Paying Sierra Pacific’s bills

Across Nevada, thousands of people complain that their utility bills have doubled. Meanwhile, the Public Utilities Commission of Nevada is considering a near billion-dollar rate increase for southern Nevada. A second billion-dollar hike request lurks in the wings. More rate hikes line up like storms in the Gulf of Alaska.

A year ago, flocks of soothing press releases flew from the offices of Gov. Kenny Guinn and the utilities. Nevadans need not fret, the releases said; the state deregulated its utility industry sensibly.

Nevadans now pay more for gas and electricity than Californians. Washoe and Carson residents pay 1.3 times the nation average. How did we get here? Nevada’s best and brightest goofed.

Today, the West is awash in energy. With the threat of rolling blackouts over, the reasons for mines and utilities to leave the grid no longer exist. Every prediction went awry.

In 2001, big business interests sniped at each other. Rolling blackouts loomed. Gov. Guinn called mining, gambling and utility lobbyists into his office and demanded solutions.

The miners and gamblers wanted the right to buy cheap electricity from outside Nevada. The utilities wanted “deferred energy accounting” and no independent audits.

Guinn declared the utilities would “go broke in weeks” without deferred energy accounting. Legislators bowed to Guinn, the gamblers, utility czars and transnational mining companies.

In the meantime, Sierra Pacific Resources, the owner of Nevada’s biggest utilities, sought to purchase Portland General Electric, an Oregon utility owned by Enron Corp. Wall Street decided that Sierra lacked the resources to make the purchase. Sierra Pacific Power stock nose-dived. The deal was off.

A year later, the lights stayed on, and the demand for an independent utility audit went away. The mines and casinos won the right to buy electricity elsewhere.

Critics charge that Nevada utilities sought to make billions by speculating on energy futures at prices that seem exorbitant today. Utility officials say they could not guarantee keeping the lights on without the contracts.

The utilities hope to use the deferred energy accounting law to force rate payers to reimburse them for their speculative losses. Because power demand plummeted, Sierra Pacific Resources also needs the mining and casino business it once scorned.

With only partial audits for most of a decade, state regulators do not know how much profit the utilities make. Much of Nevada utility regulation takes place in an accounting black hole.

How can Nevadans survive this debacle?

The Legislative Commission can find $5 million for an independent audit of Sierra Pacific Resources and its holdings. Regulators can limit speculation by utilities. Gov. Guinn can delay the exit of casinos and mines from the grid by emergency decree.

Still, Nevada’s economy will suffer; much harsh damage to seniors and the poor cannot be undone. Only time or a voter revolt will lift the unfair burden foisted onto small rate-payers.

Until then, every rate-payer should sign petitions protesting the pending rate hikes.