Nevada officials vow to prevent California-like crisis

Friday, Jan. 12, 2001 | 11:23 a.m.

Water district powering up?

The Nevada Electric Energy Policy Committee's report to the governor includes submissions from other interested parties, including one offered Thursday by the Southern Nevada Water Authority.

Clark County's primary water provider, which announced last month that it was considering getting into the power business, suggested in a position paper that the state establish a new model for providing power to consumers through municipalities or water purveyors.

The Water District also believes the concept of the "provider of last resort" for consumers who would not choose a power provider in a competitive market should be scrapped.

Possibly the biggest stumbling block on the Water District proposal is that it believes Nevada Power Co., which has begun selling its generation stations as a condition of its merger with Sierra Pacific Resources Inc., should keep them as a source of energy to the new electricity providers.

The Nevada Electric Energy Policy Committee cast its final votes Thursday, but instead of closing the book on a series of guidelines, it may have introduced a new chapter in the state's saga of whether to deregulate the industry.

The committee's recommendation to Gov. Kenny Guinn casts doubt on whether deregulation of the power industry, as currently envisioned, would work. But the final 90-page document gives Guinn a number of options on how to proceed, including position papers from other interested parties listing ideas ranging from immediate start-up to waiting until conditions are ideal.

Guinn praised the 17-member committee that met almost weekly since early November to develop a series of policies ranging from conservation and alternative energy sources to the controversial timing of entering a deregulated market.

He said he expects to make some of the points listed by the committee in his state-of-the-state address to the Legislature Jan. 22.

Guinn has twice delayed the start-up of deregulation in the state because of instability in the market. With energy markets in even greater disarray in California now, the likelihood of deregulation anytime soon is remote.

JoAnn Kelly, who headed the committee, said that questions raised by California's experience makes deregulation unlikely before 2003.

Large energy users like mines and casino companies have led the charge for deregulation because they want to negotiate with power companies to get the cheapest rates possible for their big electricity purchases. But the state's policy makers felt residential customers wouldn't benefit, or could end up subsidizing some of the gains achieved by the big users.

Guinn made it clear that he wants a policy that won't hurt residential customers.

"I look forward to a careful and thoughtful review of the committee's report and to utilizing it as we form an energy policy for the future of our state," Guinn said. "However, let's be clear on one point -- I will do everything in my power to protect individual ratepayers from the kind of skyrocketing utility rates we're seeing in California."

Kelly said she was pleased that Guinn is reacting quickly to energy policy concerns in the state and she said she is satisfied that her committee has at least brought a number of alternatives to the table for debate.

"The governor is very up to speed on utility issues," Kelly said of Guinn, a former executive with Southwest Gas Corp.

"The committee feels that it provided a number of different alternatives and that anything that stimulates discussion on different alternatives is going to be to Nevada citizens' benefit," she said.

For that reason, Kelly said the committee agreed to submit proposals from the Southern Nevada Water Authority and other sources, even though their positions were not fully debated by the committee.