Nevada’s governor last week delayed opening the state’selectricity market until no later than Sept. 1, 2001, choosing toestablish a bipartisan statewide committee to develop a new energypolicy for the state.

The holding company for Nevada’s two major electric utilities,Sierra Pacific Resources, embraced the actions and presumably willmove ahead with plans to prepare for a competitive electricityindustry that is eventually tied to a regional transmission grid inthe Pacific Northwest.

After what he called “much research,” Gov. Kenny Guinn concludedthe state was not ready to launch its electric restructuring thisfall. “It is my responsibility as governor to make sure theresidential ratepayers of this state are protected in a competitivemarket and that Nevada is ready for deregulation.”

The governor said he would name the members of the Nevada EnergyPolicy Committee within the next two weeks. The committee also willreview of “national and global energy trends” that could impactNevada.

Using powers taken from state regulators and given to him by a1999 state law, Gov. Guinn decided to create an energy policy forhis state before launching electricity restructuring, and the movewas praised by Sierra Pacific’s CEO Walter Higgins, who noted that”we look forward to working with the governor’s committee toformulate a sound energy policy.” A report from the bipartisancommittee is due to the governor by Jan. 15, 2001. The electricitymarket could then open to retail competition on Sept. 1 or earlier.

Sierra Pacific Resources’ two utilities, Las Vegas-based NevadaPower and Reno-based Sierra Pacific Power, reached an agreementwith the Nevada PUC staff, state consumer protection officials, andthe state’s largest commercial/industrial customers for a plan tomove to retail competition on a phased basis from Nov. 1, 2000 toDec. 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 ineffect, including an agreement that the utilities will be able torecover all of their purchased power costs in a de-regulatedmarket, according to the governor’s latest move. Higgins noted that”keeping the settlement in place is in the best interest of allNevada citizens.” The settlement was approved by the Nevada PublicUtilities Commission this summer.

Even with slowdown within the state, the two Nevada utilitiesare pushing forward at the federal level to open up electrictransmission in the state and throughout a broader PacificNorthwest region to which they are aligning.

The action by the governor will be supplemented by upcomingproposals to federal regulators for Nevada power interests to joinwith affiliates of Pacific Northwest utilities in forming afor-profit, nonutility “independent transmission company” (ITC) tooperate within a broader regional transmission organization (RTO).

In May, Sierra Pacific and Nevada Power joined with PortlandGeneral Electric, Avista Corp., Montana Power and Puget SoundEnergy in a memorandum of understanding to study the ITC conceptunder the provisions of FERC Order 2000 calling for the creation ofregional grid operators by Dec. 15, 2001.

The six MOU participants are expected to be among a larger groupthat files by Oct. 15 this year with FERC for a so-called “RTOWest.” The parties from a host of Western utilities are working onthat filing, according to Duane Nelson, Sierra Pacific Power’stransmission manager.

Richard Nemec, Los Angeles

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