Panel votes on Nevada deregulation guidelines

Brendan Riley

Friday, Jan. 5, 2001 | 9:54 a.m.

CARSON CITY - Nevada should hold off on electric utility deregulation until it's clear that consumers won't face the price spikes now occurring in neighboring California, a panel recommended Thursday.

The 17-member energy policy committee formed by Gov. Kenny Guinn was divided on specifics - but overwhelmingly backed the concept of no deregulation until there's a "beneficial environment" for consumers.

JoAnn Kelly, chairwoman of the committee, said that given the confusion and questions that now exist, it's unlikely that deregulation could occur in Nevada before 2003 - "and that's hopeful."

Kelly added that panel members agreed the "beneficial environment" would have to be regional, and not confined just to Nevada.

"What happens in California impacts us tremendously," Kelly said. "Whether they can fix their system will make a big difference. We can't stand alone in any process because we are the ant and they are the giant."

California's deregulated electricity grid, stressed for months by high demand, low reserves and tight imports, has been pushed to the brink of widespread blackouts. The need for electricity has sent power prices soaring.

Nevada's energy panel made other recommendations, including one from Consumer Advocate Tim Hay to allow some bigger electricity users to go to a deregulated market - if their moves lead to new power plants or supplies that add to Nevada's net power supply.

Kelly said one example of a plan that might qualify for early deregulation under the committee's proposed guidelines would be a power plant discussed by some of the major mine operators in northeastern Nevada.

Another recommendation was to encourage power providers from outside Nevada to enter the state's market after submitting detailed proposals. But the underlying principle would remain - consumers must benefit rather than face problems such as the skyrocketing prices and power shortages that are hitting California.

The panel also suggested that the state review existing permit processes to assure there are incentives to build power plants in the state and to ensure that at least some of the power generated by new plants in Nevada stays in the state.

California-based PG&E has plans for a new plant in southern Nevada - but the initial plan was to send its power over the border to California.

The committee also said the state should develop a broad conservation policy that would help increase energy efficiency of new homes and commercial buildings, and help in efforts to retrofit older structures.

The panel will submit written recommendations to Guinn by Jan. 15, and Guinn is likely to use some of the proposals in his Jan. 22 state-of-the-state address to the Legislature.

While there's a split on some of the plans, Kelly said the goal was to deliver as much useful information to the Republican governor as possible.

Guinn had delayed deregulation earlier, and tentatively had proposed to let the electric markets open up next September - but California's problems prompted him to form the advisory panel.