Message-ID: <18175091.1075851000495.JavaMail.evans@thyme> Date: Mon, 29 Jan 2001 11:02:00 -0800 (PST) From: mitchell.taylor@enron.com To: skean@enron.com Subject: FW: PUCN Filing - Monday, January 29, 2001 Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: 7bit X-From: Mitchell Taylor X-To: Mark Palmer@ENRON, skean@enron.com, Mark Koenig@ENRON X-cc: X-bcc: X-Folder: \Steven_Kean_Oct2001_2\Notes Folders\Attachments X-Origin: KEAN-S X-FileName: skean.nsf FYI ---------------------- Forwarded by Mitchell Taylor/Corp/Enron on 01/29/2001 06:58 PM --------------------------- "Erickson, Vicki" on 01/29/2001 05:06:32 PM To: "'mitchell.taylor@enron.com'" cc: Subject: FW: PUCN Filing - Monday, January 29, 2001 > -----Original Message----- > From: Erickson, Vicki > Sent: Monday, January 29, 2001 3:04 PM > To: 'mitchell.taylor@enron.colm'; 'Mark.metts@enron.com'; > 'Paul.Kaufman@enron.com' > Cc: Oldham, Steve; Atkinson, Rich > Subject: PUCN Filing - Monday, January 29, 2001 > > Earlier today, Sierra Pacific and Nevada Power filed a plan with the > Public Utilities Commission of Nevada (PUCN) that is designed to stabilize > the energy markets in the state. Below is the text of a news release > announcing the emergency Comprehensive Energy Plan. Also attached is the > filing with exhibits. > > Let me know if you need anything else. > > Thanks, Vicki Erickson > > <<010129_application.pdf.pdf>> <<010129_plan.pdf.pdf>> > <<010129_appendix_a.pdf.pdf>> <<010129_appendix_b.pdf.pdf>> > <<010129_appendix_c.pdf.pdf>> <<010129_appendix_d.pdf.pdf>> > <<010129_appendix_e.pdf.pdf>> > > Sierra Pacific, Nevada Power Offer Emergency Plan to Assure > Reliable, Reasonably Priced Electricity for Nevadans > > Warning that Nevada must take rapid and dramatic action to avoid > being "engulfed by the financial and operational chaos" of the California > energy market, Sierra Pacific and Nevada Power CEO Walt Higgins today > outlined an emergency package of proposed long-term contracts, tiered > price increases, low income assistance and conservation programs to > stabilize the energy markets in the state. > In the plan filed today with the Public Utilities Commission of Nevada > (PUCN), the companies are proposing short-term emergency price increases > ranging from zero for certain low-usage customers to as much as 29 percent > for the state's largest energy users to correct serious imbalances between > the cost of wholesale power and retail prices. The average increase is 17 > percent. > The same imbalance bringing the near collapse of the California power > system is sweeping the Western U.S. and prompting nearly every other > utility to take similar measures to assure reliable utility service. > "Nevada, despite a good energy policy, is not immune from what is > happening in California," said Higgins at a news conference today in Las > Vegas. "This situation is unprecedented, unanticipated and potentially > disastrous for Nevadans if we do not exercise the leadership it takes now > to correct these imbalances in supply and demand and between cost and > price. No business can continue selling a product for less than it costs > them to buy it on the wholesale market. > "We know any rate increase is painful, but there is no escaping the fact > that the consequences of inaction are much more severe to the residents > and businesses of this state, as California clearly shows. Nevadans simply > cannot let the lights go out with the kind of irresponsible inaction we've > witnessed over the hill. Even with this increase, our rates will still be > lower than in California. > "Moreover, as part of the plan we propose programs to help low-income > customers and to help residents and businesses manage their total energy > bills." > In the plan filed today, the companies map out an emergency, > comprehensive plan to meet the state's short- and long-term energy needs, > focusing on new mechanisms to recover the skyrocketing cost of wholesale > power and including automatic price reductions as wholesale prices > eventually fall. The plan also calls for accelerated approval of new > long-term power contracts and encourages new power plant development. > Higgins said the plan also voices agreement with Nevada's go-slow approach > to electricity deregulation. > "The Nevada legislature and commission have shown a lot of foresight in > how to > handle energy deregulation in the state, and there is no reason to go > backward," said > Higgins. "What we need is to continue forward but in a way that clearly > anticipates the impact of market forces in the state." > Higgins noted that the pending sale of generation assets required as part > of the merger of Sierra Pacific Resources and Nevada Power will allow the > companies to buy power from the new plant owners at discounted prices for > two years. However, he said the California turmoil has slowed the sales > and put at risk these protective contracts. > Sierra Pacific and Nevada Power are proposing that the new mechanism > take effect on March 1, 2001. They propose that it be adjusted on March > 1, 2002, or sooner as wholesale prices fall and if divestiture of the > utilities' Nevada power plants is completed and contracts are in place > that guarantee the company can purchase power from those plants for two > years at 1998 prices. > Nevada Power customers who use 400 kilowatt hours (kWh) of electricity or > less per month and Sierra Pacific customers who use 300 kWh of electricity > or less per month would not see this increase in their power bills due to > the tiered rate. The proposal represents an overall increase in rates of > approximately 17 percent. > Higgins said that even with the July 2000 Global Settlement, which > requires Nevada Power and Sierra Pacific to file monthly rate adjustments > for fuel and purchased power (the F&PP Rider), the utilities have lost > over $125 million on fuel and purchased > power transactions. > "We are losing millions and millions of dollars now and it will get much > worse if this plan is not adopted," Higgins said. "We stand to lose > hundreds of millions more because the caps on price increases are keeping > rates artificially low. When the settlement was negotiated, no one > expected prices for fuel and purchased power would continue to skyrocket > to unheard of levels," Higgins said. "We've saved over $30 million in > operating efficiencies since the Sierra Pacific - Nevada Power merger, but > we simply do not have the same ability to control $1.5 billion annually of > fuel and purchased power expenses in an energy marketplace that's gone > haywire." > In today's filing, the utilities state they will continue to make > the monthly fuel and purchased power (F&PP) filings, which are scheduled > to expire on March 1, 2003. Both the F&PP Rider and the new emergency > Comprehensive Energy Plan (CEP) Rider proposed in the plan represent > dollar-for-dollar pass through of wholesale costs. > If approved, the CEP Rider will result in a monthly power bill increase of > approximately $6.37 for a typical Sierra Pacific residential customer > using 650 kilowatt hours (kWh) of electricity per month, and approximately > $12.63 for a typical Nevada Power residential customer using 1,100 kWh of > electricity. > Up to $5 million in revenue generated by the CEP Rider would be provided > to the State of Nevada to be used at the state's discretion to fund > conservation and low-income protection programs. > The proposed tiered rate offers protection for residents with low > electricity usage and > encourages consumers to be energy efficient. Residential CEP Rider rates > are based on electricity usage as follows: > > Nevada Power > ? First 400 kWh per month No charge > ? Next 275 kWh per month $0.01500 per kWh > ? Above 675 kWh per month $0.02000 per kWh > > Sierra Pacific Power > ? First 300 kWh per month No charge > ? Next 250 kWh per month $0.01500 per kWh > ? Above 550 kWh per month $0.02617 per kWh > - 010129_application.pdf.pdf - 010129_plan.pdf.pdf - 010129_appendix_a.pdf.pdf - 010129_appendix_b.pdf.pdf - 010129_appendix_c.pdf.pdf - 010129_appendix_d.pdf.pdf - 010129_appendix_e.pdf.pdf