Friday, Dec. 26, 2003 | 11:45 a.m.
Opposition is mounting to a potential request by Nevada Power Co. that it bill ratepayers for millions of dollars it may have to pay Enron Corp.
A U.S. Bankruptcy Court judge in New York ruled in August that Nevada Power of Las Vegas and its sister utility, Sierra Pacific Power Co. of Reno, owe Enron $336 million for termination payments related to power contracts cancelled during the Western energy crisis.
State Consumer Advocate Tim Hay argued in briefs filed with the state Public Utilities Commission this week that the such termination payments do not represent fuel and purchased power expenses, the only basis for recovery through a deferred energy rate case.
"The termination payments described in ... (the) petition for a declaratory order do not meet the definition of costs for purchased fuel and purchased power, should not have been recorded as such and in fact have not been recorded in the account which the deferred energy accounting process is designed to clear" Hay argued.
PUC staff testimony on the matter, which was filed earlier this month, also questioned the potential request.
Louise Uttinger, assistant staff counsel with the PUC, argued that the request was poorly timed.
"To date the companies have not made filings with the commission to request recovery of payments made that are associated with the Enron termination liability and related contracts," she said. "Instead, the companies have appealed.
"Since the companies have not requested rate recovery for any Enron payments, the issues posed by by the petition for declaratory order are premature. Staff therefore concludes that the petition should be dismissed."
Nevada Power was granted a stay of execution by the bankruptcy court in the Enron case. That stay allowed the utility to post bonds for the judgment amount while it is being appealed.
MGM MIRAGE, which also filed a response to the utilities' request, argued that there is not enough information available to issue a ruling.
Jon Wellinghoff, an attorney representing MGM, argued that the PUC should "dismiss the petition for lack of adequate legal support" or require the utilities to submit a more detailed request.
Nevada Power and Sierra Pacific Power have not asked regulators for the authority to bill consumers for the costs of the Enron judgment, but have asked the PUC for guidance on whether they could make such a request. That request for guidance is what prompted the protests from Hay, the PUC staff and MGM MIRAGE.
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