Evidence request limited in CRC, Nevada Power dispute

Kevin Rademacher

Thursday, May 6, 2004 | 11:09 a.m.

An administrative law judge for the Federal Energy Regulatory Commission on Wednesday narrowed the scope of a dispute between the Colorado River Commission and Nevada Power Co.

For months, Nevada Power sifted through commission documents and listened to thousands of recorded telephone conversations as a participant in a FERC inquiry into companies that might have assisted Enron Corp. in market manipulation.

In March, Nevada Power used its findings to file testimony with FERC claiming that the commission and Enron collaborated in a scheme to damage the Las Vegas electric company and profit from improper trades into the dysfunctional California energy market.

In response to that filing, the commission is now conducting its own investigation into Nevada Power in an effort to mount a defense. The commission had requested depositions from top utility executives, including Nevada Power President Donald "Pat" Shalmy and Michael Yackira, chief financial officer of the utility's parent company, Sierra Pacific Resources.

The commission also filed 272 data requests for Nevada Power records.

Wednesday's ruling from Judge Isaac D. Benkin restricts commission access to many top utility executives and minimizes the data requests. In return the judge ordered Nevada Power to carve out portions of its original testimony, officials with the utility and the commission said.

Under the ruling, Nevada Power's testimony will be modified to relate only to alleged activity in the California energy market, removing references to the commission's possible violations of tariff rules and industry standards for "good utility practices."

"We're comfortable with the results the judge reached," said J. Russell Campbell, a attorney representing Nevada Power. "We are not litigating the Nevada issues before the FERC."

Roberto Denis, vice president for energy supply with Sierra Pacific Resources, is now the only executive certain to be deposed by the commission. Denis filed the testimony with FERC on behalf of Nevada Power. The ruling also allows access to any executives that provided him information used in compiling testimony. Campbell said that list does not include Shalmy or Yackira.

George Caan, executive director of the commission, said the ruling still leaves plenty of information on which to mount a defense, provided Nevada Power complies with direction to limit its arguments.

"We are going to answer the complaint and rebut the charges precisely," Caan said. "It seems to be a fair balancing ... but we need to see how it is carried out."

The commission has until May 28 to file its response with FERC and a hearing is set for June 28.

The issues of possible tariff violations and alleged schemes to damage Nevada Power will still be played out in U.S. District Court in Las Vegas.

Nevada Power Co. also used information found in its commission investigation to file a federal lawsuit against commission employees and the Southern Nevada Water Authority.

Motions are now being filed in that case. A June 21 hearing has been set for the water authority's motion to dismiss the lawsuit.