Letter: Nevada Power has self to blame for huge losses

Thursday, March 14, 2002 | 8:42 a.m.

The rate increase request of $922 million by Nevada Power should be denied. It is my understanding that Nevada Power could have avoided those extremely high and temporary spot market power prices by buying electricity under multi-year contracts. For some reason they chose not to do this.

The magnitude of this error demands that it be corrected. If the Public Utilities Commission denies the rate increase, Nevada Power will file for bankruptcy. Under court supervision those aberrant power contracts can be renegotiated. Looking at wholesale electricity costs before the price spike and afterwards, a reasonable settlement price should become apparent.

The more we learn about the energy trading market the more suspicious becomes that temporary "energy crisis." But even if the prices were aboveboard, the opportunity to use much lower-cost, longer-term contracts was neglected.

That failure, no matter how it is characterized, needs to be corrected for the future well-being of Southern Nevada.

ALAN EICHLER