Utility shareholders, regulators at odds over serving 'deadbeats'

Representatives of the Public Utilities Commission of Nevada say they are puzzled by a press release accusing the agency of sticking existing utility companies with deadbeat customers when competition begins.

Members of the Utility Shareholders Association of Nevada say PUC Chairwoman Judy Sheldrew said in a hearing last week that the proposed rules would assign customers with bad credit risks to Nevada Power Co. and Sierra Pacific Resources Inc. and good customers to competitors entering the market when the electric industry is restructured.

"The PUCN seems intent on taking actions intended to benefit new, out-of-state companies at the expense of Nevada's hometown companies, their shareholders and Nevada's utility customers," USAN President Donald Peckham said in a news release this week.

"I can't understand why the PUCN would assign customers with bad credit to Nevada Power and Sierra Pacific while allowing the Enrons of the world to pick up a group of customers with better credit profiles. This is bound to hurt those customers with bad credit, no matter how the PUCN tries to fix it, and help Enron and others by allowing them to serve a filtered group of better credit risk customers."

But the PUC says the shareholders apparently have misunderstood the proposal.

The commission has proposed an auction among potential providers to serve customers who don't choose a new service provider when competition begins on Jan. 1, 2000.

Among those customers would be consumers who either haven't been informed about the switch to the competitive environment or consumers who choose not to choose. Some experts say another group of consumers in the mix may be those who may try to avoid dealing with the utilities because they owe them money.

Nevada Power says its affiliate should be the company that serves all those that elect not to choose a new provider since it already serves all customers in Southern Nevada. The company argues that if customers decide not to choose new providers, they are indicating they are satisfied with the service they're getting.

"What's most puzzling about this is that the utility companies have reviewed the proposed regulations and are in agreement with them," said Kathy Kollar, a spokeswoman for the PUC. "I really don't know where the shareholders' organization is coming from."

Regulations on the so-called "provider of last resort" service are scheduled to be discussed in hearings next month with final adoption scheduled by the end of the month. The provision is being included in the regulations to assure all Nevadans of having electric power when competition begins.

Consumers will be asked to choose an electricity provider, but some concerns have been raised about whether companies will elect to serve rural customers that are difficult to reach. The provider of last resort regulations will guarantee that all consumers will be served, regardless of whether they choose a provider.

Kollar said the commission does not intend to turn customers with risky credit ratings over to the incumbent utilities. Under the proposed rules, the bidding process for customers would be completed by fall 1999.

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