Nevada Power’s spending on advertising criticized

Friday, Jan. 17, 2003 | 9:23 a.m.

Nevada Power Co. spent more than $846,000 in the week leading up to the Nov. 5 general election in an unsuccessful effort to defeat a Clark County ballot measure dealing with electricity.

A company spokesman said Thursday that the money from shareholders of Nevada Power parent Sierra Pacific Resources was well spent even though Question 14 passed by a margin of 57 percent to 43 percent.

Utility critics said, however, that Nevada Power cannot justify what it spent on the measure, which asked voters whether they wanted a nonprofit public agency to provide electricity to Southern Nevadans.

In campaign contribution reports filed Wednesday with elections officials, the Citizens Against 14 campaign disclosed that it raised $1.09 million and spent $1.08 million from Oct. 25 to Jan. 3. That meant that Citizens Against 14 wound up raising $2.73 million, including $2.71 million from Nevada Power, and spent $2.57 million since forming in late September.

"Without a doubt we felt the voters needed to be informed on the question," Nevada Power spokesman Edgar Patino said.

The utility has maintained that the ballot measure was vague and did not properly explain the potential costs to taxpayers. But proponents of Question 14 said Nevada Power, which has been struggling financially, could have more prudently spent the money elsewhere.

Southern Nevada Water Authority spokesman Vince Alberta, whose public agency has offered to buy Nevada Power for $3.2 billion, described Nevada Power's contributions as "an awful lot of money."

And state Consumer Advocate Timothy Hay said the level of spending by the utility was unprecedented given the fact the ballot measure was advisory only and therefore nonbinding on elected officials.

"The most astounding thing was the amount of money they spent on a misinformation campaign because they lost anyway," Alberta said. "The public saw the misinformation campaign for what it was."

Separate from the ballot campaign, Nevada Power launched an advertising effort in mid-October to spread good will about the company. The ads, featuring company employees and carried on television and radio as well as in local newspapers, are expected to run through the end of this month, Patino said.

He said the "branding" campaign and other advertisements encouraging consumers to conserve electricity are also paid for by Sierra Pacific shareholders. Those advertising costs will be reported in future financial reports that Sierra Pacific is required to file with the federal Securities and Exchange Commission, though they may be blended into other budget line items having to do with operational expenses and not listed separately.

"The branding campaign is part of our continued efforts to engage the company with the community," Patino said. "It's incumbent on us to be in touch with our customers."

But Peggy Maze Johnson, chairwoman of Citizens for Yes on Q14, which raised and spent no money on the ballot issue, argued that Nevada Power should disclose its advertising expenses because it is a way of trying to sway state lawmakers before the Nevada Legislature convenes on Feb. 3.

At issue is the future of Senate Bill 425, which passed in 2001 and prevents a public agency from forcibly taking over electric service that is provided by a private company. The law expires in July, however. Critics of Nevada Power say the utility wants to extend the law to prevent a takeover by the Water Authority.

"They're still trying to influence legislation," Johnson said of the company ads. "It should either be reported related to Question 14 or in public disclosures with the Legislature because it's a public campaign one way or another."

Patino, however, said Nevada Power President Pat Shalmy, who will serve as one of the utility's lobbyists in Carson City, has not yet determined whether to fight for extension of SB425. Patino also said the ads are not intended to influence lawmakers.

"It is separate and has nothing to do with the Legislature," Patino said. "It is also independent of the Question 14 campaign. Our branding and conservation campaigns are part of ongoing campaigns that we've done in the past and will do in the future."