A union dispute over proposed pension fund changes at Nevada Power Co. upstaged a Nevada Public Utilities Commission (PUC) meeting with consumers in Las Vegas Tuesday. The meeting had been called to discuss the prospects of higher natural gas prices and their impact on retail utility electric rates for Nevada Power and the other Sierra Pacific Resources’ utility, Sierra Pacific Power Co.

Members of the International Brotherhood of Electrical Workers Local 396 flooded the public meeting to state their opposition to the utility’s proposed pension changes.

As a result, the Las Vegas Review-Journal reported Thursday that for the first time in 18 years a bitter labor dispute threatened the reliability of future electricity supplies in the air conditioning-dependent Southern Nevada region, one of the fastest growing areas in the nation.

A PUC spokesperson said the regulators nevertheless were able to deliver their primary message on the gas price situation, urging local consumers to “start preparing now for increased costs.”

Regulators called the session also to explain a potentially confusing situation for the immediate future in which retail electricity rates have been lowered due to deferred rate adjustments. Both PUC and Nevada Power utility representatives tried to explain the situation at the workshop while the major of the attendees were utility employee union members who were more concerned about the utility’s effort to allegedly cut worker pension benefits by up to 70%.

The thrust of the PUC’s message was that even though Nevada Power retail rates are set to drop a little more than 5% beginning Oct. 1, the decrease will be short lived because natural gas prices for Nevada are expected to “soar this winter. Nationally, natural gas futures have also risen substantially,” according to PUC staff analyst David Chairez.

Natural gas prices for the Nevada utilities have increased “significantly” this year, compared to 2007, Chairez told the PUC meeting attendees. “Southern Nevada is particularly reliant on gas because it fuels 80% of the Nevada Power’s electrical generating capacity.”

The PUC tried to stress that so far consumers have been shielded from the wholesale gas price hikes, but that will end this winter. The added costs of the gas will have to begin showing up in retail utility bills, Chairez said.

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