Sandoval ignored potential backlash and did good by Nevadans

One of the last moments of drama in the 2011 Legislature's final performance was whether Gov. Brian Sandoval would veto NV Energy's bill shifting the costs of building transmission lines to provide power to California. Or would he sign the bill and place that monkey on the backs of Nevada ratepayers?

Lobbyists for the bill included the governor's two close friends Pete Ernaut and Greg Ferraro who had persuaded Sandoval to give up his federal judgeship and run for office. Sandoval himself had represented stockholders in NV Energy when he was a private attorney. While running for office, he worked for Jones Vargas, which is closely tied to NV Energy.

Yet the Republican governor bucked personal and professional relationships and surprised doubters like me who thought those relationships would prevail. He vetoed Assembly Bill 416 last Friday.

Sandoval's three-page veto message was based on policy, not juice. The governor made it clear this was one bad bill deserving of his slap-down.

This bill would have given NV Energy the ability to recoup from Nevadans the costs of building transmission lines to California to sell power to Californians. Backed by Senate Majority Leader Steven Horsford, D-Las Vegas, it started out as Senate Bill 488 and sailed through the Senate, only to die in the Assembly.

The bill was criticized both for the way it was passed and its content. The Churchill County commissioners said that "unethical behavior" had produced the bill and asked that it be vetoed, saying it was "an unethical subversion of the legislative and public process that Nevada values."

In the final hour of the Legislature, the chairman of the Senate Energy Committee, Sen. Mike Schneider, D-Las Vegas, introduced a 25-page amendment to Assembly Bill 416, a solar energy bill, including the language sought by NV Energy.

The amended bill returned to the Assembly and was approved despite legislators later admitting they hadn't read the bill or known what it contained. Sadly, that isn't unusual in the final days of any legislative session.

NV Energy insisted the estimated $1 billion cost of the transmission lines, as calculated by the Bureau of Consumer Protection, was too high.

No matter what the cost, Sandoval eviscerated the bill in his veto. It became clear that his work as a lawyer practicing in the field of utility law gave him a deeper understanding. Plus, his experience as a federal judge helped. At one point, he took the language in SB488 and laid it side by side with the amended version of AB416. The changes were subtle but dramatic.

To understand his veto, you must understand the purpose of resource plans. On a periodic basis, utilities submit resource plans to the Public Utilities Commission for approval of rate changes. The process is designed to protect ratepayers, and public hearings are required.

"AB416, however, instead of seeking to strengthen consumer protections for the people of this state, substantially reduces the protections the resource plan approval process provides," Sandoval wrote. "It provides for cost recovery for energy exportation, in some cases without prior approval, contrary to traditional rate-making principles."

Nevadans shouldn't be forced to pay the costs of building transmission lines to provide service to Californians, Sandoval wrote. He also noticed the bill had no provision for ratepayers to receive reduced rates if the sale of power to California was a financial success.

"To increase utility rates on Nevadans struggling to recover from a severe economic recession would result in the imposition of an unnecessary and unfair burden on our recovery," he wrote.

Citizens are praising the governor for what he did, saying it showed courage. I concur.

Ignoring the potential political backlash and the dismay of trusted friends, Sandoval sliced through the gobbledygook and demonstrated this governor has gumption.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. Email her at Jane@reviewjournal.com or call her at (702) 383-0275. She also blogs at lvrj.com/blogs/Morrison