Power company posts pretty profit: Let's look back in resigned disgust

Gas prices are impoverishing people and the last thing everybody needs is to get screwed by electricity bills. So of course that's happening too. And first quarter profits for the area electricity monopoly were 54 percent higher than last year, largely because lax state regulators let the power company raise rates on consumers. (AP)

A longish look at how Nevada shuts up and puts out for Sierra Pacific Resources and its subsidiary, Nevada Power, was published on the Gleaner several months ago, following a prior announcement of the company's investor-pleasing but consumer-robbing financial performance. (A piece of that rant was quoted in the Sun just the other day in the context of the point, inasmuch as there seems to be one, of Catherine Cortez Masto's tenure as Nevada attorney general.)

Indulge, please, a quick excerpt from that earlier Gleaner post:

Sierra Pacific is in the news of late for wanting to build coal-fired power plants ... Given the track record of Nevada's energy/regulatory infrastructure, customers should fully expect two things if those plants are built:

1. 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.
2. The Nevada PUC will let 'em do it.

One or two other observations were rendered as well, including but not limited to a review of some (only some!) of the regulatory and industry incompetence and political negligence that has led to energy prices that are among the highest in the country. Interested parties, both of you, are invited to read the whole thing here.

One point that wasn't made in that piece is the pathetic role of the nation's worst governor. As it happens, however, the lowly Gleaner has explored the scuzball's responsibility for your higher power bills on another website:

Inasmuch as the electric company is a monopoly, its practices, plans and prices are regulated by the state, which a) ... just agreed to let the bumbling stumbling monopoly raise your power bills so that the company can pass the cost of its mistakes on to you, and b) is, at last check, currently being governed by one James Arthur Gibbons.

Gibbons appoints the regulators who approve utility rates. Is he completely satisfied with the rigor that those regulators bring to bear on power company requests? Does Gibbons feel that power rates needed to go up 80 percent over the last seven years? Where was his legislative agenda to beef up the state consumer advocate's office, or toughen up the burden of proof on regulated monopolies, making it harder for them to raise rates on people who can't afford it so as to "send the right messages" to investors who can?

..."I will save you money," Gibbons said, over and over (and over and over and over and over and ...) on his way to the governor's office. Yet he has said nary a word about the one action a branch of state government has taken since his dead-o'-night inaugural that will actually cost us money.

One could go on and on. Oh look, one has. Repeatedly. Okeydokey, one last point (for now, anyway) ...

The great and powerful Harry Reid has grabbed the attention of the power company (and the coal industry) with his impressive noises in opposition to new coal-fired plants. So yes that's nice and good for Harry etc.

But there's something that scares Sierra Pacific Resources even more than seeing its power plant plans go poof: The prospect that politicians at the state and local level might wake up someday and demand that the corporation gets subjected to aggressive and pro-active regulatory oversight driven by a commitment to protecting consumers and the public interest, which is to say oversight of the sort that has been wanting in Nevada, but that a monopoly with captive customers so very richly deserves.

Hey, that almost sounded serious for a second there.

But you've got to at least admit that the prospect of genuine regulation would scare the bejeebus out o' the monopoly, if there was a teensy weensy indication that it might, you know, happen someday. 

Comments

[Goldy]

That is an extremely insightful analysis. See if you can get appointed to be consumer advocate ore even better, to the PUC.

[elizabeth cady stanton]

Inasmuch as you are the brilliant, sagacious Gleaner, didn't Enron play a part in all of this profiting while Nevada Power passed the losses on to the customers?

"Southern Nevada electric customers can expect to pay about 9 percent more if a $180 million award issued Thursday by the Nevada Supreme Court in favor of Nevada Power Co. is collected over one year.

In the 2002 utilities rate case decision, the utilities commission slashed a proposed $922 million Nevada Power rate increase to $486 million, concluding that Nevada Power made imprudent or unwise purchasing decisions on wholesale power and fuel for power plants. The court upheld the utilities commission's decision in all but $180 million of the $437 million in disallowances.

State Sen. Dina Titus, a Democratic candidate for governor, said voters are angry as they watch shares in Nevada Power parent Sierra Pacific Resources climb, executive compensation get richer and bills continue to rise.

"They don't think that's fair. I agree. I don't think it is either," Titus said."

http://www.reviewjournal.com/lvrj_home/2006/Jul-21-Fri-2006/news/8613786.html

http://www.lasvegasmercury.com/2004/MERC-Mar-04-Thu-2004/23348063.html

http://tdworld.com/news/Enron-Nevada-settlement/

Just my two cents.

[Rich Stafetas]

Who watches out for we the public in the PUC?

[Gleaner]

Ms. Stanton,

Yeah, Sierra Pacific didn't just get taken for a ride by Enron, it wanted to be like Enron, and Official Nevada was embarassingly eager to help.

That's all part of the "regulatory and industry incompetence and political negligence" that is reviewed in...

That earlier Gleaner post ...

I reference above . And that rantlet is also embedded with links to more history and background about the California energy "crisis" and Nevada's idiotic response, ifn's you really want to give your eyeballs a workout by repeatedly rolling them in dismay.

[MikeZ]

One just needs to look back at where Sierra Pacific and Nevada Power spread their money around over the past few years to get a better picture of why your bill looks like it does today.

Not shy with the checkbook, they've bought and paid for many of our Dems too, and I think they have some 'splainin' to do; the Dems, not the lobbyists.

[elizabeth cady stanton]

Dear Gleaner --

Perhaps I should not only wipe the egg off of my face but have my eyeballs checked by an ophthalmologist prior to acting upon your "ifn's" invitation since i want to read the rantlet thoroughly while rolling them in much more than dismay. I should have known that you were/had referencing the sordid and tawdry tale in its entirety.

Before I do, however, I think I shall throw open the window ala Howard Beale to yell out, "I'm as mad as hell and not going to take this anymore."

Network was released 32 years ago and this clip:

http://www.youtube.com/watch?v=dib2-HBsF08

could be ripped from headlines of today, of course, substituting terrorists for Russians.

Just my two cents.

ECS

[littlepeople]

First, let us familiarize ourselves with our current, all Gibbons, appointed Commission; NPUC

Scared by the collective inexperience or total connection with the regulated industry?

Now, consider that Yakima? of Nevada Power, was just in NYC talking about mergers and aquistions in the energy industry. This guy came from Florida, now Nevada, boy it would be swell to be a big shot for an even bigger company!, so...............

[Poohy]

Several years ago I ran for public office. I mention this because I got a mailing from Nevada Power telling me how important it was that NP made losts of money because old people rely on their Nevada Power dividends to live. The announcement today of a .10 cent dividend means that one would have to own about 50,000 shares for the dividend to mean diddly squat over what a simple T-Bill provides.

[GardenAnimal]

Many years ago our city fathers wisely decided that control of our water supply was too important to be left in the hands of private companies, so they bought them out and created a water district. The politics can get pretty wacky, but at least we are not paying extra for their profits. I submit that energy is too important to be controlled by for-profit companies. Let's nationalize, or municipalize Nevada Power.