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Enron Mail |
FYI
---------------------- Forwarded by Mitchell Taylor/Corp/Enron on 01/29/2001 06:58 PM --------------------------- "Erickson, Vicki" <VErickson@sppc.com< on 01/29/2001 05:06:32 PM To: "'mitchell.taylor@enron.com'" <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
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