Wednesday, March 26, 1997 | 11:59 a.m.
CARSON CITY -- Southwest Gas Corp. urged an Assembly committee today to pass a bill that would lessen state environmental and building regulations on the utility industry, which likely will face open competition in the future.
Thomas Sheets, vice president for Southwest, told the Assembly Government Affairs Committee that its competition will be coming from unregulated companies and the state regulations "put us at a disadvantage."
But state Consumer Advocate Fred Schmidt and the state Public Service Commission opposed Assembly Bill 254, which would eliminate the commission's review of building projects by utilities. It would also repeal the requirement that the PSC approve resource plans submitted by utilities that tell how they will secure energy to serve future customers.
Committee Chairman Doug Bache, D-Las Vegas, said he would accept some amendments submitted by Southwest Gas and they would be studied further. These amendments, Bache said, "were as clear as mud" and need further consideration by the committee.
Sheets and Ed Zub, senior vice president for Southwest, said they need less state oversight as the new era of competition arrives. Sheets said submitting resource plans to the PSC will "expose" the company's proposals to competitors.
Sheets said Southwest would still submit its resource plans but they would not have to be approved. He argued that the environmental review by the state is unnecessary because there is oversight now by the federal and local governments.
"It's additional time and cost with very little benefit," he said.
He was backed by Terry Graves of the Saguaro Power Plant in Henderson, who said the $90 million project gained local and federal permits. The review by the PSC, he said, delayed the project by six to eight months and cost the company an additional $6 million to $8 million.
Graves said that will amount to many millions of dollars to ratepayers in the future. And the review by the state did not enhance the environmental aspects of the project, he said.
But Schmidt said this was a "premature attempt" by Southwest to escape regulation and the industry is not subject to competition now. Only a few major customers have been able to buy natural gas from a supplier other than Southwest, Schmidt said, and that authority has existed for a decade.
He told the committee, "If you think deregulation is necessary in the natural gas industry, do it ... make it competitive." Then he said the Legislature should require Southwest to provide its distribution system to any marketer who wants to sell gas to customers.
Schmidt suggested that the law be changed to require the PSC to conduct its review in a certain time, rather than junking the whole law.
Public Service Commissioner Galen Denio said it was "not in the public interest" to approve AB254 in its current form. He said the environmental reviews would not be eliminated only for Southwest but for other public utilities and governmental agencies such as the Los Angeles Department of Water and Power, which built and operates a major electric line through Nevada.
Mike Reed, representing Reno, Sparks and Washoe County, complained that the Southwest bill would mean the utilities could construct any facility without state approval. He suggested that local governments be given the right to review these projects.
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