Consumer advocate still fighting power rate hike

Monday, March 5, 2001 | 11:50 a.m.

CARSON CITY -- Despite a defeat last week, state Consumer Advocate Tim Hay says he's not throwing in the towel in his fight against a record $311 million electric rate increase for customers of Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno.

"We are going to pursue other legal avenues," Hay said after he voluntarily dropped a District Court suit Friday that sought injunctions to stop the higher rates from going into effect.

Hay sued the state Public Utilities Commission after it approved the average 17 percent increase on Feb. 23 for the two companies. He sought a temporary restraining order to stop the new rates from becoming effective Thursday.

District Judge Mike Griffin refused to issue the order and a hearing had been set for Tuesday to hear additional arguments.

But Hay said it would be "futile" to continue this suit, but other legal actions will be taken to invalidate the higher rates. And if he wins, he said the $852,000 a day the utilities are collecting will have to be refunded to consumers.

While he was not specific, Hay said the other legal actions will seek to show the PUC was wrong when it approved the rates without a full hearing.

Karl Walquist, a spokesman for the utilities, said, "The only reason we filed the application was to keep the lights on in Nevada and maintain a high level of service.

"We can't speculate on the consumer advocate's action, but we trust he wants the same thing," Walquist said.

Don Soderberg, chairman of the PUC, said it appears Hay "did an about-face." He said he did not know whether Hay would refile his suit to correct some of the deficiencies outlined by Judge Griffin.

Traditionally, the PUC takes evidence and then makes a decision whether to permit the higher rates. But in this case, the utilities commission said an emergency exists. And it suggested that without the instant approval, there could be rolling blackouts similar to California because the utilities would not be financially able to purchase power.

If the rates are not warranted, Soderberg said refunds would be ordered. The PUC holds a pre-hearing conference on the case on March 23 to hear motions and to set the ground rules for the full hearing on the evidence.

One pending motion was filed by Hay who says the application by the two utilities was illegal. The law does not permit a utility from filing a rate increase to offset higher fuel costs within 30 days of another application of the same nature.

Hay said both utilities filed applications in mid-January and the companies than filed the present case on Jan. 29. Hay believes that is grounds for dismissal. The PUC has allowed 23 companies, most of them mining or gaming, to intervene in the case. Hay hopes to find allies in this group to bolster his claim.

Among the companies that want to be part of the rate case are MGM MIRAGE, Park Place Entertainment Corp., Mandalay Resort Group, Nevada Energy Buyers Network, the Southern Nevada Water Authority, Sprint, Union Plaza, the El Cortez, the Gold Spike, the Las Vegas Club, Western Hotel & Casino and Bonneville Square Associates.

These parties have until March 16 to file legal briefs whether the rate filing complied with the law and whether it violated the so-called "global settlement," which permitted the utilities to raise rates every month to recover part of the higher costs it paid for fuel.