Utility rate caps criticized

Erin Neff

Wednesday, Feb. 7, 2001 | 11:28 a.m.

CARSON CITY -- Additional rate hikes and a whopping cost to the state could prevail if legislators halt the sale of power plants in an effort to shore up Nevada's electricity supplies, energy officials told lawmakers this morning.

The Senate Commerce and Labor Committee heard continued testimony about how the rate caps imposed a settlement between power companies and the Public Utilities Commission are not generating enough money.

Walt Higgins, chief executive of Sierra Pacific Resources Corp., told the committee Tuesday that halting the sale of nine power plants would cost the state $875 million and ultimately hurt consumers.

"The economic deal that we've struck right here is not adequate," said William Peterson, general counsel for Sierra Pacific Resources. "We're going to die with it."

Since monthly consumer increases are capped by the settlement, Sierra Pacific cannot recoup all of its expenses and is losing significant money, Higgins said.

"The company has to (pay for) anything that's not a right in the settlement," said Neill Demmick of the PUC.

Now the Reno-based energy company said it may ask for additional increases.

"We're desperate," Peterson said. "We need help."

Harvey Whittemore, lobbyist for the Nevada Resort Association, said he believes the settlement may limit the company's ability to ask for more hikes.

"We believe the caps in the stipulation are those that the company must move from only by additional legislation or litigation," Whittemore said this morning.

Consumer Advocate Timothy Hay said his office planned to file objections to any additional rate increases, in part because he is skeptical about some of the company's projections.

Perry Comeaux, the state's director of administration, told the committee there was little his office could do to predict what type of impact the continued energy crisis will have on the state.