Friday, Aug. 30, 2002 | 4:18 a.m.
I'm a former Las Vegas resident (1954-60 -- it was a smaller town then) and current shareholder of Sierra Pacific Power.
I'm aghast at the response of Sierra Pacific management to the Southern Nevada Water Authority offer to buy Nevada Power Co. The offer of $1.2 billion is about $12 per share, 50 percent over the current share price. It would be very good for shareholders.
SNWA would also save Las Vegas residents a lot of money. Public agencies can finance utilities much cheaper than private companies, partly due to more favorable borrowing rates, but mostly because they do not earn a profit, and therefore do not pay any federal income tax. The 20 percent reduction in rates estimated by SNWA is consistent with the nationwide cost advantage of public utilities.
Is personal greed the problem? Last year Walter Higgins, the CEO of Sierra Pacific, was paid $1.3 million. Without Nevada Power, it would be a smaller company with smaller executive salaries, just like before the merger.
That kind of behavior is not in the interest of either ratepayers or shareholders.
No doubt, the SNWA offer will need study and perhaps some refinement. The basic concept -- bringing community ownership to an essential public service -- will save people in Las Vegas a lot of money, and provide for more local control over energy policy. It works in Seattle, it works in Los Angeles, and it can work in Las Vegas. And, it would also be good for me -- a Sierra Pacific shareholder.
JIM LAZAR Olympia, Wash.
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