Where I Stand—Mike O’Callaghan: Helping good neighbors

Friday, May 18, 2001 | 10:14 a.m.

Mike O'Callaghan is the Las Vegas Sun executive editor.

BLAMING CALIFORNIA for problems that affect everybody in the West doesn't really do much in the real world. Certainly Nevadans would be less than candid if they shrugged off the pain now being suffered next door. Tuesday, the residents of that state were hit with another $5.7 billion power rate hike. The Public Utilities Commission shifted the hike away from industry to homeowners to ensure the residents will still have a workplace to feed their families and pay for the gas in their vehicles.

It's the easy way out to say Californians brought this on themselves. Before any Nevadans make such a ridiculous comment they should remember that these same Californians are the people who helped create thousands of our jobs and gave us a booming economy. They are our neighbors who have found little, if any, help in their request for a temporary price cap from Washington, D.C., until they can meet the challenge of rolling blackouts and exorbitant power prices.

The obscene wealth gathered in by companies like the El Paso Corp., while our neighbors are suffering, isn't the American Way. Or is it? You probably wouldn't think it was obscene if several thousand shares of the corporation were in your stock portfolio. There is no doubt that many of the big shareholders in the gas and oil business are now in Washington, D.C., making policy.

Before believing there was an industry conspiracy to jack up energy prices we should wait and see what the Federal Energy Regulatory Commission and the courts find. Wednesday's New York Times' business section did give us a peek at what might be found. A FERC administrative law judge, upon first glance at an El Paso Corp. document, remarked "it certainly has statements in it that could lead one to believe there was an abuse of capacity." No matter what the conclusions, El Paso Corp. has added $3.7 billion to the cost of energy for Southern Californians because it owns the largest natural gas pipeline feeding that area.

California Gov. Gray Davis entered office only two years ago but tells us that several generating plants are now on the drawing board or under construction. He has taken the power crisis challenge and is moving swiftly to meet it, but he needs time.

An editorial in the New York Times takes a broad look at the situation in California and blames it on special problems including a "botched deregulation plan, a dilatory state government and predatory companies. They also include the Bush administration's curious refusal to help California by ordering a temporary cap on wholesale prices." The editorial points out that California spent $7 billion in 1999, $28 billion in 2000 and could spend $70 billion this year for electricity on the wholesale market.

Our neighbors are in trouble, but it isn't the first time nor will it be the last time. Allow me to predict that they will survive and eventually prosper again as they have in past years. When compared to nations, that state has the world's seventh largest economy. They have also been good neighbors and very important to much of Nevada's progress. We should let them know that the Silver State is a concerned and true friend when times are tough. The closer our local, state and federal elected officials work with them, the better off all of us will be during the coming months and years.