Claiming that a state-imposed moratorium on divestiture in Nevada would not be in the consumers’ best interest, energy expert Susan Tierney testified before the Public Utility Commission of Nevada (PUC) last week that Nevada Power Co. ratepayers could save up to $281 million over the next five years if the proposed divestiture of certain Nevada Power Co. plants is approved.

“An across-the-board moratorium on divestiture would increase Nevada Power’s costs, and raise the potential market-power concerns, institutional risk and uncertainty, equity concerns, procedural concerns, and diverse regulatory implications,” said Tierney, testifying on behalf of several competitive power suppliers and Electric Power Supply Association (EPSA) members.

When asked to review the Nevada Bureau of Consumer Protection’s (BCP) proposed moratorium on divestiture of plants in the state, Tierney found many discrepancies in the methodology that led to BCP’s assertions that a moratorium would be in the consumers’ best interest. Citing several analysis errors, including the absence of important cost and revenue items, Tierney urged the PUC to continue with the proposed divestitures as the commission had originally ordered.

“These errors are fatal flaws from an analytic point of view, and cause the results of the BCP analysis to have no credibility,” she said. “This analysis does not use an appropriate methodology for calculating ratepayer benefits from divestiture. The commission should give it no weight in the current proceeding.”

Tierney also noted that the divestiture of the plants is a positive step toward achieving effective competition while minimizing any market power in the Nevada electricity market. She added that similar actions are taking place around the country as regulated utilities move toward the competitive model.

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