Columnist Jeff German: Power rate decrease is no gift

Friday, Nov. 15, 2002 | 11:23 a.m.

Jeff German's column appears Sundays, Wednesdays and Fridays in the Sun. Reach him at german@lasvegassun.com or (702) 259-4067.

This is a reality check, friends.

Don't be fooled into thinking that Nevada Power Co.'s modest request to cut rates is a gesture of goodwill toward us.

It isn't.

The struggling utility, which rivals Siegfried & Roy in the art of illusion, is bound by state law to give us a 5.3 percent decrease in our monthly bills.

When the price of electricity falls, as it has in recent months, Nevada Power has no choice but to pass those savings to ratepayers.

So you have to chuckle when you hear Walt Higgins, grand pooh-bah of Sierra Pacific Resources, the parent company of Nevada Power, tell us that he's "pleased" to do something nice for his customers.

Las Vegas Mayor Oscar Goodman, one of the utility's many critics, got a laugh at his weekly news conference on Thursday, likening the rate-reduction proposal to something a "rat does when it's cornered."

If Higgins was so kind, he wouldn't have asked Nevada taxpayers for a $922 million bailout earlier this year, and then go to court to try to recover the $437 million the Public Utilities Commission disallowed.

Even as Nevada Power offers us this $81 million rate cut, which if approved by the PUC won't take effect until spring, its well-paid lawyers are hard at work looking to stick us with the rest of the bailout tab.

"It makes you wonder," said Pat Mulroy, general manager of the Southern Nevada Water Authority, which has offered to buy Nevada Power for $3.2 billion. "If they really wanted to do something for the ratepayers, they would drop the $437 million."

Deception, it seems, has become a routine part of business for Higgins and Nevada Power.

In March, after Nevada Power didn't get the entire $922 million, it claimed the company was in such dire financial straits that it might have to file for bankruptcy and let the town go dark. That didn't happen, of course.

And now Higgins says the company miraculously is on the road to recovery.

In September Nevada Power put together a coalition within the business community to fight a ballot question that was heightening debate over a public takeover of the utility. It claimed it had no control over the coalition and its 16 members, which included the Las Vegas Chamber of Commerce.

But a month later, campaign finance reports disclosed that Nevada Power funded the coalition almost entirely, pouring $1.6 million into the media campaign against Question 14, which encouraged the Legislature to pave the way for a hostile public takeover of the company.

The campaign was vicious and misleading. It took cheap shots at the Water Authority, which has said it can save us 20 percent on our monthly bills because it will be able to purchase power with a superior credit rating.

Even though it knew the Water Authority was being run efficiently, Nevada Power aired television ads throughout the campaign suggesting it would be a mistake to put the company in the hands of "bureaucrats" with little knowledge of the energy industry.

Nevada Power also knew that just two months earlier it had hired as its new president one of the valley's biggest bureaucrats of all time, former County Manager Pat Shalmy, who had absolutely no experience running a utility.

As it turned out, the company couldn't buy its way to victory in the campaign against Question 14. The voters approved the ballot initiative by a 57-43 percent margin.

So forgive the skeptics who now think Nevada Power has ulterior motives in hyping a rate decrease that will save us a few bucks.

We'll take the savings when the lower bills find their way to our mailboxes.

But we're not going to be fooled into thinking this is the new face of Nevada Power.

We know it's the same underhanded, sneaky company that cares only about its own survival -- not ours.

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