U.S. agency questions fund’s investment in utility company

The Public Utilities Commission already is reviewing Horizon Asset’s purchases to determine whether the investment company and an affiliate should have obtained commission approval before acquiring more than 25 percent of the utility.

Now a staff official at the Federal Energy Regulatory Commission is looking into whether the investment company violated federal laws by obtaining large ownership stakes in several giant energy companies without federal approval.

The letter, signed by FERC official Steve Rodgers, was addressed to Andrew Fishman, Horizon Asset’s chief compliance officer.

Fishman declined comment, saying he had not received the letter.

Horizon Asset owns $756 million in shares of Sierra Pacific Resources, the holding company for Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno.

Andrea Smith, a spokeswoman for Sierra Pacific Resources, declined comment.

State consumer advocate Eric Witkoski said he is concerned about the purchases because a little-known company like Horizon Asset controls such a large percentage of Sierra shares.

“It’s even more of a concern when there are entities out there that own lots of energy companies,” Witkoski said. Congress originally passed the Public Utilities Holding Company Act in the 1930s because of complaints that utility holding companies were allocating costs among utilities to drive up rates, Witkoski said.

“I’m not saying that’s what’s going on here,” Witkoski said. “It’s just a concern.”

Former Nevada consumer advocate Tim Hay said it appears that Horizon Asset is holding Sierra Pacific shares in hopes of making short-term gains from potential mergers or other factors.

“Other than that, I don’t see a rationale for them buying such a large position in (Sierra Pacific),” Hay said.

Charles Benjamin, director of the Nevada office of Western Resource Advocates, discovered that Horizon Asset and an affiliated company called Kinetics Asset Management held a 27 percent of Sierra shares on Sept. 30.

“We’re pleased that FERC is taking this action, because all we’ve asked for is transparency with regards to Horizon’s ownership of shares in Sierra Pacific,” Benjamin said.

Earlier this month, Hay calculated that Horizon and Kinetics owned 29 percent of Sierra Pacific Resources shares. Hay said Horizon and Kinetics are affiliated because they have the same senior staff, same compliance officer and same office in New York.

The letter says Horizon Asset owns more than $1 billion worth of shares, which is more than 10 percent of the outstanding shares of Reliant Energy of Houston. Reliant spokeswoman Pat Hammond said she couldn’t comment immediately on the FERC letter but believed company officials were studying it.

The letter also notes that Horizon has reported $127 million in stock holdings in CenterPoint Energy, a company that bought the power lines and poles of former utility Houston Lighting.

Horizon owns $870 million in stock in Allegheny Energy of Greensburg, Pa.; $109 million of NRG Energy of Princeton, N.J.; $76 million of CMS Energy Corp. of Jackson, Mich.; and $50 million of Mirant Corp. of Atlanta.