Neal accuses Nevada Power of conspiracy with Enron

Tuesday, Jan. 29, 2002 | 9:56 a.m.

State Sen. Joe Neal accused Nevada Power Co. of "getting in bed" with fallen Enron in an attempt by the Houston-based energy giant to manipulate what Southern Nevadans pay for electricity.

The maverick North Las Vegas Democrat, who drew a standing ovation Monday during a Public Utilities Commission of Nevada hearing at Winchester Community Center, accused Nevada Power of paying inflated wholesale prices for energy from other generators.

He said the utility's controversial purchases last year came after Enron and other major energy suppliers attempted to weaken Nevada's regulatory control over power companies. Neal said the effort began in 1997 in an effort to hike prices.

By contrast, Neal said that Utah residents saw a decline in electricity rates in 2001 even though that state has similar regulatory authority and investor-owned utilities.

"We're dealing with a company that got into bed with the crooks of Enron," Neal said of Nevada Power. "They want to loot our pockets and pay for a scheme they generated."

During a break in the hearing -- the fourth and final public forum regarding Nevada Power's proposed rate increase requests -- utility spokesman Paul Heagen said he respected Neal's opinion but believed the lawmaker's attempts to tie events in 1997 with purchases over the past year were erroneous.

"I don't see what anything he said could apply to late 2000 and 2001," Heagen said. "The market changed radically over the past year or two."

Nevada Power is seeking $922 million from Southern Nevada customers for energy already used and an additional $22.9 million for administrative costs. A state law gives the utility three years to recoup costs it said it incurred in order to supply power to Nevadans while California was suffering through an energy crunch last year.

If approved by the Public Utilities Commission, the rate increases could mean a boost of up to 25 percent in power bills beginning as early as April 1.

About 200 people attended Monday's raucous hearing, which was decidedly anti-Nevada Power. As in the previous hearings, the utility was accused of mismanagement and greed and told that its rate requests would ruin Southern Nevada's economy.

Betty Rufis complained that her power bills have already tripled, from $100 a month to $300 a month over the past 10 years. Rufis said she tried to replace her air conditioning unit with a water cooler but could not install the unit because it would not fit into her older home.

"It's not fun to live here if you can't afford it," she said. "In the summer we wear as few clothes as possible, use fans and shower at night. Why are people in power doing so little to protect the consumer?"

In the winter, Carol Hymon said she keeps her thermostat at 50 degrees because she cannot afford the heat. She said a neighbor with a 3-year-old child is facing eviction because she cannot afford to pay her power bills, opting instead to spend the money on medicine for her ailing child.

"I don't think the power company thinks about all us little people with health problems," Hymon said. "There's no extra money to pay for these heat increases."

The three-member commission, which is appointed by the governor, will begin formal hearings on the $22.9 million general rate case Monday in Las Vegas. If granted, that request alone would add about 2 percent to power bills, though the commission staff has recommended that Nevada Power's administrative costs be slashed by as much as $60 million.

The second and more controversial rate case, the $922 million deferred energy request, will be heard by the commission beginning March 4. Nevada Power critics, such as state Consumer Advocate Timothy Hay, have said that the utility overpaid for power by $500 million to $700 million.

"We'll use this input to weigh the other evidence," commission Chairman Don Soderberg said of the public forums. "What you're getting is a lot of people telling you how it affects them."

The Clark County Commission today will conduct its own hearing on the proposed rate hikes at 500 S. Grand Central Parkway from 4-7 p.m.com