Consumer advocate, Nevada Power at odds over rate increase

Monday, Dec. 31, 2001 | 11:27 a.m.

CARSON CITY -- A Nevada Power Co. executive says the company may face insolvency if the state Public Utilities Commission doesn't give the company a favorable ruling on its $921 million rate hike request.

But state Consumer Advocate Tim Hay says the utility is crying wolf again in an attempt to improperly influence the utilities commission.

Dennis Schiffel, senior vice president and chief financial officer for Reno-based Sierra Pacific Resources -- the utility's parent company, has prefiled testimony for the hearings next year by the utilities commission. If the utility doesn't get the rate hike, it will face dire credit and other financial problems, said Schiffel. That would put a crimp in its ability to purchase power and fuel. If that happens, Schiffel said Las Vegas-based Nevada Power would be "unable to assure that we can reliably meet customers' electric needs."

Hay, in a motion filed Friday with the PUC, said that testimony should be stricken. This case, Hay said, is whether the utility used prudent purchasing judgment in buying fuel and power at higher costs. It isn't about the financial condition of the utility.

The PUC intends to hold sessions on Jan. 15 and Jan. 22 in Clark County to give consumers a chance to express their views. And the commission will hold hearings in February.

Nevada Power wants to collect the $922 million -- a 21-percent increase -- over a three-year period to recover the cost of fuel and purchased power.

The utility is also asking for another rate increase of $42.7 million, which would boost a homeowner's rate by 7.9 percent. This is a general rate case. Hay said the financial condition of the company could be considered in this case but not in the deferred energy application.