By Mark Waite
NV Energy filed a complaint with the Public Utilities Commission alleging Valley Electric Association violated state law operating as a public utility within their service area without a Certificate of Public Convenience and Necessity.
The complaint filed Jan. 18 states NV Energy subsidiary Nevada Power provides retail electric service to the U.S. Department of Defense at Creech Air Force Base in Indian Springs as well as two separate facilities owned by the DOD just off Highway 95.
On Sept. 28, 2012, the U.S. Department of Defense awarded a contract to VEA to own, maintain and operate the electric distribution system at Creech AFB, a deal worth $23.6 million.
The complaint states Creech AFB is located within Nevada Power’s service territory and outside the VEA service territory.
The complaint states: “VEA has no distribution facilities within Nevada Power’s service territory, or in any proximity to Creech AFB, to provide retail service to the DOD at Creech AFB. Thus Nevada Power will continue to deliver energy to the existing points of delivery, but VEA in turn will resell or distribute and deliver the energy to the end-use customer DOD.”
Valley Electric made no formal request to the Public Utilities Commission for approval to provide resale or distribution service to Creech AFB, that would operate and provide duplicate service in Nevada Power’s service territory, according to the complaint.
“VEA is a cooperative association and a limited regulated public electric utility that provides electric service to its members in a designated service territory prescribed in its commission approved CPCN Certificate of Public Convenience and Necessity ,” the complaint states.
Nevada Revised Statutes prohibit any person from owning, controlling, operating or maintaining a public utility in Nevada without first obtaining such a certificate from the commission, NV Energy states.
“In violation of NRS 704.330, VEA would own, operate and maintain a public utility system in an area without a commission-approved CPCN to serve such area,” the complaint states.
The law prohibits a public utility from constructing or extending a power line, plant or system if it will interfere with the operations of another public utility, NV Energy states.
“VEA is extending its system into Nevada Power’s service territory by assuming ownership and operational control of the Creech AFB distribution facilities. VEA’s operation of its extended system will interfere with Nevada Power’s already existing operations and system that is currently serving Creech AFB and the surrounding area by preventing Nevada Power from delivering energy to its retail customer,” the complaint states.
The resale by Valley Electric of Nevada Power’s energy or its distribution-only service to Creech AFB will result in a duplication of service within Nevada Power’s service territory, according to the complaint.
NV Energy asks the PUC to issue an order requiring Valley Electric to cease and desist from any operation at Creech AFB; prohibit Valley Electric from extending its system or duplicating Nevada Power’s service at Creech AFB or elsewhere within Nevada Power’s service territory; asks the PUC to direct Valley Electric to subject itself to the full jurisdiction and regulation of the Public Utilities Commission and impose any other penalty and relief.
Valley Electric responded to a directive from the U.S. Department of Defense in 1997 that infrastructure on military bases be privatized, including electric, gas, sewer and water services.
In a prepared statement through a public relations firm, Valley Electric Association Chief Executive Officer Tom Husted said, “We believe this is a retaliatory measure in response to Valley Electric Association being awarded the federal contract for Creech Air Force Base. It should be noted that VEA was successful in winning this contract through an open, fair and competitive process.”
“We are honored to have been awarded the contract to serve Creech Air Force Base. The base provides significant contributions to our national security as well as our regional economy, and we are extremely honored to be entrusted with providing for its electric utility needs,” he said.
The VEA announcement of the Creech AFB contract in November came a month after the announcement VEA had signed a five-year, $61.6 million contract with the Nevada National Security Administration to provide electrical service to the Nevada National Security Site NNSS formerly known as the Nevada Test Site.