Utility revamping management ranks

Kevin Rademacher

Wednesday, Nov. 17, 2004 | 10:55 a.m.

Sierra Pacific Resources is shaking up its management ranks in an effort to streamline the operations of its two utilities -- Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno.

The first step in that effort, which could eventually lead to a trimming of staff, was unveiled on Tuesday, when Chief Executive Walter Higgins named leaders for six key operational areas.

Pat Shalmy, who will continue in his role as president of Nevada Power Co., was named the head of the combined company's public policy and external affairs operations. He will have responsibility for government affairs, corporate communications, community relations and customer strategy and marketing.

Similarly, Jeff Ceccarelli will maintain his position as president of Sierra Pacific Power while adding responsibility for service delivery and operations. In that role he will guide transmission, customer service and supply-chain management.

Roberto Denis, who already serves as vice president of energy supply for the parent company, will have responsibility for resource procurement, resource planning, power plants, environmental affairs and renewable energy.

The finance division will be led by Michael Yackira, Sierra Pacific Resources chief financial officer. He will oversee all financial matters, including the office of the controller, treasury operations, investor relations, corporate planning, risk control, rates and regulatory activities.

The parent company's current vice president for human resources and support services -- Steve Wood -- will be in charge of the administration division. His duties will include information technology, corporate security and telecommunications.

In charge of the company's legal activities will be Ernie East, who will retain his current title of general counsel.

Higgins said the moves will create standardized procedures across the two companies, which merged in 1999.

"We are a statewide utility," he said. "Our goal ought to be to perfect the operation of a statewide utility."

The result is expected to be the consolidation of some operations in either Reno or Las Vegas, he said, pointing to a move to consolidate the company's regulatory operations in Reno, closer to the Carson City headquarters of the state Public Utilities Commission.

While Higgins conceded that the end result is likely to be fewer employees, he opposed the characterization of the move as preparation for layoffs.

With Tuesday's announcement, the company's top-level management was trimmed from 56 to 46, Higgins said. He added, however, that the 10 displaced managers have not been laid off, and that their new positions in the company are still being defined.

"We won't know that for probably more than a month," Higgins said.

He said the six new top executives will be reviewing their consolidated operations, and the possibility of future layoffs has not been determined.

"I do expect that if you look back at us two years from now, we will be smaller than we are today," Higgins said.

He said the plan has been in the works for more than a year, and probably could have been implemented sooner if not for the fallout from the Western energy crisis of 2000-01.

"While we were still in a financial crisis, we probably weren't able to take our eye off the ball," Higgins said.

In February hearings on Nevada Power's last general rate case, some critics questioned the savings customers actually gained from the merger of the two utilities in light of higher rates customers have paid since then.

At that time, utility officials objected to the claims, pointing out that rates soared throughout the region amid the energy crisis, sparked largely by California's botched attempt at deregulation.

Higgins said comments from the hearing did not drive the new announcement.

Nevada Consumer Advocate Tim Hay said the final verdict on the move is still out.

"Rationalizing the management positions makes a lot of sense," Hay said, adding that most of the top executives already perform many of the functions announced Tuesday. "More carefully defining the functions ... is probably a good sign."

Hay also praised the move to increase Ceccarelli's role in Las Vegas.

"I do think Jeff is one of the more talented managers they have," he said.