Deregulation bill attacked in Assembly

At a hearing Tuesday, several members of a committee on electric utility deregulation attacked provisions of SB438, which contains comprehensive changes in deregulation.

The critics include the panel chairman, Assemblyman Douglas Bache, D-Las Vegas, Assistant Majority Floor Leader Barbara Buckley, D-Las Vegas, and Minority Floor Leader Lynn Hettrick, R-Gardnerville. In order for the full Assembly to vote on the bill, the special committee must approve it by midnight Friday.

Hettrick asked about a Nevada Power Co. study that showed residential customers are getting a 25 percent subsidy from commercial and industrial utility customers under regulation.

The utility wants to eliminate the alleged residential subsidy and lower commercial and industrial rates.

Under SB438, Nevada Power would use gains from the sale of power plants to offset the cost to residents of eliminating the subsidy, explained Steve Rigazio, chief executive officer at Nevada Power Co. of Las Vegas.

The utility might "have to eat it" if it didn't get a large enough gain to offset the increased rates for residential customers, Rigazio said.

Hettrick wasn't convinced. He said residential rates might soar. In rural areas, the residential customer could face huge rate increases, he said.

"I think (the rural resident) gets burned big time," Hettrick said.

Buckley said a three-year freeze on rates for residential customers and a two-year rate cap under the first deregulation law could result in a massive rate increase for residents when the freeze and cap end.

"It's not a freeze at all. In five years, all hell is going to break lose in residentia (rates)," Buckley said.

Rigazio said Nevada Power was taking a big risk with the rate freeze, because energy and wholesale power prices are starting to climb.

Buckley complained that Nevada Power's rates won't be frozen until it gets another rate increase for purchased power and energy costs.

"Why would we want to freeze it at a lot higher rate than we agreed to in the last session (of the Legislature)," Buckley said.

Rigazio said Nevada Power is seeking to recover $42 million it has already spent and hasn't recovered from customers.

A few dozen air conditioning, heating and plumbing contractors, along with their families, in Las Vegas participated by teleconference Tuesday.

They oppose a provision in SB438 that would allow Nevada Power and Sierra Pacific Power Co. to use their names and logos for the air-conditioning and heating business, because they fear the utilities would drive them out of business.

Robert Crowell, a lobbyist for the utilities, argued that the names and logos of the two utilities belonged to their stockholders.

Scott Meier, a leader of the air conditioning group, said the utilities used their monopolies to develop name recognition and a reputation for reliablity and saftey, unlike companies such as Sears. "We've all paid for that (utility) name and goodwill," Meier said.

"The taking of a person's name and identity is a very serious issue," Crowell said.

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