British columnist finds favor with consumer advocate

The war of words between the Nevada consumer advocate and Sierra Pacific Resources took an international tone Friday with the issuance of a news release by advocate Tim Hay extolling a British newspaper columnist's comments that the utility is incompetent.

Hay cited an article by Financial Times columnist John Dyson that Nevada Power Co.'s $922 million rate increase request appears to be the result of the company's "thorough incompetence."

"The reporter from the Financial Times is a real utility expert and he spent nearly two weeks in Las Vegas, sitting in on the hearings. I thought his encapsulation of the rate case was straightforward and unbiased. His was kind of a fresh face in the mix and I thought he picked up on some interesting aspects," Hay said.

Sierra Pacific spokesman Karl Walquist questioned Hays' decision to send out the news release at all -- and particularly on the attorney general's stationery.

"It's outrageous that the consumer advocate would send out a press release on the attorney general's letterhead in an attempt to lend credibility to an opinion column," Walquist said. "There was some reporting, but it was an opinion by a reporter biased against Sierra Pacific.

"People ought to be concerned that the consumer advocate is taking that approach because that is misleading," Walquist said.

Hay said the Financial Times article raises concern over Nevada Power's transactions with Enron following Sierra Pacific's failed attempt to purchase Portland General Electric from Enron. Sierra Pacific Resources is the owner of Nevada Power Co.

The Financial Times column suggests that Sierra Pacific's fear of a lawsuit by Enron may have influenced subsequent transactions between the two companies and that a lawsuit could have netted Enron hundreds of millions of dollars. Instead, Enron settled for $8 million.

"Now the Nevada PUC has to decide whether to take this billion dollars out of the depressed state, as well as hundreds of millions more for this year's overpriced purchases, or let Sierra Pacific's shareholders bear the cost of what appears from the public record to be thorough incompetence," wrote Dyson.

"Some of the comments that were made in the article were utter nonsense," Walquist said."It makes reference to the fact that the acquisitions came apart and implies in the commentary somehow a link between the settlement which the reporter interpreted as fair and tries to link that somehow to energy purchases that had been made months prior to that."

Walquist said the power was bought at market price.

"We didn't pay exceptional prices for that power," he said.

The article, however, claims Sierra Pacific made huge power purchases between February and April 2001 with little or no analysis. "In fact," Dyson wrote, "there is virtually no record of the decision-making process, apart from recollections of a voice-mail here or an e-mail there. These were the biggest monetary decisions ever made by the people who made them, and yet the memories of the company's witnesses are astonishingly vague."

Hay said he sent out the news release on Dyson's article Friday because many Nevadans don't read the Financial Times and he thought it was newsworthy.

Testimony concluded Thursday in Las Vegas on Nevada Power Co.'s $922 million rate hike request.

The Public Utilities Commission is expected to make its decision by March 29, Hay said.

"I wouldn't even hazard a guess what's going to happen," he said. "We're optimistic. It's in the hands of the PUC now to do the right thing for the rate payers of Nevada."

READ THE ARTICLE

On the web:

Financial Times

http//news.ft.com

Sierra Pacific Resources

www.sierrapacificresources.com