Editorial: Power also starts with consumers

Thursday, Nov. 7, 2002 | 8:57 a.m.

There is reason to believe that Nevada consumers were victimized by energy companies that withheld supply to drive up gas and electric prices during the Western power crisis of 2000-2001. Already, on Sept. 23, an administrative law judge with the Federal Energy Regulatory Commission issued a preliminary decision against Houston-based El Paso Natural Gas Pipeline Co. Acting on a lawsuit filed by the California Public Utilities Commission, the judge concluded that El Paso willfully reduced supply to California during the state's 2000-2001 energy crisis. El Paso denies the finding, saying the judge doesn't understand that for safety, maintenance and other reasons, the pipeline cannot at all times operate at top capacity.

Nevertheless, the Nevada attorney general's office this week also filed suit against El Paso, one of the continent's biggest suppliers of natural gas. The suit, which names several other energy companies as well, alleges a conspiracy to take advantage of California's electric deregulation law -- a conspiracy that also resulted in higher natural gas and electricity prices for Southern Nevada consumers. Electric bills were affected because power plants selling to Southern Nevada use natural gas in generating electricity. Higher costs for natural gas are passed on to consumers.

The suit charges that the conspiracy began Sept. 25, 1996, when El Paso secretly met in Phoenix with Southern California Gas Co. It was agreed during the meeting, the suit says, to reduce the supply moving through El Paso's pipeline and to prevent construction and expansion of competitive pipelines. The conspirators, according to the suit, succeeded in preventing the expansion of the Kern River pipeline, which runs through Las Vegas. The suit argues that had the expansion taken place, the supply of natural gas would have been larger and Southern Nevadans would have benefited from the resulting lower prices of natural gas.

The attorney general's office was appropriately aggressive in filing the lawsuit. Consumers deserve a full accounting of the actions of El Paso and other energy companies during the power crisis.