Editorial: Hoping to change the subject

Monday, Feb. 4, 2002 | 8:29 a.m.

There has been a storm of public protest over Nevada Power's proposal to raise its rates by $922 million. The opposition cuts across economic lines, uniting groups as diverse as residential customers and business executives. So in an effort to quell the controversy, last week Nevada Power said it wants to spread out the cost of its proposed rate hike over six years, instead of the three years it originally had asked the Public Utilities Commission to consider.

Nevada Power executives say that would cut the proposed 25 percent increase in half because it would be spread out over twice as long a time. But of course that's sophistry. The utility isn't scaling back its request -- consumers will just get dinged by Nevada Power over a longer period of time. The net amount collected by Nevada Power over six years actually would be $1.207 billion -- $922 million plus $138 million for the first three years' interest plus $147 million for the second three years' interest. The $147 million is of course not a factor if the increase is over three years instead of six.

It's a clever way to try to dampen opposition, but the reality is that the latest offering by Nevada Power still would hit customers hard, resulting in a water-torture financing scheme. The Public Utilities Commission shouldn't allow the latest financing ploy by Nevada Power to divert attention from the issue at hand, which is whether the $922 million is justified in the first place.

The state consumer advocate, Tim Hay, has said that Nevada Power paid $500 million to $700 million more for energy than it should have since late 2000, and so far Nevada Power hasn't made a persuasive case that its customers -- and not the company's shareholders -- should have to shoulder the burden. Nevada Power executives say the latest proposal is a way to ease the pain for its customers, but instead it looks like a cynical attempt to get as much of the utility's original $922 million request as it can.