Last briefs filed in Nevada Power rate lawsuit

Friday, Nov. 15, 2002 | 10:27 a.m.

CARSON CITY -- While admitting it was not perfect, Nevada Power Co., nevertheless said it provided substantial evidence to justify a full $922 million rate increase to customers in Clark County.

The Las Vegas utility, in its final brief to District Judge Bill Maddox, urged him to send the case back to the state Public Utilities Commission to restore the $437 million cut from the request.

But Consumer Advocate Tim Hay said Nevada Power acted "recklessly with ratepayer dollars" in purchasing outside power during the energy crisis of 2000-2001. He said the judge should deny the full $922 million.

The utilities commission shaved about 40 percent from the request, saying the company did not use prudent practices in purchasing this power. Nevada Power then filed suit. Oral arguments are set for Feb. 6.

C. Stanley Hunterton, attorney for Nevada Power, said in the closing brief filed Nov. 8 that the PUC concentrated on "every nit and nat" presented by the opposition and overlooked the substantial testimony in support of the rate application.

Hunterton said the PUC failed to explain the denial of $437 million the company "borrowed and spent between March 1 and Sept. 30, 2001 to buy the electricity consumed by Las Vegans during the most severe and unprecedented energy crisis in the history of the American West."

Hunterton asked the judge to return the case to the PUC to decide the case on the issue of prudence in the power buys, rather than on other miscellaneous issues.

Hay replied that Nevada Power made "colossal management mistakes" in buying the overpriced power and should not be allowed to recover any of the $922 million. At the most, Hay says the decision of the PUC should be upheld.

Nevada Power said the PUC never gave it a chance to rebut some of the arguments submitted the opposition.

The PUC knocked $180 million from the requested rate increase because the utility did not go through with a deal to buy energy from a subsidiary of Merrill Lynch in 1999. That deal fell through. The state agency also disallowed $188 million, saying the utility purchased excess power, and it rejected $44 million in higher rates because Nevada Power did not sell off its contracted power before the price dropped in September 2001.

The utility says the $922 million it sought was to cover only the higher costs of fuel and does not increase profits of the utility.