Utilities merger should be complete by June

CARSON CITY -- Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno say their merger should be completed by June and they will be ready for open competition in early 2000.

And power prices, which have been going down, may be on the rise.

Mike Niggli, president and chief operating officer of Nevada Power, told the Senate Commerce and Labor Committee today, "We will be ready to go by the first quarter or the second quarter of next year," into a competitive market.

But Sen. Mike Schneider, D-Las Vegas, suggested there is plenty of confusion among the public about what will happen when electric deregulation occurs.

"The little old lady will not have a clue what is happening," Schneider told the utility executives. And his neighbors and friends don't understand this new marketplace, he said.

"Most of them are going to drift along," Schneider said.

Nevada law requires competition to begin in January 2000. But the state Public Utilities Commission is asking for that deadline be extended to an unspecified date.

Niggli and Malyn Malquist, head of Sierra Pacific, briefed the committee on the merger. They have found 250 duplicative positions in the two companies. A hiring freeze has been imposed and 70 people have left since the merger was announced last April.

Niggli said the merger "will make us stronger and less likely to be a target" for takeover by an outside company. Nevada Power is the 65th largest company in the nation and the merger will produce the 35th largest utility in the country.

They intend to sell off their power generating plants. Malquist said the sale will be to multiple companies. That will mean the new owners will be in immediate competition to sell their power back to the Nevada companies and any others who want to enter the Nevada market.

Generating power makes up 45-50 percent of a customer's bill, Niggli said. But he also warned that power costs are on the rise because there are not many new generating plants being built. And nuclear power plants are being decommissioned.

Niggli said losing the volume from some of the nuclear plants will mean there will be more competition for the available power.

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