Nevada PUC enters power line rate case

Thursday, March 23, 2000 | 11:38 a.m.

The Public Utilities Commission vote Wednesday stems from Sierra Pacific Resources' proposed purchase of Portland General Electric in Oregon for $3.1 billion.

Sierra Pacific and Portland General filed a proposed tariff plan with the Federal Energy Regulatory Commission on March 3 that would set rates and rules for use of high-voltage transmission lines by Nevada Power Co. of Las Vegas, Sierra Pacific Power Co. of Reno and Portland General Electric.

Sierra Pacific Resources is the holding company of Sierra Pacific Power and Nevada Power.

Jeff Parker, general counsel for the PUC, warned of potential subsidies to Portland General customers, but Faye Andersen, a Sierra Pacific spokeswoman, disagreed.

The federal agency has been advised that a customer could use transmission lines of two utility subsidiaries and pay only the transmission rate of the utility where the power is consumed. Experts call these a "zonal rates."

The transmission rates are lowest in Oregon at about 81 cents per kilowatt month, compared with $1.21 for Nevada Power and $2.86 for Sierra Pacific.

Parker said the concern is that a competitive marketer could ship power from Sierra Pacific's service area in northern Nevada to Portland, Ore., and pay only the 81-cent rate. Power coming from Portland to Reno would have the higher $2.86 rate.

Instead of zonal rates, the PUC staff recommended a blended rate of $1.63.