Sierra Pacific complains to feds about caps

Friday, June 29, 2001 | 11:05 a.m.

The wholesale power price caps imposed by the Federal Energy Regulatory Commission to ease utility rates for consumers in California may have unintentionally penalized Nevada residents.

Walt Higgins, chairman and chief executive officer of Sierra Pacific Resources Inc., the parent company of Nevada Power, has been meeting with federal government and state political leaders this week to explain how the bailout of California has affected Nevada and 10 other western states.

Higgins said he has been briefing Nevada's congressional delegation and officials in other states about the matter and information is being given to the FERC's administrative law judge, Curtis Wagner, who is overseeing a case on rate disputes between California and its utilities.

Higgins explained that the FERC order forces Nevada Power and other utilities to sell power at two to three times below what they purchased it for in long-term contracts. There are other impacts: The new instability that has been created in the market may slow investors in putting money into building new power plants.

In a memorandum to Nevada leaders issued Thursday by Higgins, Nevada Power President Mark Ruelle and Sierra Pacific Power President Jeff Ceccarelli, the impact of the FERC's actions on the state were explained.

"We believe these impacts were unintended, but these rule in their current form are dangerous to our state," the memo says. "We cannot allow our state to be penalized for good planning while California is bailed out of their situation at our expense. We have been working aggressively with federal officials this week to make sure that any solutions in California are fair to Nevada and that our state is rewarded, rather than penalized, for having the foresight to manage this issue."