by Dana Gentry, Nevada Current
Gov. Joe Lombardo’s failure to fill a vacancy on the Nevada Public Utilities Commission is likely to result Monday in the appointment by the Commission’s two members of an acting commissioner who would be statutorily ineligible to be appointed by Lombardo but will nonetheless likely cast the deciding vote in a contentious rate hike request from NV Energy.
Samuel Crano, a hearing officer for the PUC, is an attorney. State law prohibits the governor from filling a vacancy or appointing an acting commissioner that would result in more than two members of the PUC being ”from the same field of experience.”
Both Chairwoman Hayley Williamson and member Tammy Cordova are attorneys.
State law allows the Commission to appoint a hearing officer to serve as an Acting Commissioner to fill a vacancy when the “Governor has not appointed the requisite number of persons to serve…”
On Monday, the PUC is expected to determine whether NV Energy can charge ratepayers for more than $30 million of costs for its annual natural disaster preparedness plan (NDPP), which is focused in Northern Nevada but paid for largely by Southern Nevada ratepayers, who make up two-thirds of the state’s population.
Ratepayers currently pay between $2 and $2.50 for a month toward the NDPP. NV Energy’s proposal would double that amount.
NV Energy projects it will spend $373 million on disaster preparedness in the next three years – $171 million for capital expenses ($43.5 million in Southern Nevada and $127.6 million in Northern Nevada) and $202 million for operations, maintenance, administrative & general (OMAG) costs – projected at $33.5 million for Southern Nevada and $168.5 million for Northern Nevada.
NV Energy is permitted to earn a profit on capital expenses as well as OMAG costs. The utility stands to earn $9.5 million over three years just on OMAG costs, according to testimony provided to the PUC. Witnesses testified the utility’s proposed budget for the work is inflated.
Williamson and Cordova are on opposite sides of NV Energy’s request. Williamson filed a draft order supporting the bulk of the utility’s request, which would have Southern Nevada ratepayers subsidize hundreds of millions in dollars in disaster preparedness efforts centered in Northern Nevada. Cordova filed a dissent, opposing the subsidies.
Crano will likely be called on to break the tie.
Vacant seat
Former Commissioner C.J. Manthe publicly announced her retirement on Aug.1, however news of her intention to leave circulated for months among insiders.
Former First Lady Dawn Gibbons, a member of the state’s Transportation Authority, told the Current on Aug. 1 that her request to Lombardo to be appointed to the PUC had already been rejected in favor of another candidate. However, Lombardo has named no permanent or acting replacement for Manthe.
The governor has made affordable energy a central theme of his administration, however his spokeswoman did not respond to requests for comment on Lombardo’s failure to fill the vacancy or its potential effect on the integrity of the regulatory process at a time when ratepayers are angry, confused, and struggling to pay utility bills.
The PUC vacancy affords Lombardo an opportunity to geographically diversify the board, which has had a majority of members from Northern Nevada in recent years.
Williamson, the chairwoman of the PUC, also serves as the state’s member-at-large and vice-chair of the Board of the Tahoe Regional Planning Agency, a position she says poses no conflict of interest with her role on the PUC, where she’s charged with voting on disaster preparedness plans that critics say disproportionately benefit Lake Tahoe at the expense of Southern Nevadans.
“The TRPA Board is unique in that it is made up of many state and local officials, who instead of bringing inherent conflict to the TRPA Board bring distinct viewpoints that they represent,” she said via email. “At the PUCN, I have a statutory duty to balance the interests of utility ratepayers and shareholders for PUCN-jurisdictional utilities, which is not in conflict with the TRPA’s Compact or Regional Plan.”
Judicial review
Some insiders suggest Crano’s vote on a contentious matter could give way to appellate action by either NV Energy or an intervening party, such as the gaming industry, which submitted testimony against the NDPP.
The parties have 15 days from the date of the order to file a motion for reconsideration with the PUC, followed by options for judicial review.
“Whether a Commission decision relied upon the vote of a properly-appointed/designated acting commissioner has no bearing on the validity of the decision,” PUC general counsel Garrett Weir said via email. “There is no legal distinction between a commissioner and an acting commissioner with regard to judicial review of Commission orders.”
From a policy perspective, does it make sense that two appointed commissioners can make an appointment the governor would be prohibited from making under the law?
“Presumably, in authorizing the Commission to make this designation, the Legislature believed that a PUCN hearing officer, who regularly presides over utility regulatory proceedings, would have the necessary knowledge, experience, and availability to step into the role of commissioner on short notice,” Weir said, noting the Commission’s failure to act on some applications, such as rate cases within a specified time period, would result in their automatic approval.
