News Releases

Nevada Legislature Approves Electric Restructuring Bill

Jul 8, 1997

Sierra Pacific Power Company
Contact: Karl Walquist/Robert Sagan
Phone: (775)834-4345

For Immediate Release

Legislation to restructure Nevada?s electric utility industry was approved Sunday by the State Legislature and sent to the governor. Assembly Bill 366 (AB366) will let Nevadans choose electricity suppliers for some services beginning Dec. 31, 1999.

"The legislation represents a very workable compromise among the many different interests that took part in the process," said Walt Higgins, president and chief executive officer of Sierra Pacific Power Co."We believe competition among electricity suppliers will benefit customers.

"We?ve been preparing for utility restructuring for the past few years," he added."Hard work by our leadership team and employees has prepared us for competitive markets and we?re looking forward to the challenge."

Under AB366, customers may be able to purchase electricity directly from generating companies or marketers who will buy power and re-sell it as soon as Dec. 31, 1999. Electric transmission and distribution services will not initially be subject to competition and will still be provided by Sierra Pacific Power.

The legislation also includes the following provisions:

· Electric utilities that currently serve Nevadans shall be designated to provide electric service to customers who are unable to or who choose not to select an alternative supplier.

Prices set for residential service by Sierra Pacific or alternate suppliers must not exceed what is already charged for that service on July 1, 1997, for at least two years after the advent of open competition. (Sierra Pacific already has a price freeze in effect for both electricity and natural gas service through Dec. 31, 1999.)

· Shareholders must be compensated fully for all unmitigated stranded costs. (Stranded costs are investments made by utilities that may no longer be economical once competition begins.)

· Each alternative electric provider must obtain a license from the Nevada Public Service Commission, which has been renamed the Public Utilities Commission of Nevada (PUCN).

· If rural electric cooperatives, cities, counties or other local governmental entities apply for a license or directly or indirectly act on behalf of an alternative seller outside their service area, they too will be subject to AB366.

·A small portion of all the electricity sold by every seller of energy must be from renewable sources beginning Jan. 1, 2001 (2/10ths of 1 percent increasing biannually by 2/10ths of 1 percent until 1 percent is reached). Of that total, 50 percent must be solar energy produced in Nevada. Sierra Pacific is deemed to be in compliance with this requirement because 9 percent of its electric resources are provided by local geothermal power. However, between Jan. 1, 2005 and Dec. 31, 2009, Sierra must add solar to its mix of resources until 1/2 of 1 percent of the utility?s electric supplies are from solar sources.

· The governor shall appoint one new member of the PUCN, which will have a total of three members, and the PUCN shall prepare a reorganization plan to submit to the appropriate legislative committee.

·The PUCN will develop regular forecasts of electric capacity and energy based on information provided by each entity providing a potentially competitive service. If the PUCN determines sufficient capacity will not be available at a reasonable price, it may establish equitable obligations for customers, electric distribution utilities or alternative sellers.

· The Office of the Consumer Advocate was renamed as The Bureau of Consumer Protection, and will be headed by the Consumer?s Advocate.

· The Consumer?s Advocate will enforce anti-competitive and unfair trade practices laws but may not exercise any powers to enforce any criminal statute for any transaction or activity that involves a proceeding before the PUCN if the Consumer?s Advocate is participating in that proceeding as a party.