Legislature eyes overhaul of utility regulatory system

Tuesday, March 27, 2001 | 10:50 a.m.

CARSON CITY -- An Assembly energy committee, seeking to turn back the clock on deregulation, is calling for an overhaul of the state Public Utilities Commission and a return to the system of regulating electric rates.

Assembly Bill 661, introduced Monday by the Special Assembly Committee on Energy, would force Nevada Power Co. and its sister company, Sierra Pacific Power, to open their books for a financial examination and would require them to apply for general rate increases.

In addition, the bill would require the three members of the utilities commission to be elected rather than appointed.

"We feel power rates should be completely examined in a general way, and this has not been done since the early 1990s," Assembly Majority Leader Barbara Buckley, D-Las Vegas, said. Buckley said the bill would give regulators a chance to look at the entire finances of the companies and determine, among other things, whether their practices such as fuel purchases and investments were prudent.

The commission would then set what it believes is a fair rate, eliminating the monthly rate increases allowed under the so-called "global settlement" of last summer plus the 17 percent rate hike that took effect March 1.

"This will eliminate the cloud of suspicion over Nevada Power and Sierra Pacific and force the books to be open," Buckley said.

After the rates are brought in line, the utilities could submit deferred energy requests every six months to recover the rising cost of fuel.

The periodic requests, called deferred energy accounting, were prohibited after the 1999 Legislature voted to allow deregulation -- a plan that was recently put on hold.

Assemblyman Doug Bache, D-Las Vegas, chairman of the special committee, said the appointed utilities commission has brought Nevada "into its present mess."

While some blame the Legislature for the present energy problems, Bache said he wants to focus on the commission.

Electing the three members -- one from each congressional district -- "means they would be more representative of the general public if elected by the general public," Bache said.

The bill also allows the state to issue up to $300 million in revenue bonds to help finance construction of renewable energy generating plants. Buckley said that provision was suggested by Assemblywoman Sheila Leslie, D-Reno.

The bond money could not be used for building nuclear power plants, Bache said.

Provisions in the bill set up a commission on renewable energy to adopt a plan for the conservation and efficient use of energy. The bill also calls for a stepped-up program of home weatherization for low-income families.