Consumer Advocate dismisses rate case

Friday, March 2, 2001 | 4:15 a.m.

CARSON CITY -- In a surprise move, State Consumer Advocate Tim Hay dropped his district court suit Friday to stop a $311 million electric rate increase for consumers in Las Vegas and northern Nevada.

But he said he will pursue other legal efforts to invalidate the 17.7 percent higher rates allowed for Nevada Power Co of Las Vegas and Sierra Pacific Power Co., of Reno.

Hay maintains the application for higher rates was "legally defective" and the state Public Utilities Commission wrongfully approved the increase.

He sought a temporary restraining order from District Judge Mike Griffin last Wednesday to stop the rates from taking effect on Thursday. But Griffin denied the request and allowed the companies to start collecting an additional $852,000 daily from consumers. Once he lost that preliminary fight, Hay said it would have been "an uphill battle" to convince the judge to issue any order in the future to stop the rate increase.

Hay said other legal efforts would be taken that, if he wins, will require the utilities to repay the consumers the extra money they are collecting.

After Griffin's initial refusal, a hearing had been set for this Tuesday to continue the arguments but a court spokeswoman said that has been cancelled.

Chairman Don Soderberg of the Public Utilities Commission said the action by Hay is "an about face" on his previous position.

"I don't know if he intends to refile it to fix the deficiencies," said Soderberg. Judge Griffin told Hay that there were some defects in his filing that needed to be corrected.

Sierra Pacific Resources Inc., the parent company of the two utilities, said the rate increase was needed to allow it to continue to buy fuel. Lawyers for the utilities said that a delay of the rate increase would hurt negotiations with bankers for a line of credit to buy fuel. And they suggested there could be blackouts similar to California because of a lack of fuel.

The PUC had approved the rate increase without holding hearings to take evidence pro and con. Soderberg said a pre-hearing conference has been set for March 23 to take up preliminary motions and to map out the procedures that will be followed.

One of the motions comes from Hay who says the case must be dismissed.

Hay said his legal action could force the PUC to dismiss the case and order refunds to the customers.