LAS VEGAS, Nov. 30 /PRNewswire/ -- Nevada Power Company (SRP) filed a
request with the Public Utilities Commission of Nevada (PUCN) today to recover
the actual costs for wholesale power and fuel it purchased for customers
during the height of the energy crisis. The request, prescribed under a law
passed earlier this year designed to delay further rate increases during the
crisis, seeks to increase rates approximately $307 million (21 percent).
These rates are expected to remain in place for three years.
"This amount is somewhat less than we thought it might be even a few weeks
ago, but it is still a difficult increase for our customers," said Mark
Ruelle, president of Nevada Power. "It has been frustrating for all of us to
endure the costs of the California energy disaster, but Nevada's approach of
spreading these costs out over time has helped keep the lights on in our state
during a period of unprecedented turmoil in this industry."
The costs for wholesale power and fuel purchased by utilities to meet peak
demands soared to record levels earlier this year in most western states, far
outpacing the amount covered in customer rates. Nevada Power lost more than
$300 million, nearly a fourth of the total wholesale power balance, before the
Nevada Legislature stepped in. Under the Nevada law passed during the worst
of the crisis, electric rates in the state were temporarily frozen and Nevada
Power was assured it could recover its actual and prudent costs the following
year.
"This law served as an important signal to others outside Nevada that it
was safe to loan us money or invest in our operations to keep the lights on,
knowing that we pay our bills," Ruelle said. "It has been a painful price to
pay, but reliability is critical to our way of life in Nevada and this
approach has shown there is a way through all the uncertainty that other
states are currently facing."
Ruelle added that Nevada is not the only state faced with addressing the
impacts of the energy crisis. Oregon, Washington, Idaho, Montana and Utah are
experiencing similar issues and California is redirecting billions of dollars
away from other important public services, creating a shortfall in the state's
general fund. "Fortunately, Nevada is not facing that type of situation," he
said. "We will continue to explore every opportunity to find relief for our
customers, including discussing options with our suppliers, seeking changes in
federal policies that favor California and taking advantage of lower energy
costs going forward."
Following a thorough review and pending approval by the PUCN, rate changes
are expected to take effect in April 2002. This request is for recovering
wholesale fuel and electricity purchases and what it cost the company to carry
the balance. All wholesale costs are passed on to the customer,
dollar-for-dollar after an extensive review conducted by the PUCN staff and
the Bureau of Consumer Protection.
Until June, Nevada Power expected the proceeds from sales of surplus
energy would reduce the deferred balances. Changing market conditions
compounded by federally imposed price limits, drastically reduced prices for
future energy sales, significantly reducing the company's ability to offset
its deferred costs.
Headquartered in Nevada, Sierra Pacific Resources is a holding company
whose principal subsidiaries are Nevada Power Company, the electric utility
for most of southern Nevada, and Sierra Pacific Power Company, the electric
utility for most of northern Nevada and the Lake Tahoe area of California.
Sierra Pacific Power Company also distributes natural gas in the Reno-Sparks
area of northern Nevada. Other subsidiaries include the Tuscarora Gas
Pipeline Company, which owns a 50 percent interest in an interstate natural
gas transmission partnership, several unregulated energy services companies
and Sierra Pacific Communications, a telecommunications network development
company.
SOURCE Nevada Power Company
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CONTACT:
Sonya Headen of Nevada Power Company,
+1-702-367-5222
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