Sierra Pacific Power Company responds to the appeals to the PUC.

Readers of the Prospect will recall that the Sierra County Board of Supervisors and the City of Loyalton signed on to a protest to the California Public Utilities Commission on the sale of local service to Cal Peco by Sierra Pacific Power Company/NV Energy.

In a response to an appeal to the California Public Utilities Commission, Sierra Pacific Power Company issued a document which denies either the authority of the PUC to act, or the necessity of the commission acting.

Specifically referring to the Plumas Sierra Rural Electrical Cooperative claims, the report calls the PSREC portion of interest "miniscule": PSREC argues that the Commission should not authorize the Transaction because Sierra (Pacific Power Co.) declined PSREC's request to purchase a miniscule portion of the California service territory.

That portion represents Loyalton and Portola, which is miniscule when viewed from corporate headquarters, but most of the useful world if you live there.

The response goes on to say: As a result of their decision to attempt to "cherry pick" parts of the California Utility (contrary to Sierra's bidding instructions), PSREC and Tahoe Donner Public Utility District failed to make a bona fide bid warranting serious consideration.

The Prospect looked up the term "cherry pick" and it doesn’t apply to the Loyalton-Portola area, although it might apply to the Tahoe section which PSREC didn’t ask to purchase.

SPPC addressed each complaint of service area, service quality, and maintenance. Quoting from the response:

Sierra considered PSREC's request. In fact, its investment bankers had subsequent discussions with TDPUD and PSREC in an effort to obtain more information from them. Only after these communications and Sierra's further evaluation of their supposed bid did Sierra conclude that attempting to sell the California service territory in piecemeal fashion was neither feasible nor in the best interests of California ratepayers. This decision was made, in part, because:

• the California service territory is already relatively small (46,000 customers), and

selling part of the California Utility to one entity could have undermined the

interest of other potential buyers;

• slicing off limited portions of the service territory would leave a smaller number

of customers over which to spread costs of operating the remaining California Utility, which could result in increased rates to the remaining customers;

• as noted below, PSREC's residential rates are materially higher than the rates paid

by California Utility customers; and

• a piecemeal sale would have significantly complicated and inevitably prolonged

the sale process by, for example, requiring the negotiation of multiple separate

transactions and the preparation, filing, and prosecution of several additional

approval proceedings.

In addition, PSREC claims that it has alternatives that "will alleviate the adverse impacts

associated with the proposed transaction." See PSREC Protest at 14. First, this claim wrongly assumes the Transaction will result in a deterioration of service quality. The Transaction will not affect service quality, and PSREC fails to cite a single adverse impact of the Transaction.

Second, and perhaps more importantly, the Loyalton Generator and Fort Sage transmission issues raised by PSREC do not relate to the Transaction. Nevertheless, PSREC wants the Commission to require Sierra or CalPeco to transfer to PSREC the Portola and Loyalton sections of the California Utility, and do so without showing how an illegal, forced sale would possibly benefit Sierra's California ratepayers.

Given that PSREC's residential electric rates are 30% higher than Sierra's rates, it is difficult to believe that forcing customers to switch to a utility whose rates are significantly higher meets any definition of public interest.

In light of these facts, PSREC's false and misleading claim that Sierra's bid criteria were

discriminatory, arbitrary and capricious and not in the best interests of ratepayers is

disingenuous. PSREC's claims should be given no credence by the Commission, and in no event do they raise even a prima facie claim that merits evidentiary hearings.

The report goes on to discount Loyalton’s concerns and reassure everyone that the lines are in great shape.

We now await the response from the California PUC. They have the choice to accept SPPC’s assertions and refuse to hear the coalition’s appeal, or they could take information on the subject. Readers in Portola and Loyalton should find letters regarding PSREC’s taking over service for those areas.

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