Editorial: Don’t hold us hostage over power

Friday, March 2, 2001 | 1:37 a.m.

Recently Republican Gov. Kenny Guinn and Democratic leaders in the Legislature unveiled competing plans on how to deal with both deregulation and the energy crisis that has gripped the West. While there was some initial sniping by each side regarding the other's plans, it is encouraging that there has been general agreement in several areas. For starters, there is near unanimity that deregulation won't be happening for years. This alone should produce a sigh of relief for Nevadans who have seen how rolling blackouts and spiraling energy costs have sapped California during its failed foray into deregulation.

And while Nevada has yet to implement deregulation, we have been zapped by higher energy costs. There have been allegations that wholesale suppliers have manipulated the market to cause an explosion in the price of both natural gas and electricity throughout much of the West. One factor that certainly has contributed to the rising costs has been a shortage of power plants to meet the energy demand of the fast-growing West. Energy conservation efforts can help ease demand, but that can only do so much. Arguably the biggest decision the governor and the Legislature will make regarding the long-term stability of energy sources is whether to cancel the pending sale of Nevada's power plants.

Sierra Pacific, the parent company of Nevada Power, currently is in the process of selling its power plants in this state, a condition of the merger between Sierra Pacific and Nevada Power. But now that prices are escalating beyond what anyone foresaw at the time of the merger, there have been calls to scrap the sales. Utility executives counter that they have two-year agreements with the potential buyers to receive electricity at lower-than market prices, resulting in savings to consumers of $872 million during that period. But these contracts are short-lived, setting up the prospect of Nevada's consumers being held hostage in the same way that Californians were when their utilities sold their power plants to out-of-state companies. State Consumer Advocate Tim Hay has said that if the power plants are sold, the added cost to consumers could be anywhere fr om $915 million to $3.5 billion over the next five years.

Reliable, low-cost energy is critical for the future well-being of this state's economy. Guinn wants state utility regulators to study the possibility of delaying the power plant sales, while Democrats and some Republicans want an immediate moratorium. Legislation already has been introduced in the Republican-controlled Senate Commerce and Labor Committee that would delay the sale of these plants. As long as any legal issues involved with scuttling this agreement can be resolved satisfactorily, the Legislature and the governor should require that Sierra Pacific keep its power plants.

As the Legislature and the governor have debated Nevada's energy future, the actions of state utility regulators in the past year haven't inspired confidence. The Public Utilities Commission has rolled over when Sierra Pacific has submitted its rate-hike requests, repeatedly saying that it is worried about the company's viability. There's nothing wrong with taking into account a utility's financial health, but the fact is that regulators should be meticulously poring over these requests -- not blindly approving them, saying that they will examine them later to see if they're justified. The governor and the Legislature need to light a fire underneath utility commissioners so that they again start acting like regulators, not pushovers. Deregulation is years away -- at the earliest -- so it's time that consumers be treated with a little respect, too.