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Nevada Governor Slows Electric Restructuring, But Utilities Push Forward

Nevada Governor Slows Electric Restructuring, But Utilities Push Forward

Nevada's governor last week delayed opening the state's electricity market until no later than Sept. 1, 2001, choosing to establish a bipartisan statewide committee to develop a new energy policy for the state.

The holding company for Nevada's two major electric utilities, Sierra Pacific Resources, embraced the actions and presumably will move ahead with plans to prepare for a competitive electricity industry that is eventually tied to a regional transmission grid in the Pacific Northwest.

After what he called "much research," Gov. Kenny Guinn concluded the state was not ready to launch its electric restructuring this fall. "It is my responsibility as governor to make sure the residential ratepayers of this state are protected in a competitive market and that Nevada is ready for deregulation."

The governor said he would name the members of the Nevada Energy Policy Committee within the next two weeks. The committee also will review of "national and global energy trends" that could impact Nevada.

Using powers taken from state regulators and given to him by a 1999 state law, Gov. Guinn decided to create an energy policy for his state before launching electricity restructuring, and the move was praised by Sierra Pacific's CEO Walter Higgins, who noted that "we look forward to working with the governor's committee to formulate a sound energy policy." A report from the bipartisan committee is due to the governor by Jan. 15, 2001. The electricity market could then open to retail competition on Sept. 1 or earlier.

Sierra Pacific Resources' two utilities, Las Vegas-based Nevada Power and Reno-based Sierra Pacific Power, reached an agreement with the Nevada PUC staff, state consumer protection officials, and the state's largest commercial/industrial customers for a plan to move to retail competition on a phased basis from Nov. 1, 2000 to Dec. 1, 2001. The governor's delayed date would apply to everyone, abandoning the phased-in approach.

Those dates will change, but the basic provisions remain in effect, including an agreement that the utilities will be able to recover all of their purchased power costs in a de-regulated market, according to the governor's latest move. Higgins noted that "keeping the settlement in place is in the best interest of all Nevada citizens." The settlement was approved by the Nevada Public Utilities Commission this summer.

Even with slowdown within the state, the two Nevada utilities are pushing forward at the federal level to open up electric transmission in the state and throughout a broader Pacific Northwest region to which they are aligning.

The action by the governor will be supplemented by upcoming proposals to federal regulators for Nevada power interests to join with affiliates of Pacific Northwest utilities in forming a for-profit, nonutility "independent transmission company" (ITC) to operate within a broader regional transmission organization (RTO).

In May, Sierra Pacific and Nevada Power joined with Portland General Electric, Avista Corp., Montana Power and Puget Sound Energy in a memorandum of understanding to study the ITC concept under the provisions of FERC Order 2000 calling for the creation of regional grid operators by Dec. 15, 2001.

The six MOU participants are expected to be among a larger group that files by Oct. 15 this year with FERC for a so-called "RTO West." The parties from a host of Western utilities are working on that filing, according to Duane Nelson, Sierra Pacific Power's transmission manager.

Richard Nemec, Los Angeles

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