have jurisdiction over Sierra Pacific Resources Inc.'s acquisition of Portland General Electric Co., the Nevada company says.

Sierra Pacific, parent company of Nevada Power Co., filed a petition requesting that the PUC not intervene in the $3.1 billion merger announced in November.

Reno-based Sierra Pacific argued that the transaction will be overseen by the Oregon Public Utilities Commission, the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission as well as the Securities and Exchange Commission.

The Nuclear Regulatory Commission is involved because the transaction involves a decommissioned nuclear power plant.

Sierra Pacific said PGE's assets are entirely in Oregon and none of the financing of the stock and cash deal would affect Nevada ratepayers.

PUC officials said they have received the petition and would review it before scheduling a hearing.

CARSON CITY -- Jo Ann Kelly, who spent 11 years as a member of the state Public Service Commission, was named by Gov. Kenny Guinn to be a temporary commissioner to break a deadlock on important cases that threaten to delay the start of open competition among electric companies on March 1 in Nevada.

The Las Vegas woman will replace Commissioner Richard McIntire, who cannot hear cases involving the merger of Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno and the application by Nevada Power for a $100 million increase in rates before competition starts.

There's an impasse between Commission Chairman Donald Soderberg and Commissioner Judy Sheldrew on these cases.

Guinn said Kelly was the "prefect candidate " for the temporary position because of her experience and her integrity. She will fill in for McIntire on an expected eight cases. McIntire disqualified himself because he had worked on the staff of the commission, taking position on the issues.

Kelly, who was the first commissioner based in Las Vegas, was first appointed by then-Gov. Richard Bryan and then reappointed twice by Gov. Bob Miller.

During her time on the commission, Kelly participated in the breakup of AT&T, new competition in telecommunications, new federal orders opening natural gas markets and the initial talks on retail competition for electric service. She presided over more than 235 formal utility regulatory proceedings and proposed final decisions before her retirement in 1996.

The 1999 Legislature said open competition could begin as early as March 1 this year if Guinn agrees.

But he hinted Wednesday that Nevada may not be ready.

The governor wants to push for the March 1 date, but if the commissioners "don't feel comfortable" with that timetable, he won't start competition.

"I am not going to do something we are not ready to do because it's too complex and we have had this system for years and years and years," he said.

Adding to the uncertainty of hitting the March 1 date, is a "new wrinkle in this whole thing," Guinn said.

The Federal Energy Regulatory Commission has published a regulation, suggesting the states get together in a regional coalition to set up an independent group to oversee the power distribution systems. The governor said the federal agency wants the states to have a proposed plan for a regional distribution system by September 2000 and to be ready to implement it by March 2001.

"Now that changes a lot of things what we're doing," Guinn said. "So whatever we're doing, we can't come in conflict with this or it will cause us to do all the work for no good or value."

The PUC approved the merger of Nevada Power and Sierra Pacific but set certain conditions, including the sell-off of their generating plants. The commission must now determine if the two utilities are complying.

The two utilities and Consumer Advocate Fred Schmidt and the staff of the PUC have signed off on a plan to allow the two companies to continue to control the transmission of electricity temporarily without an independent group overseeing it.

Sheldrew complained this would give the two utilities a big advantage over other companies that want to enter Nevada and compete to sell power. It would allow the utilities to decide the priority in shipping electricity to customers.

Alternative suppliers could receive a low priority to get their electricity to their customers with the two utilities in charge of the transmission. Sheldrew says this could discourage customers from leaving the two utilities.

This proposal would only be temporary, said Schmidt, and the federal agency would have oversight over the transmission.

Big electric users want to see open competition as soon as possible so they can shop around for an alternative supplier, rather than the present utilities. But small customers and homeowners are not expected to find many alternative suppliers willing to serve them initially.