An alleged benefit of the proposed takeover of Nevada Power Company by the Southern Nevada Water Authority is that everything the Water Authority does is open to public scrutiny.
“When you have an investor-owned utility, there is need for corporate secrecy,” said SNWA General Director Patricia Mulroy last July, in announcing the takeover bid. “A government-owned utility is transparent. There is no secrecy.”
It’s hard to know whether Mulroy was intentionally playing loose with the truth when she made that statement, or whether she instead suffered a convenient memory lapse.
Mulroy had already been at the helm of the Las Vegas Valley Water District for five years when, in December 1994, a local government utility pulled off a successful cover-up regarding an event that, during a nine-day period, posed a potentially serious threat to the health of nearly every resident of Clark County.
This incident—kept secret from the public for more than two years—involved a massive spill of contaminated wastewater into Lake Mead, upstream of where Las Vegas obtains its drinking water. It therefore fell under the domain of one of Mulroy’s key responsibilities: the safety of our drinking water.
According to the Las Vegas Review-Journal, “New equipment upgrades were just going on line at the Las Vegas sewage treatment plant during that month. Operators explain that, as beneficial microorganism populations were being regrown, a rare condition known as “nitrite lock” developed. At that point, one of the bacteria—instead of converting ammonia to nitrate as intended—began consuming the chlorine used to disinfect the city’s sewage.
“The result was that fecal bacteria counts in the discharge rose high above the usual levels of 2 per 100 ml, peaking at nearly 25,000 on Dec. 22, 1994.”
Over a period of nine days this treatment facility—owned and operated by the City of Las Vegas—discharged 398 million gallons of tainted wastewater into the Las Vegas Wash, which empties into Lake Mead. During this entire period of time, the public was none the wiser.
According to the treatment plant’s laboratory supervisor, the incident was not even reported to state environmental officials until weeks after the spill had occurred. News of the spill didn’t reach the media and the public until May, 1997—two and a half years after the contamination had occurred!
If Pat Mulroy was aware of this ongoing toxic spill, she likewise failed to alert the public. If she was not aware of it, the incident calls into question how effectively the Water District was monitoring pollution levels in water intended for human consumption.
Imagine if a private water treatment company had spilled toxic wastewater into Lake Mead, and then had put public safety at risk by attempting to cover up their mistake. Such an irresponsible act would have triggered a huge public outcry about “corporate greed” and “putting our children at risk.” Local politicians and bureaucrats would have had a field day denouncing the private sector and urging that wastewater treatment be turned over to a government utility. Lawyers would have rushed to file massive class-action lawsuits, and company officials would likely have faced criminal charges and possibly even gone to jail.
Instead, the city-owned wastewater facility got off without so much as a fine, or even a reprimand.
This appalling double standard is one reason why it is riskier to trust government bureaucrats to “do the right thing” than to trust private individuals and companies. While dishonesty can occur in both the private and public sectors, it is much easier to hold private companies accountable for their actions. A notorious example is the fallout from the recent California energy crisis. While Enron and other private companies that participated in the California power market are facing numerous complaints, investigations and lawsuits, the politicians and bureaucrats who created the framework and rules for California’s dysfunctional energy market have, for the most part, suffered minimal consequences as a result of their actions.
And, as demonstrated by the secretiveness surrounding the discharge of toxic wastewater by the city-owned sewage treatment plant, bureaucrats in charge of public utilities are both able and willing to cover up a public health hazard, with minimal risk to their careers or public image.
Contrary to her assertions about the transparency of government utilities, the only thing that’s “transparent” about Pat Mulroy’s proposed takeover of Nevada Power Company is her unbounded eagerness to continually expand the size of her bureaucratic empire.
Guy Hansen, a Las Vegas businessman, is a policy fellow of the Nevada Policy Research Institute