Advocate decries rate plan

The proposal also could make small residential power users even less attractive customers for potential competitors after the start of competition in the power industry March 1, Consumer Advocate Fred Schmidt says.

"We are going to go to war over this issue of whether the company should start billing on a flat rate," he said. "As far as I'm concerned, it is the most radical price change that I've seen proposed in the 20 years I've been in this business."

Faye Andersen, a spokeswoman for Sierra Pacific Resources, the parent company of Nevada Power, disagreed with Schmidt's suggestion Nevada Power's own retail customers would be asked to pay the fixed distribution rate.

"This rate will not be charged to end-use customers," Andersen said.

Instead, it is a wholesale rate that alternative power companies will pay for use of Nevada Power's lines so that they can sell power retail, she said.

Anderson stopped short of ruling out applying the flat rate to retail customers, saying, "What happens in the future depends on what the (Public Utilities Commission) decides."

Schmidt said Sierra Pacific Power Co. outlined its position in a similar case affecting customers in northern Nevada. He noted that Sierra Pacific Power and Nevada Power are both subsidiaries of Sierra Pacific Resources.

"I would expect consistent positions" from the two subsidiaries, he said.

Sierra Pacific executives and attorneys told state regulators they aren't asking to apply the rate change to customers who continue to buy power from it, only to alternative retail sales companies, Schmidt said.

But he said the commission could decide to apply the distribution service charge to customers who remain with Nevada Power and Sierra Pacific, which will be power "providers of last resort" after deregulation starts March 1.

In addition, Sierra Pacific officials said they may file another rate case before March 1 and ask the commission to apply the flat rate directly to end-use customers, Schmidt said.

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