Editorial: Both sides could lose in this fight

Friday, Sept. 13, 2002 | 4:53 a.m.

WEEKEND EDITION: Sept. 15, 2002

When the Southern Nevada Water Authority announced last month that it wanted to buy Nevada Power, officials of the government-run water agency and executives of the private electric company were relatively civil to each other. The water authority said its bid was a friendly offer, not a hostile takeover, and the electric company said it would carefully consider the proposal.

But the gloves came off Thursday when Nevada Power rejected the $3.2 billion bid. Not only did the electric company question the water authority's ability to run an electric utility and obtain the financing to buy the company, but the water authority also was accused of using takeover tactics employed by "corporate raiders." The water authority, meanwhile, hit back by reminding residents about skyrocketing power bills. "It is obvious that they care first and foremost about maintaining the status quo, which will continue to be financially devastating for the Southern Nevada community," water authority General Manager Pat Mulroy said.

No one expected the niceties to last long, but if the heated rhetoric continues for some time, it could unsettle Southern Nevadans. After all, "stability" is usually the word that comes to mind when you think of a well-run utility. People don't usually associate these staid utilities with the kind of rhetoric used by hardened political campaigners. If Nevada Power and the Southern Nevada Water Authority engage in a smash-mouth debate to destroy each other's credibility, the end result could be a significant decline in public confidence in both utilities -- and that's a loss that won't help either of them with their customers.

But that doesn't mean there shouldn't be a frank and healthy debate over the Southern Nevada Water Authority's bid. We should be asking: Can the water authority afford such a bid? And will a merger result in cheaper power and reliable service? Why should the private sector, instead of the government, be in charge of what is an essential, universal service such as electricity? Those are just a few of the many questions that will need answering. The bottom line is that the takeover bid doesn't have to turn nasty, and the issue should focus on facts, not emotion. But considering how vicious most takeover attempts get, the "winner" in the battle between Nevada Power and the Southern Nevada Water Authority may find in the end that it is a Pyrrhic victory.