Wednesday, Oct. 30, 2002 | 10:54 a.m.
The advertising campaign against the Question 14 ballot initiative that asks Clark County voters whether they want a nonprofit public agency to provide their electricity has been financed almost exclusively by Nevada Power Co.
In a campaign report released Tuesday by Citizens Against 14, the coalition listed $1.638 million in contributions through Thursday, with $1.622 million coming from the Las Vegas utility.
Almost all of the $1.487 million in expenses was credited to three West Coast advertising and consulting agencies.
The advisory measure placed on the Nov. 5 general election ballot by the Clark County Commission does not refer specifically to a $3.2 billion bid by the Southern Nevada Water Authority to acquire Nevada Power from parent Sierra Pacific Resources. But there has been a blurring of lines between the bid and ballot measure.
Nevada Power President Pat Shalmy said Tuesday that the investor-owned utility decided to fight Question 14 "because we said from the beginning that it was unclear, vague and misleading."
"We felt from the beginning that something had to be done to inform the voters what we felt this meant," Shalmy said. "We think Question 14 is very biased against the company. When you put in language that says 'nonprofit' instead of 'government,' that's misleading."
But state Consumer Advocate Timothy Hay said the fact that Nevada Power has supplied almost all the money for the Citizens Against 14 television, radio and direct mail advertising blitz "diminishes" the argument that a broad coalition is behind the effort.
"It's an enormous amount of money to spend on a local ballot issue," Hay said. "We would hope this expense doesn't float back to ratepayers. For a company that was facing bankruptcy it seems like an inappropriate use of $1.6 million. And over the next week I wouldn't be surprised if they spent another $500,000 to $600,000."
The water authority is precluded by law from engaging in political campaigns because it is a public agency. There is a citizens group that supports Question 14 but it has not done any media advertising or engaged in any fund-raising activities.
Shalmy said the Nevada Power campaign contributions would come out of company profits or shareholder value and wouldn't be paid for by ratepayers.
"It's not ratepayer dollars," Shalmy said. "We're strictly regulated on these sorts of things. We're going to play it fair and square."
Joyce Newman, president of the Utility Shareholders Association of Nevada, said she would not "second guess" the decision made by Sierra Pacific's board to finance the opposition to Question 14.
"I'm sure the board took a lot of things into consideration but I'm not privy to all the things that went into that decision," Newman said.
But water authority spokesman Vince Alberta said it was "sad" that the utility would fight the ballot initiative while refusing to negotiate on the bid to acquire Nevada Power. The water authority has estimated that it could save ratepayers at least 20 percent immediately because it has a superior credit rating and therefore can finance Nevada Power's equity and debt at much lower interest rates than can the utility.
"It's amazing that they would spend $50,000 to $80,000 a day to pay for an advertising campaign that's full of lies and misinformation to confuse the public," Alberta said.
Only $16,162 has been collected by Citizens Against 14 from sources other than Nevada Power. This included $5,000 from the Nevada Taxpayers Association, whose president, Carole Vilardo, is chairwoman of the coalition. Other contributions included $2,000 from the Nevada Manufacturers Association and $1,000 from Sprint.
The advertising and consulting expenses included $572,250 to Winner and Mandabach Campaigns of Santa Monica, Calif., which prepared the television and radio spots. In the past year, Winner and Mandabach has been involved in campaigns to support Indian gaming in Idaho and museum expansion in Los Angeles, as well as an effort to oppose an Oregon food labelling initiative involving genetically engineered food.
Target Enterprises of Encino, Calif., a media buyer that was paid $560,000, has been involved in other referendum campaigns and has worked on behalf of Republican candidates. Another advertising firm, Michael D. Myers and Co. of Seattle, was paid $344,235.
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