Naked profit for the local power company's parent corporation is skyrocketing. After adjusting for a windfall that skewed last year's numbers and really doesn't count, why, the monopoly's net income is up 43 percent, the company reported this week.
That sparkling financial performance is thanks in part to corporate greed, and in part to state regulators who are either unwilling or unable to do their job. But really, it's the monopoly's captive Nevada consumers, who are forced to pay more than they should and, in many instances, more than they can afford, who can take most of the credit.
The state's Public Utilities Commission allowed the local electricity monopoly to impose big rate hikes last summer. That was on top of Nevada electricity rates rising about 80 percent since the start of the century.
Those higher power bills were triggered largely by long-running costs of incompetent decisions on the part of power company executives — decisions that the company made with the approval of an equally inept Public Utilities Commission.
For instance, Nevada Power's parent company, Sierra Pacific Resources, started out the century on a bit of a spending spree because it wanted to be just like all the big kids in the utility industry. So it tried to buy Portland General Electric. From Enron. The deal included 345 tons of highly radioactive waste stockpiled at PGE''s defunct Trojan nuclear plant — you know, the stuff that every Nevada politician says will never be dumped at Yucca Mountain.
Sierra Pacific would have gotten away with it, too, if not for those pesky federal bureaucrats. For several reasons, not the least being Sierra Pacific was stupidly willing to fork over an absurd $1 billion "goodwill" premium above and beyond the book value of PGE, federal energy regulators quietly determined that the deal wasn't in anybody's best interest, and the Nevada Legislature agreed. In effect, the Federal Energy Regulatory Commission and Nevada lawmakers saved Sierra Pacific from itself.
But Sierra Pacific's bright young things, along with Nevada's PUC, remained aroused by exotic "unbundling" schemes that were fashionable at the time, and by which the monopoly would be deregulated and allowed to broaden its bidness interests into various risky but supposedly more lucrative enterprises. Sierra Pacific wanted to be just like the flashy energy wholesalers of the era, such as Dynergy, Reliant, and of course, Enron.
Meantime, while Sierra Pacific executives were fitting themselves for expensive new cars, dashing new suits and pretty new wives, nobody at the company was paying any attention to what Dynergy, Reliant, and of course, Enron, were doing to Sierra Pacific and its customers: fleecing them by manipulating wholesale power prices.
To this day, Nevada customers are getting hosed by Nevada Power/Sierra Pacific's spectacular bungling; the rate hikes that were implemented last summer included nearly $250 million that tracks directly back to the utility still digging itself out from the so-called California energy "crisis."
Sierra Pacific is in the news of late for wanting to build coal-fired power plants. In addition to gagging everyone with pollution, building the hulking outdated and increasingly expensive coal-fired monstrosities is yet another way to gouge consumers — somebody has to pay for those plants, and it sure as hell isn't going to be Sierra Pacific's investors.
Given the track record of Nevada's energy/regulatory infrastructure, customers should fully expect two things if those plants are built:
- Sierra Pacific will spend much more than necessary on construction, try to put a huge mark-up on an already bloated price and pass all the costs to customers in even higher power bills.
- The Nevada PUC will let 'em do it.
Sierra Pacific's executives have changed, but the monopoly's mission is exactly the same as the mission of every other non-human, non-breathing corporation: make as much money as possible. So that's the company's excuse.
The reasons for the Nevada PUC's ineffectiveness are probably more complex, involving assimilation in the utility industry subculture, private-sector envy, pro-bidness ideology and passive disregard for the public interest, in addition to incompetence.
Democratic legislators in Nevada seem really quite enamored with the increasingly popular innocent bystander school of governance, or non-governance. Harry Reid's bad influence, probably. But perhaps someone in the state's executive branch might be persuaded to do, well, something.
If anybody knows anybody who knows Nevada Attorney General Catherine Cortez Masto, could you please tell them to tell her to take an interest in the PUC's duties, obligations and responsibilities to protect the public interest? Masto is thought to harbor aspirations for higher office someday, so you might mention that it's hard to remember a politician upsetting voters by being too tough on the power company.
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