Editorial: Electric nightmare unfolding

Saturday, Jan. 6, 2001 | 2:49 a.m.

Gov. Kenny Guinn's energy commission last week recommended that Nevada continue on its path to deregulate the electric industry, but the panel couldn't reach a consensus on the $64,000 question: When should electric deregulation begin? No matter what Guinn believes should be done in Nevada, ultimately what happens in California will affect deregulation here. And what California is witnessing now is a meltdown. Residential customers have received huge hikes in their power bills, with the most dramatic boosts occurring in San Diego, where residential customers' electric bills have doubled. California's nightmarish experience could put the brakes on deregulation here for at least several years.

Still, Guinn is going to feel pressure to deregulate the electric industry from not only out-of-state companies that want to enter the market, but also from big businesses in Nevada that hope to shop around and buy cheaper electricity. Many of them also believe a firm date should be set to initiate competition in this market. Shell Energy, which wants to enter the market, believes deregulation should begin as soon as September. Starting deregulation on an arbitrary date is foolish, though. Target dates without meaning can needlessly result in hasty decisions by policymakers, who may fear a public backlash if they don't meet a deadline.

It is obvious now that California wasn't ready for such a radical experiment. Indeed, it appears deregulation in California could be scuttled just as it gets under way, as the public and politicians decry the skyrocketing rates that have accompanied it. One California state regulator acknowledged as much Thursday, when the California Public Utilities Commission approved an emergency rate hike, a boost that wasn't supposed to happen under deregulation. "We are voting the epitaph for deregulation in California today," PUC Commissioner Carl Wood said. "Deregulation is dead."

At one time Nevadans were told that unless they quickly implemented deregulation, this state would be left behind California and others in the West, which would be able to command cheaper electricity. So the Nevada Legislature put in place a framework to deregulate the electric industry, but last year Guinn wisely postponed the start date when it was clear this state wasn't ready. If and when competition is allowed, all Nevadans -- including residential customers -- should have the opportunity to benefit from lower rates. That day now seems to be a long way off, but for many residential customers and small businesses that is just as well.