Sierra Pacific may soon see end of rate freeze | TahoeDailyTribune.com

Sierra Pacific may soon see end of rate freeze

Susan Wood, Tahoe Daily Tribune

Electricity rates may surge within a few months for Lake Tahoe residents.

Sierra Pacific Power, a subsidiary of Sierra Pacific Resources based in Reno, has filed an amendment to an application to end the rate freeze that has remained in effect for California under AB1890. The four-year power deregulation act Californians were subject to has all but been eliminated, given the state’s recent energy woes.

An administrative law judge of the California Public Utilities Commission essentially gave the green light in September to the power provider to request a 2-cent-per-kilowatt-hour increase. Sierra Pacific, provider of power to 44,000 Californians, filed the request Oct. 25.

Approval that may come at the end of this month is contingent on whether the utility is able to show in its case “extraordinary circumstances requiring urgent commission action.”

Sierra Pacific analyst spokeswoman Faye Anderson said the rate increase, if approved, would start before March 31 — the date the rate freeze is due to end anyway.

“Any interim rate increase for its California operations prior to April 1, 2002 will have to be based, in my opinion, on a showing that the rate freeze has ended for Sierra,” Judge Robert Barnett ruled.

In the same opinion, the judge declined the power provider its last request for an interim rate increase for fuel-cost recovery.

Sierra Pacific generates about half its electricity power and pays for the natural gas to power the plants. The other half it buys from the wholesale market.

“Considering the financial status of the entire utility, I see no emergency within the meaning of (the application). Sierra is able to provide adequate service to its California customers under present rates,” Barnett said.

Sierra Pacific reported its second consecutive quarterly profit last week after losing in four previous quarters.

But Anderson said the rates charged to customers need to go up so the company may purchase electricity in an atmosphere dominated by skyrocketing power costs.

In 1994, Sierra Pacific paid as low as $20 per megawatt hour. In 2001, the costs soared to more than $140.

Add to that inflationary costs, and the company says it needs help.

Come January, the utility plans to also file with CPUC for a general rate increase to recover costs incurred from operating expenses such as equipment maintenance and labor. If approved, the hike would raise rates by at least 10 percent.

Across the border, the company plans to file for a general rate increase with the Public Utilities Commission of Nevada by next month.


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