Nevada Power debt issues advance at commission

Kevin Rademacher

Thursday, Oct. 2, 2003 | 11:16 a.m.

The state Public Utilities Commission will hear a request from Nevada Power Co. and its sister company, Sierra Pacific Power Co. of Reno, to approve the issuance of $338 million of long-term debt.

The utilities need the access to capital in order to post a bond that would stay the execution of a $336 million court judgment.

Last week New York Bankruptcy Court Judge Arthur Gonzalez issued a final ruling that ordered the companies to pay Enron Corp. for contracts cancelled during the Western energy crisis. A bond would hold the place of payment during an appeals process that could take years.

The PUC will hear the utilities request on Oct. 23.

In other regulatory matters, the PUC in a Wednesday hearing also approved the reallocation of funds for Nevada Power Co. conservation programs.

The ruling will allow the company to terminate programs that have not received widespread customer support and shift the associated financing to more successful conservation efforts.

The ruling will take $155,000 from the trial program to combine the air conditioning rebate and time-of-use metering programs. That will increase by $105,000 a rebate program for the purchase of Energy Star certified appliances and increase by $50,000 an air conditioning load management program.

The PUC also approved Nevada Power's 2004 budget for conservation programs. That move will add another 3,000 customers to the loan management program and add more funds to the appliance program.

"In a nutshell, the company has focused ... in on programs that are working and moved away from those things that don't work," PUC Chairman Don Soderberg said at the hearing.

Also at Wednesday's hearing, the PUC indicated that it will continue to explore changes to the current regulatory process relating to utility resource planning.

Soderberg, in taking up a case guided by former Commissioner Richard McIntire, received agreement from Commissioner Adriana Escobar Chanos that workshops should continue.

The goal of possible regulatory changes is to create a pre-approval process for energy procurement plans. The move was spurred when the PUC in 2002 disallowed $437 million in energy purchases by Nevada Power after ruling that the company's plan guiding those purchases was largely imprudent.

"This would allow us to prevent things before they happen," said Soderberg, who presented a 26-page memo on the issue.

It would not, however, represent a free pass for the utilities to engage in reckless management.

"If the commission were to approve the plan, the components of the plan would be deemed prudent," the memo said. "However, the prudency of a utility's actual implementation and administration of the plan would be evaluated in the appropriate (rate case) proceeding."

No dates have been set on when the issue will be taken up again.