Nevada Power lawsuit against water authority may be revived

Kevin Rademacher

Tuesday, Nov. 23, 2004 | 10:40 a.m.

Despite a federal judge's ruling on Monday, a case brought against the Southern Nevada Water Authority by Nevada Power Co. is far from over.

U.S. District Court Judge Clive Jones granted the Water Authority's motion to dismiss Nevada Power's lawsuit, but he left the door wide open for the Las Vegas electric company to continue its case.

Jones questioned both parties in the case extensively in an attempt to ensure that the lawsuit was not more appropriate for argument before the Federal Energy Regulatory Commission, which has exclusive jurisdiction over cases involving rate disputes.

"Is this something more than just a rate case?" Jones asked.

Jonathan Waller, an attorney representing Nevada Power, said that the case was about a conspiracy between the SNWA and employees of the Colorado River Commission, a state agency which purchases power for the water authority, to damage the utility.

"We are talking about an attempt to hijack our property and destroy our company," Waller said.

The Nevada Power lawsuit claims that the agencies, along with bankrupt energy trader Enron Corp., deceived Nevada Power about the commission's energy needs. That scheme led the utility to buy and sell energy based on false information, causing "Nevada Power and its customers significant economic losses," the lawsuit said.

For the first time since filing the initial lawsuit, Nevada Power put a dollar figure on the estimated damages it suffered at the hands of the water authority and CRC employees. In his arguments, Waller said those damages could run as high as $25 million. After the hearing, however, utility officials said the figure could actually be as high as $40 million.

Waller said that the actions were taking place at the same time that the SNWA had made an offer to buy the utility, which was facing a financial meltdown amid the Western energy crisis.

"It goes way beyond just a dispute over a tariff," he said.

J. Stephen Peek, an attorney representing the water authority, disagreed.

"What they are trying to do in this case is to put a different name on it or a different cloth on it to get you to take jurisdiction of it," he said.

Ultimately, Jones agreed, at least in part, with Peek, granting the motion to dismiss the lawsuit, but told Nevada Power it could refile the case if it more thoroughly spelled out the details that made the case suitable for federal court.

"You've got to tell me what you are alleging," Jones said, asking for more details on the alleged conspiracy and detailing the tariffs that govern the rates at question in the case.

"I am going to require you to plead specifically as to what approved rate, filed rate exists," he said, "And how to avoid this becoming a filed-rate case."

He gave the utility 20 days to refile the case.

"The judge is saying 'I think there is something there,' " said Peter McNulty, another Nevada Power attorney on the case. "We just need to plead it better."

Similarly, the water authority was characterizing the results as a victory.

"We have said all along that we felt that this case had no merit," said SNWA spokesman Vince Alberta.