A proposed Nevada Public Utilities Commission order would give Sierra Pacific Power Co. only $3.1 million of the $22.6 million it wanted from electricity customers to help cover a settlement with Enron Corp. over disputed power contracts.
The proposal for the Northern Nevada utility contrasts with the agreement earlier this year to boost rates for Nevada Power Co. customers in Southern Nevada to compensate for the entire $83 million Enron settlement paid by Nevada Power.
Yet state consumer advocate Eric Witkoski said that the agreement on Enron also provided that Nevada Power would reduce its claims in a separate rate case matter by about $100 million.
“I still think it’s a good deal,” Witkoski said of the Nevada Power agreement on Enron and rates.
At Sierra Pacific Resources, the holding company for the two utilities, spokesman Adam Grant said: “We don’t comment on orders that are pending.”
The utilities commission is scheduled to vote Wednesday on the proposal dealing with Sierra Pacific Power’s payment to Enron. Commissioner Rebecca Wagner, the presiding officer in the Enron case, wrote the order. One or both of the two commissioners could approve her order as written, reject it, or accept it with modifications.
Witkoski argued against comparing the Nevada Power settlement earlier this year and the draft order on Sierra Pacific Power.
“It’s a whole different set of facts in the South,” Witkoski said.
Witkoski and the staff of the utilities commission agreed to compensate Nevada Power for the full $83 million the Southern Nevada utility paid to Enron to settle lawsuits.
In return, Nevada Power agreed to drop arguments for 9 percent interest on a portion of a 2002 rate case that the Nevada Supreme Court reversed. The state’s high court order the utilities commission to restore $190 million of the amounts disallowed for Nevada Power in the 2002 case.
Nevada Power was expected to argue for 9 percent interest on that sum for the five years since then, plus another several years more of interest expenses while it recovered the $190 million through rates.
As part of the settlement on Enron, Nevada Power agreed to waive claims for those interest expenses. That saved ratepayers $100 million, Witkoski said.
Sierra Pacific Power’s $22.6 million request represented settlement costs plus legal fees to be collected over four years to end a dispute with now-bankrupt Enron.
While the utilities commission staff backed the proposal, the consumer advocate challenged the plan on grounds it stems from imprudent power-purchasing by Sierra during the Western energy crisis of 2000 and 2001.
Sierra Pacific representatives argued that the utility’s customers should cover the cost, noting that Sierra and Nevada Power were able to settle for less than a third of the $330 million that Enron sought in court.
Several wholesale power suppliers, including Enron, terminated contracts with the Nevada utilities during the energy crisis, saying that they were not satisfied with financial assurances.
Shares in Sierra Pacific Resources dropped 38 cents, or 2.26 percent, on the New York Stock Exchange Monday to close at $16.86.