Letter: Nevada Power shareholder asks wrong questions

Sunday, March 5, 2000 | 9:09 a.m.

If Mrs. Newman is unhappy about the record low stock prices of Nevada Power Co. (which is obviously what her letter really is about), perhaps she needs to direct some tough questions to the company's management about the bad decisions they have made instead of trying to solve the problems of the company on the backs of Nevada ratepayers. Her whining about the Nevada Public Utilities Commission and large gaming customers, who reasonably hope to see lower power bills as a result of competition in the electric power industry, is pathetic and has nothing to do with the real problem.

Maybe Mrs. Newman should ask Nevada Power's management why they merged two companies that have more differences than similarities -- by the way, not one single interconnecting line between their two systems. Obviously, Wall Street did not think it was such a good idea. The stock went down.

Then perhaps Mrs. Newman should inquire why management thinks buying Portland G&E, a company which has no possible synergies with either Sierra Pacific or Nevada Power, is such a good idea. Maybe Mrs. Newman needs to wonder why it is a good idea to pay a $1 billion premium for PG&E and why it makes sense for Nevada Power to incur an amount of debt that almost exceeds how much the entire company is worth today. Obviously investors did not think it was such a hot idea. The stock went down more.

Finally, maybe Mrs. Newman needs to think about whether good managers file for a $110 million rate increase (after telling the Nevada Legislature they wouldn't), but didn't think it was important to tell the financial analysts there might be some risk associated with that "strategy."

RANDLE PHELPS

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