Water authority facing energy shortage

Wednesday, Oct. 18, 2000 | 11:13 a.m.

The power bill to pump water from Lake Mead to the Las Vegas Valley has doubled in the past year, and the valley's primary water provider is trying to figure out how to keep from passing on the rate shock to consumers.

In fact, Southern Nevada Water Authority Director Pat Mulroy said Tuesday, the agency needs to prepare for a potential crisis that could come next summer if it can't secure enough power to pump and treat water for the Las Vegas Valley.

"We've got a power crisis in this state and in the West," Mulroy said. Soaring electricity prices are driving the bills higher for small homeowners and major suppliers alike. The water authority paid $40 million last year for power.

The water authority, the single largest electrical customer in the state, is scrambling to find enough electricity to pump and treat water to meet peak demands from customers while keeping homeowners' bills reasonable, Mulroy said.

Either the water authority finds a solution in the next few months "or next summer will be brutal if there is a lapse in the power supply," she said. The authority's board will consider the options Thursday.

It was close to rate shock this year. If water officials had not sealed power deals six months earlier, the authority's June power bill for delivering water could have reached $2.5 million on the spot market, Mulroy said. Fortunately, the electrical rate was set. The water authority shelled out $500,000 for that month.

The authority board has made it clear to Mulroy that residential customers need protection.

"If we don't solve the residential rates for delivering water, we could easily see a 50 percent increase in monthly bills," she said. "People never realize how much of their water bill goes for power."

In another two years, an ozone plant to treat the drinking water and improve its taste will demand even more power, she said.

"We are looking at every option," Mulroy said. Those options include the water authority building its own power generating plant. The agency was given separate authority by the 1999 Legislature to break away from Nevada Power as its sole supplier.

The authority is building a team of experts to protect Southern Nevadans from exorbitant rate hikes, Mulroy said.

Last year the water authority hired former state consumer advocate Fred Schmidt, who is an expert in the arcane language of utility regulation.

On Thursday the authority board is expected to approve a $130,000 contract with Sig Rogich and his Rogich Communications Group. Rogich is an influential advertising executive and political consultant. His job will be to use his influence with legislators and regulators to protect residential water customers from higher monthly bills.

The recent decision by Gov. Kenny Guinn to deregulation of Nevada's electric industry until next September will help, Mulroy said. State regulators can keep a cap on Nevada Power rates for almost another year.

"There's no way we are going to solve our problems on the backs of residential customers," Mulroy said.