Big rate increase approved for Nevada Power

Saturday, Feb. 24, 2001 | 10:43 a.m.

The Public Utilities Commission of Nevada on Friday approved a controversial rate increase for Sierra Pacific Resources Inc. that would raise the average Nevada Power Co. residential customer's bill by 17 percent.

The PUC approved the record increase in a 3-0 vote, citing its staff's financial analysis. That analysis showed that not approving an increase could have pushed Southern Nevada's primary utility company and its Reno-based parent company to the brink of financial disaster. Friday's move will increase Sierra Pacific's revenue from Nevada customers by $300 million per year.

Kirby Lampley, a senior policy adviser for the PUC, said the commission had two choices: It could raise the rates now and reduce them later if the increase proved to be too great, or it could do nothing and watch the company's creditworthiness collapse.

Commissioner Richard McIntire said California's inattention to its utilities' financial woes ultimately resulted in rolling blackouts for customers, which he said was unacceptable for Nevada.

"We need to keep the lights on (in Nevada)," McIntire said, "or we'll be conducting the hearing by candlelight."

Consumer Advocate Tim Hay's request to dismiss the rate increase will be considered at a later date by the commission after the agency's staff has time to review the impact of the emergency rate increase.

Walter Higgins, chief executive officer of Sierra Pacific, said the PUC's action rescued the utility company, which he said was "two weeks from having the checkbook run dry."

Under the new rates, a residential customer using 1,100 kilowatt hours of power a month would see rates climb $12.63 to about $97.90 a month.