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The Regulators Forum - States to Feds: Don't tread on Me

How far do states rights go in transmission planning?
Fortnightly Magazine - November 15 2003

financial consequences of what we do and what the utilities do. As you know, a number of utilities have opted to pursue investment activities outside the regulated utility, such as developing merchant subsidiaries or pursuing other non-related activities. Many of these diversification forays have ended badly or created some financial challenges for the corporate parent. While I firmly believe a robust wholesale electric market is a long-term benefit to all ratepayers, it is important that state commissions continue to protect the ratepayers from any adverse impacts of such decisions.

Western Thinking

Nevada: Still Reeling

Donald L. Soderberg, chairman, Nevada Public Utilities Commission

F: After the August blackout, what is your commission doing to ensure such an event doesn't take place again?

Donald L. Soderberg: The Nevada commission is an active participant in both the Committees of Regional Electric Power Cooperation and the Western Electricity Coordinating Council. As a participant in these regional collaborative organizations, the commission will work with other Western state commissions to review the final report of the Joint U.S.-Canada Task Force and its recommendations for ensuring that a blackout of that magnitude does not occur again.

On a smaller scale, Nevada's two investor-owned electric utilities are required to file triennial integrated resource plans with the Nevada commission. One component of the resource plan is a review of the adequacy of the transmission system of the utility. The resource plan of the utility must plan for the rapid growth in Nevada, plus a 12 percent planning reserve margin for each year of the plan.

On a more frequent basis, the Nevada electric utilities are required to file monthly reliability reports with the staff of the commission. The commission has also asked the utilities to make public reports whenever there is a reliability concern.

F: What are you doing to encourage infrastructure investment?

DLS: The Nevada commission in its review of the resource plans of the Nevada utilities has approved major transmission projects, including the Centennial Project in southern Nevada and the Falcon-Gonder Project in northern Nevada. The commission is currently reviewing Nevada Power's 2003 resource plan that requests approval to build two new natural gas-fired power plants and money to study the feasibility of a coal-fired power plant.

In addition to ensuring that Nevada's electric utilities invest in infrastructure, the Nevada commission has expedited the permitting of non-utility infrastructure. The 2001 Nevada legislature passed Senate Bill 362 that encouraged power plant development in Nevada by allowing the applicant to file simultaneous applications with the various permitting agencies rather than serial applications. In approving the permitting of transmission lines to serve the new power plants, the staff of the commission has completed its review of the applications within record time, usually less than three months.

F: What is the future of electric and gas competition in Nevada?

DLS: In April 2001, the Nevada legislature repealed the 1997 electric restructuring statutes. Later in the 2001 session, the legislature passed Assembly Bill 661 that permits large customers, those with an average annual load of 1 MW or larger, to purchase electricity from a