Denial of a power-rate cut could dim the lights on Northern Nevada's economic growth, according to the economic development authorities in the region.
The Northern Nevada Development Authority and the Economic Development Authority of Western Nevada on Monday released a joint statement calling for Nevadans to bite the bullet and accept a rate hike to maintain reliable power.
"Businesses have been saying that if (Nevada has) a problem like California, they're going to look somewhere else," Ron Weisinger, the executive director of the Northern Nevada Development Authority, said of businesses looking to relocate in Northern Nevada.
"The board of directors (of the development authorities) have both agreed that there's a need for a power-rate increase, otherwise all of us are going to have the lights go out."
The statement calls for members to make that concern known to Nevada's Public Utilities Commission, which is expected to make a decision on or before June 1.
"We're gratified by (the development authorities') support and their recognition that Sierra Pacific is a vital part of the community and the health of our company affects the customers we serve," said Jeff Ceccarelli, president of Sierra Pacific Power.
The commission has heard arguments to raise rates to recoup costs of purchasing fuel during the western power crises last summer, and other related costs. The Nevada legislature approved such cost recovery in 2001.
The power company has said repeatedly that its purchasing practices last summer were prudent, given the extreme financial upheaval of western energy markets.
Without the increase, Northern Nevada's power supply could be in jeopardy.
"That is the concern, to have a financially healthy utility," said Faye Andersen, manager of corporate communications, "to have enough resources to provide safe and reliable power to our customers."
If the increase is granted, the rate hike would raise rates for the "fuel and purchased power" portions of customers' bills by approximately 10 percent overall. The net effect on the typical residential customer's rate would be 3.5 percent.
Sierra Pacific has felt the effects of last year's power crises all the way to Wall Street. Several financial firms downgraded stocks for parent company, Sierra Pacific Resources, after the utilities commission approved only $485 million of the $922 million rate increase requested by the south's Nevada Power Company, also owned by Sierra Pacific Resources. That precipitated an almost 50-percent plunge in the stock's price from $15.09 per share to $8.06 on April 2.
While business organizations may feel the rate hikes are justified, Tim Hay, Nevada's consumer advocate and head of the attorney general's bureau of consumer advocacy, has said he has reservations about the legitimacy of the request. He considers errant business practices the culprit for additional costs and reason enough to deny most, if not all the rate increase.