Nevada Power defends alert status

Monday, May 13, 2002 | 9:10 a.m.

Nevada Power Co's. sharply worded defense of its decision to issue a "yellow alert" to customers on April 14 represents the latest in a series of tiffs the utility has had with the state Public Utilities Commission.

The response filed Friday by Nevada Power criticized the PUC staff's interpretation of the events that led up to the alert. The utility, which issued the alert based on concerns that it would not have enough electricity that day, said it had difficulty purchasing power because of its shaky credit.

The PUC staff report issued last week questioned whether Nevada Power's credit was at issue, but the utility argued that that was a primary reason behind the alert. The disagreements between Nevada Power and the PUC staff could come to a head at a scheduled May 20 commission workshop in Las Vegas to discuss the alert.

"Nevada Power's decision was based on all of the events that occurred in the 48 hours prior to the declaration of the alert, including near record temperatures projected for Sunday, April 14, the continued reluctance of suppliers to deal with Nevada Power because of their uncertain credit, the planned and unplanned outages of the (company's) generation plants and the concern that the utility could not secure needed supply in a timely fashion," the company stated.

The PUC staff had questioned why Nevada Power issued a yellow alert before issuing a lower level alert.

"If Nevada Power had exhausted all options before declaring the condition yellow emergency and calling for conservation, it may have failed to provide the customers adequate notice of a potential outage or the opportunity to help mitigate the shortage through conservation," Nevada Power responded.

An example of the barbs Nevada Power hurled at the PUC staff was contained in response to concerns from staff that the utility may have problems transporting natural gas to its gas-fired generating plants.

"Staff focuses on gas transportation limitations when the primary focus should be that it is always more difficult to secure supplies when credit is at issue," Nevada Power stated. "This is especially true when the rest of the market has already transacted and the remaining supplies are limited."

Nevada Power has blamed its poor credit rating on a March 29 PUC ruling that granted the utility only $485 million of the $922 million it is seeking from ratepayers for energy used last year. The decision led Wall Street to lower the credit ratings of Nevada Power and parent Sierra Pacific Resources from investment grade to junk status.