Nevada Pulls the Plug on Deregulation

April 24, 2001

Rarely do lawmakers agree so completely on such a complex and controversial subject.

But the subject is deregulation and the state is Nevada, which shares a border with California, the country's best example of the law of unintended consequences.

On April 18, Nevada's Legislature voted unanimously to freeze electricity rates for a year, halt the pending sale of generating plants and completely scrap plans to deregulate the electricity industry.

The emergency action was taken to avert the type of disaster that has befallen California utilities and customers. 

"This was a bold move by the legislature and the governor to focus on the real problem that threatened every consumer and business in Nevada," said Walt Higgins, chairman of Sierra Pacific Resources Group, parent company to Nevada's two major utility companies.

Under the legislation, the utility companies will maintain ownership of the generation plants and Nevada's Public Utilities Commission will again regulate the state's electric utilities.

The nightmare in California includes higher electricity prices and the likelihood of rolling blackouts in the summer months. The California experience has prompted states across the country to slow down utility restructuring-with Nevada the first to completely abandon deregulation plans.

Will Deregulation Short-Circuit North America's Electric Power Supply? (on-line magazine) Click below

Deregulation of the electric power industry may impact consumers, utility workers, businesses and investors

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