Sierra Pacific tells feds it’s clean

Thursday, May 23, 2002 | 9:30 a.m.

Nevada Power Co. parent Sierra Pacific Resources informed federal regulators Wednesday that it did not engage in any questionable power trading activities that are under investigation as a result of the Western energy crisis.

The Federal Energy Regulatory Commission, which regulates the nation's wholesale energy markets, required Sierra Pacific and dozens of other utilities that sold energy in the West since 2000 to file sworn affidavits answering numerous questions.

Sierra Pacific has not yet chosen to release its affidavit publicly, an option the commission gave the utilities. But Nevada Power spokeswoman Andrea Smith said "we filed a clean affidavit, meaning we did not do anything wrong."

Federal regulators were prompted to launch an investigation of the Western power crisis after fielding allegations, mostly from Californians, that the higher prices consumers paid for electricity since 2000 were the result of market manipulation by power generating companies and wholesalers.

It was revealed earlier this month that memos from Enron Corp. of Houston showed that the fallen energy giant sought to create artificial power shortages in California through unusual trading tactics, causing prices to skyrocket. Federal regulators wanted to know if other energy traders, including utilities such as Sierra Pacific, employed similar tactics.

Sierra Pacific and the other utilities were asked 11 questions, many having to do with phrases such as "Death Star," "Get Shorty" and "Fat Boy" that Enron developed to describe different types of trades. One type of trade under investigation is whether wholesalers bought electricity in California, where the prices were capped, and sold that power elsewhere for profit where prices weren't capped.

It so happens that Sierra Pacific and Nevada Power have a pending case in a federal appellate court in Washington, in which the utilities complain that the commission, which instituted the California price caps last year, should have done the same with wholesale prices paid by Nevadans.

Other trades federal regulators are exploring involve those in which the trading company may have received payment for energy that was never delivered or made it appear as though it sold more power than it actually did.