Nevada's Power Poker

 

The governor delays restructuring, gambling on a summit in Vegas. But the utility calls, then sues, when talks break down.

Hold 'em or fold 'em? On March 28, Sierra Pacific Power and Nevada Power filed suit in federal district court to have the state's electric restructuring law declared unconstitutional, saying it threatens losses on purchased power contracts, fails to guarantee recovery of stranded costs, and has pushed the company's stock price down about 50 percent (for the eight months from July 28, 1999, the day when Sierra Pacific and Nevada Power had closed their merger, forming Sierra Pacific Resources as the new holding company). The suit also would attempt to overturn a series of orders from the state public utility commission to carry out the law, which have reduced or disallowed certain company rate requests.

The lawsuit came after Nevada Gov. Kenny Guinn had delayed the March 1 start of competition among electric suppliers, citing unsolved problems regarding deregulation, and only after talks had broken down at closed summit sessions convened by Guinn in Carson City and Las Vegas to try to iron out the mess.