Nevada not ready for utility deregulation, Guinn says

LAS VEGAS - The nation's fastest-growing state isn't ready for electric utility deregulation because an uncertain market could mean huge power bills for Nevada residents, Gov. Kenny Guinn said Wednesday.

''It would put the people in Nevada at a risk I cannot take because supply is low and demand is high,'' Guinn said at a news conference.

Guinn announced that he will appoint a bipartisan panel to ensure residential rate payers are protected in a competitive market. The panel also will advise him on a long-term energy policy for the state. He will announce the members of the panel within two weeks.

Guinn said the panel will report its findings to him by Jan. 15 and deregulation will begin Sept. 1 or before. Deregulation was originally supposed to begin in March, but was delayed once before Guinn announced his latest decision Wednesday.

Las Vegas-based Nevada Power Co. and Reno-based Sierra Pacific Power are the only power companies serving Nevada.

Deregulation would open the market to competition. Big casinos, the water district in Las Vegas and homeowners could shop around for alternate suppliers and better rates.

Some lawmakers had encouraged Guinn to delay deregulation, fearing residential consumers would not be protected in an open market.

Others want the Legislature to again take up the contentious issue when it convenes in February 2001. They contend a settlement reached this summer by the power companies, the Public Utility Commission, Attorney General's Bureau of Consumer Protection and three major casino operators violates the law while protecting utilities and major power users.

Guinn, a former president of Southwest Gas Corp., said too much is unknown about deregulation and how it would affect Nevadans. He's concerned customers would see a dramatic increase in their power bills because of what he called a nationwide energy crisis.

The governor doesn't want a repeat of what happened to electricity customers in San Diego, where the local utility was the first to become fully deregulated under a 1996 law.

Customers experienced a doubling and tripling of rates since May after San Diego Gas and Electric Co. passed on increases in wholesale costs to its customers.

Two other California utilities, both much larger than SDG&E, also purchase power on the open market but are under a rate freeze as they complete the transition to deregulation.

With Nevada's exploding population and triple-digit heat in the desert, more power will be used in the future. Guinn wants to encourage utility companies to come to Nevada because of the land and water available.

''We're looking forward to being the mecca of the West,'' he said.

Already, PG&E Corp. plans to build a natural gas-fueled power plant near Moapa, 45 miles northeast of Las Vegas, that could serve 1 million homes in Nevada and other fast-growing Western states.

The Paiute tribe wants to build a natural gas-fired plant on land it owns at the Moapa Indian Reservation. Its partner in the deal is Calpine Energy Co. of San Jose, Calif.