Editorial: Debate sparked by competition rules

The 1997 Legislature approved competition for the electric industry by the end of 1999 and gave the Public Utilities Commission the power to establish what the new market will look like. Under the legislation, electric utilities must give their competitors free and equal access to their power lines. And if these electric utilities decide to go ahead and provide service in this new competitive environment, then they'll have to do it through a separate affiliate.

One of the proposals in the Public Utilities Commission's current rule-making would prohibit Nevada Power from using its existing name as an affiliate that provides electricity service. Naturally, an existing monopoly wouldn't like the plan because it believes it would be at a competitive disadvantage with the new companies coming into the Southern Nevada market, especially with former California residents who would be more familiar with the names of California-based competitors.

But the commission asserts that customer confusion would follow if a monopoly's affiliate was allowed to use the same name. For instance, customers seeing the name "Nevada Power" might mistakenly assume it is still fully regulated by the commission, when in fact there will be virtually no regulation. Another potential problem is that Nevada Power's affiliate will have an unfair advantage over its competitors because of the huge name recognition it already possesses.

But the commission is really reaching with this logic. The commission should allow Nevada Power's affiliate to use the same name; to do otherwise would be unfair. California, the nation's leader in electric industry deregulation, allows the utility affiliates to use the same name.

California does have a safeguard for consumers regarding affiliate names that our commission should adopt: A utility affiliate should be required to run clear disclaimers in its ads and literature that it is separate from the utility and that it also is unregulated. Disclaimer requirements, with hefty fines and penalties for violations, would offer a reasonable compromise that balances the interests of both Nevada Power and its future competitors.

archive