Guinn delays decision on electric deregulation

Wednesday, Sept. 27, 2000 | 10:54 a.m.

CARSON CITY -- Gov. Kenny Guinn says he wants to talk to more people before he makes a decision on whether to open the Nevada market to electric competition.

Last week, the governor said he would make an announcement Wednesday or Thursday of this week. But he said Tuesday he wants to talk with representatives of the mining industry, the casinos and the independent suppliers who would be allowed to sell power in Nevada under deregulation.

The decision will come sometime next week.

The governor said he has already met with officials of the utilities, state Consumer Advocate Tim Hay and one representative from the gaming industry. But he said he wants to talk to more people in the casino business who are pushing deregulation to permit them to seek lower rates.

Nevada, Guinn said, is not under deregulation now and he indicated that the recent rate increases of Nevada Power Co. in Las Vegas and Sierra Pacific Power Co. in Reno are permitted.

And if those in the state Legislature believe there is a violation of law over the rate hikes, they have the ability to take action, he said.

Guinn said there was testimony before the 1999 Legislature by former state Consumer Advocate Fred Schmidt that the utilities would be able to pass along to their customers the higher cost of fuel and purchased power under the deregulation law.

This is contrary to what Assembly Assistant Minority Leader Barbara Buckley, D-Las Vegas, said Monday. She read from the transcripts of legislative hearings in which she quoted Schmidt as saying "rates are not going up. There is a possibility of them going down. The small customer is clearly protected."

While there may be a ban in the law, the utilities, the big casinos in southern Nevada, Consumer Advocate Tim Hay and the staff of the state Public Utilities Commission hammered out a "global settlement" permitting Nevada Power Co. to raise rates every month to recover the increased cost of its fuel.

So far Nevada Power has announced four increases totaling 8 percent. These are not being considered by the utilities commission prior to them taking effect.

The utility will hire an auditor after six months to check to see if these pass-alongs are justified. The commission can then examine the increases to see if they are reasonable.

Democratic lawmakers from Las Vegas have called on Guinn to ensure that ratepayers are protected if he decides to allow competition for Nevada Power and Sierra Pacific. They suggest the utilities commission should first review the rate request and decide if it is justified. The "Global Settlement' permits the rates to go into effect automatically.

When he was president of Southwest Gas Corp., Guinn said the utility did not get the rate increase money "right away. They (the utilities commission) had a long time to audit us. I don't know what they are doing today. I don't have the right to go over there today and look at anything that relates to a rate increase."

He said he's just involved in the policy, such as deciding whether deregulation should go forward.

Figures computed by the staff of the utilities commission shows rates could escalate by 64 percent to customers in Southern Nevada by March 2003 if the maximum increase is taken every month.