Nevada Power bringing in experts to bolster request for rate hike

Thursday, March 7, 2002 | 9:25 a.m.

Nevada Power Co. will open rebuttal arguments Friday in its quest to recoup $922 million for energy used by Southern Nevadans last year by offering the testimony of an Oregon consultant.

Robert McCullough, managing partner of the McCullough Research energy consulting firm, will testify based on his work with other utilities and regulators in connection with California's energy crisis.

In pre-filed testimony made available to the Public Utilities Commission of Nevada Wednesday, McCullough challenged assertions made by consultants hired by MGM MIRAGE and the state Bureau of Consumer Protection. He said that Nevada Power could not have foreseen the events that triggered California's crisis in 2000 and sent wholesale prices skyward.

"Nevada Power had approached its power purchasing in a systematic fashion," McCullough testified. "After May 22, 2000, it attempted to ride out the unforeseen events of the summer using its original plan.

"NPC (Nevada Power Co.) attempted to cover all forward positions. In 2001 they went so far as to purchase additional firm power. Given the failure of contracts in January 2001, this was very prudent indeed."

The commission hearings at 101 Convention Center Drive originally were scheduled to end Friday but were extended through Tuesday to give attorneys representing the various parties in the case time over the weekend to review Nevada Power's massive rebuttal testimony.

That testimony will also include remarks from Nevada Power Co. President Mark Ruelle, economic consultant Peter Fox-Penner of Washington, Nevada Power principal trader Jon Perry, Dennis Schiffel, senior vice president and chief financial officer of Nevada Power parent Sierra Pacific Resources of Reno, and James Joyce, an energy risk management expert from Calgary, Alberta in Canada.

The commission must reach a decision on Nevada Power's $922 million request by April 1. If the company gets the full amount, customer bills will go up as much as 25 percent over the next three years.