Opening briefs are due later this month in a tax case that could end up costing the state more than $50 million.
In 2003, Southern California Edison went before the Nevada Tax Commission, arguing it was due $36 million in tax refunds. The power company claimed the state had imposed an illegal use tax on the coal burned at its Southern Nevada generating plant dating back to March 1998.
The tax commission in 2006 agreed. But the award was thrown out by the Nevada Supreme Court, which ruled the Tax Commission violated Nevada's open meeting law by hearing the entire case behind closed doors.
Southern California Edison went back to the tax commission last year but, in June, the commission rejected the request for a refund.
The utility filed suit in January in Carson District Court. Its complaint charges that taxing the use of out-of-state coal at its Laughlin generating station is illegal.
Nevada law, utility lawyers argue, exempts minerals from the sales and use tax. They claim the U.S. Constitution prohibits treating imported coal differently.
After six months of preliminary legal wrangling, Carson District Judge Todd Russell ordered both sides to submit opening briefs on Aug. 28.
The state originally set $36 million aside to pay if needed, but that money was redirected last year to help with the state's revenue shortfall.
The potential cost to the state, however, has continued to grow at 6 percent interest a year. If it loses the case, the state would owe more than $51 million.
No date has been set for the trial.