Nevada Power appeals power contract decisions

Wednesday, June 2, 2004 | 11 a.m.

In its latest effort to reverse a decision by the Federal Energy Regulatory Commission upholding long-term power contracts signed during the Western energy crisis, Nevada Power Co. on Monday appealed to the 9th Circuit Court of Appeals.

The appeal, filed with sister utility Sierra Pacific Power Co. of Reno, claims that the FERC ruling is "fatally flawed" by asserting that the sanctity of contracts outweighs the market manipulation by Enron Corp. on which those power contracts were created.

The Nevada utilities asked the court to reject the ruling and remand the case back to FERC for rehearing.

The decision in the case is critical since New York bankruptcy court judge Arthur Gonzalez last year based a $300 million ruling in favor of Enron entirely on the FERC decision. He reasoned that the federal regulatory agency had sole jurisdiction over the contracts.

On Friday, the Nevada companies also made oral arguments in a New York appeals court case seeking to overturn the bankruptcy court ruling as well.

A timetable for hearings or decisions in either appeal has not been set.

Meanwhile, the companies also have asked FERC to revisit the case based on a separate claim that Enron violated market rules when it cancelled the power contracts that led to the $300 million termination penalty upheld in bankruptcy court.