Bid denied for exit from rule on utility holdings

Federal regulators on Thursday decided they have authority over investment companies that hold huge stakes in electric utility companies, such as Horizon Asset Management, which is the largest investor in NV Energy Inc.

Horizon of New York and Kinetics Asset Management, a closely associated firm, last year held 27 percent of the outstanding shares in NV Energy, the utility holding company formerly known as Sierra Pacific Resources.

The Federal Energy Regulatory Commission on Thursday denied a request to exempt Horizon from legal requirements that large investors must report holdings of $10 million or more in transmission companies, electric utility companies and electric utility holding companies.

Commissioner Jon Wellinghoff, Nevada's first consumer advocate, supported the FERC decision.

Exempting investment companies like Horizon from FERC regulation "could allow those entities to exercise control over public utility companies or transmitting utilities in a way that may harm energy customers," Wellinghoff said in a statement.

Eric Witkoski, chief of the attorney general's Bureau of Consumer Protection, welcomed the federal action.

"This is a good sign, I think," he said.

A Nevada law requires investment companies to receive Public Utilities Commission authorization before acquiring more than a 25 percent stake in a Nevada public utility.

In June, the utilities commission received a report from staff counsel Alaina Burtenshaw, who concluded that Horizon held only a 17 percent stake in NV Energy and had not violated the state law.

Federal law appears to be a better tool for regulating large stock holdings in electric utilities, than the state law, Witkoski said.

The latest report from Bloomberg News shows Horizon owned 10.2 percent of NV Energy shares on Sept. 30 and remained NV Energy's largest single investor, but Bloomberg News didn't say whether that includes Kinetics' position in NV Energy. Horizon's NV Energy holdings were worth $220 million on Thursday.

Horizon sold 11.6 million shares before Sept. 30, Bloomberg News reported.

Horizon didn't return calls for comment Thursday on the issue. NV Energy said it doesn't comment on its shareholders. The Public Utilities Commission declined comment, spokesman Sean Sever said.

FERC ruled that Horizon is a public utility holding company and is required to file notices of its stock position at NV Energy. However, FERC said Horizon could acquire less than 10 percent of NV Energy shares without notice and less than 20 percent without notifying FERC if its holdings are combined with those of an affiliate.

NV Energy shares rose 31 cents, or 3.5 percent, Thursday to close at $9.27 on the New York Stock Exchange.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.