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
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
Richard Nemec, Los Angeles