Editorial: Winding our way to stability

Friday, March 9, 2001 | 4:01 a.m.

It won't be a salve for the pain that electricity customers now feel over their high bills, but Nevada Power's parent company made an important concession last week that could help stabilize its long-term energy costs and, more importantly, for its customers. Sierra Pacific Resources executives told a Senate panel that it now agrees that selling its power plants would have a negative impact on Nevada consumers over the next five years.

Previously the utility had said it wanted to sell the plants, noting the boost could give it a much needed infusion of $872 million. Besides, the company noted, it had guarantees with the potential buyers to allow Sierra Pacific to receive low electricity prices for the next two years. But residential customers and businesses justifiably were worried that new out-of-state owners would gouge them just as has happened in neighboring California when that state required its utilities to sell its power plants as part of its deregulation plan. Nevada State Consumer Advocate Tim Hay said divestiture would cost consumers at least $915 million in higher rates over the next five years, possibly as much as $3.5 billion.

It's unclear what was behind Sierra Pacific's sudden reversal on legislative efforts to impose a moratorium on the sale of its power plants. It's possible the utility wanted to show it was a good corporate citizen by acknowledging the toll the sale could have on consumers. Or it simply could have been, as some skeptics might suggest, that the utility realized that it is likely the Legislature will try to block the sales anyway -- so the company decided it should board the moratorium train before it left the station. Whatever was the real motivation, this is a positive development. It should remove one of the key stumbling blocks facing Nevada state legislators as they try to agree on solutions that will help the state weather this energy crisis. For that matter, it also will aid in devising a coherent, long-term energy policy for Nevada's future, a policy that should be mindful of the suffering that California has had to endure from its deregulation debacle.