Editorial: Private talks are troubling

Friday, March 17, 2000 | 10:09 a.m.

Gov. Kenny Guinn did the right thing on Feb. 28 when he called for a summit of all the key players involved in trying to open up the electric power industry to competition. Nevada state regulators had experienced difficulty in reaching an agreement on the rules to establish electric power deregulation, so Guinn thought his office might be able to help develop a cohesive plan to overcome the legal and technical obstacles of deregulation. Since that announcement there have been private meetings involving the governor's staff, electric companies, the state Public Utilities Commission's staff and the state consumer advocate.

But this week it was revealed that the scope of these meetings had expanded, a development that could be troubling for ratepayers. The Sun's Richard N. Velotta reported Wednesday that Nevada Power's parent company also is seeking to resolve a controversial rate case in these meetings, which include Guinn's chief of staff. The problem with this, though, is that the Public Utilities Commission already has rejected the company's bid to increase rates by $110 million. And, under Nevada law, the next step to lodge an appeal is through the courts, not the political process.

A spokesman for Guinn contends that Nevada Power's deferred energy case is connected to the other issues involving deregulation, so it's all right to discuss the increase. The fact is, however, that deregulation has not yet started and Nevada Power is still a monopoly under strict regulation. Under Nevada's system that oversees utilities, regulators are supposed to be insulated from outside political interference. If, however, these various groups (with the governor's imprimatur) decide to ask the utilities commission to reconsider its earlier rejection and now approve a rate hike, it would be an extraordinary politicization of a rate case.

While any agreement reached at the governor's summit meetings still would have to be approved by the three-member commission, the involvement by the governor's office in these negotiations would place extraordinary pressure on the commission to reverse itself, setting the stage for a back-door rate increase. The governor and his representatives, then, are inviting danger by being involved in any talks dealing with the setting of power rates.