Letter: Nevada Power pays price for ‘money grab’

Thursday, March 9, 2000 | 9:44 a.m.

The essence of Newman's letter is that all ratepayers, including seniors who are not Nevada Power Co. stockholders, should have been required by the Public Utilities Commission to pay a 15 percent rate increase in the interest of propping up Nevada Power's sagging stock price.

Nevada Power made its deal at the Nevada Legislature and now neither the company, nor its shareholders, want to live by the deal they made.

Although Nevada Power disingenuously claimed it was not earning a fair rate of return, the company agreed to have rates capped at the level they were last July 1. Nevada Power's management may not be the greatest, but who will believe that they would agree to have rates capped at a level that caused them to lose money for the next three years?

In that same bill, Nevada Power negotiated to assure that the Nevada Public Utilities Commission had no authority to lower its rates through a general rate case that was pending at the time. Why would the utility fear scrutiny by the PUC if it really was under-earning?

The trade Nevada Power made for a rate frozen at an unjustifiably high level was the end of being able to collect, dollar for dollar, all energy costs no matter how exorbitant. Nevada Power committed to take that risk and manage its energy costs.

But rather than honor the commitment it made to the Nevada Legislature, Nevada Power could not resist one last "money grab," as Commissioner Judy Sheldrew so aptly put it. The Public Utilities Commission should be applauded for not allowing Nevada Power to take advantage of Nevada ratepayers, not be criticized for not failing to allow this monopoly to have its way, no matter how outrageous its endeavor.

DONALD S. CRAMER