Reply to energy bill irks leaders

Tuesday, April 10, 2001 | 11:24 a.m.

CARSON CITY -- Legislative Democratic leaders Monday attacked a new version of an energy bill, saying it provides little protection for the consumer from runaway electric rates.

Their criticism came as the Senate Commerce and Labor Committee unveiled a 55-page amendment to Assembly Bill 369, which stops Nevada Power Co. and Sierra Pacific Power Co. from selling generating plants.

Senate Minority Leader Dina Titus, D-Las Vegas, said, "My main concern is that it (the bill) is brought to us from the backroom wheeler-dealers that brought us global settlement and the 1999 (electric deregulation) bill that I voted against."

Assembly Majority Leader Barbara Buckley, D-Las Vegas, said the bill approved by the Assembly to stop the sale of the power plants and end any chance of electric deregulation has been weakened by the Senate committee. The re-write of AB369 strips consumers of any protection, she said.

Sen. Randolph Townsend, R-Reno, chairman of the committee, said the plan is for the Senate to adopt the amendments Wednesday and pass the bill Friday, sending it back to the Assembly for agreement.

But Titus said nine Democrats caucused Monday, and there will be strong opposition to the bill. Republicans, however, have 12 senators.

The Senate amendment sides with casinos and mining interests who want to bail out of the present electric system and to look for cheaper rates.

Townsend said this "gets rid of the big users" and permits the remaining customers to enjoy lower rates to be charged to homeowners. The big customers would still have to pay their share of the debt incurred by the two utilities.

"We are not going to allow these big users to leave and have the residential customer pick up the stranded costs," Townsend said.

The Senate amendment delays the sale of the generating plants by two years. The Assembly bill called for a two-year delay and the plants could only be sold if there was an extreme financial emergency for the next five years.

"I believe it is very important that rates for Nevadans stay low and the best way to ensure that is to keep those power plants," Buckley said.

The Senate amendment permits the Public Utilities Commission to make the decision whether to allow the sale after two years. Buckley said there has been "some concern" about past ruling by the commission and that the utility legislation could become political.

"That's disturbing," she said.

The Senate amendment allows "deregulation to go forward without any consumer protection."

Buckley and Titus said there were no safeguards built in to the deferred energy accounting plan, which permits the utilities to recover dollar for dollar from the consumer for the higher prices paid for fuel or purchased power.

The bill requires the utilities must act "prudently" when buying fuel. "What does 'prudently' mean? That's up to the PUC to decide, and I don't trust them," Titus said.

Buckley said there is no definition in the amendment of "prudency," and there are no incentives to the utilities to find the cheaper power available for purchase.

The amendment freezes rate increases until next March for Nevada Power customers. At that time, the company could face increases of 25 percent or more.

Titus complained the bill does not have any regulation of the proposed four new generating plants to be built in Southern Nevada.

"As I understand it, two of four of those companies are under investigation in California. The 25 percent they say they are going to sell us is not on paper. It's some kind of a promise.

"And there's no talk about the rate we will get from those plants. So I don't think most of the Democrats will be voting for that proposal," she said.

In her "wheeler-dealer" comment, she referred to the closed-door negotiations last year between the utilities, gaming casinos, state Consumer Advocate Tim Hay and the PUC staff on a deal allowing the two electric companies to raise rates every month to recover part of their higher fuel costs. Many legislators thought a 1999 law imposed a ban on higher rates.

In the Senate amendment, Buckley said Nevada Power and Sierra Pacific Power could become "unregulated monopolies" in an era of opening up the electric industry to competition. They would own 50 percent of the power generated in Nevada and have the distribution lines." Other states, she said required affiliates to be formed to make sure one company did not own everything.

"I can't imagine supporting deregulation without consumer protection," she said.

The PUC is scheduled to act this week to stop the sale of the power plants, Townsend said. This bill will back up action of the PUC if it does block the sale.