Also, Nevada Power's parent, Sierra Pacific Resources, said it is delaying the Centennial transmission line project in Southern Nevada and Falcon-Gonder transmission project in Northern Nevada to save $125 million in capital expenses. The parent company said it is examining other possible cost-cutting steps it can take.

Paul Heagan, vice president of Nevada Power, said the company has considered whether it can continue to hook up new customers but has not made a decision yet.

So far, the utility has not laid off full-time workers but is discussing reductions in the number of contract workers and interns, Heagan said.

"Our focus is the health and safety of our existing customers and providing supply to the existing customers," said Paul Heagan, vice president of Nevada Power.

Tim Hay, state consumer advocate, saw it differently. He suggested the utility company was "attempting to punish those that have a presented a good case in front of the (state regulators) that (state regulators) accepted."

In a statement, Walter Higgins, Sierra Pacific Resources' chairman and chief executive officer, objected to the Public Utilities Commission's decision last week to slash its energy rate increase to $485 million.

"We believe the PUCN has erred in excluding evidence that the company's power purchase costs were prudently incurred," Higgins said, although the utility company did not indicate what testimony it believed should have been accepted as evidence.

PUC Chairman Don Soderberg, however, struck testimony that Nevada Power filed on how an adverse decision would affect the company's financial viability because the law only allows the regulatory body to consider the prudence of power purchases. He also refused to admit written testimony that Nevada Power submitted in rebuttal.

"We do not believe this decision fulfills the intent of the law passed last year that was designed to provide assurances to our company as we took risks to protect our consumers from the meltdown of Western power markets," Higgins said.

The Centennial project would provide several planned power projects, which are primarily clustered at the Apex Industrial Park north of Las Vegas, with transmission capacity to ship their electricity to buyers in Nevada and other Western states.

Sierra Pacific Power, another subsidiary of Sierra Pacific Resources, is delaying the 180-mile, 345-kilovolt Falcon-Gonder transmission line that would run from the Falcon substation near Carlin to a location north of Ely.

Hay said independent power plant developments need the $300 million Centennial project in order to ship their electricity to the market.

"We consider that an attempt to hold the Southern Nevada economy hostage," Hay said about the decision to delay the Centennial project.

Heagan agreed with Hay that the transmission line project is critical.

"It is absolutely essential (for the plants to have access through the Centennial transmission lines)," Heagan said. "They have to have a way to get their power to market, and there is no way to do it without Centennial."

But he added: "Our first obligation has got to be the customers we have today."

Another knowledgeable source, however, said Nevada Power probably has adequate transmission capacity for the number of power plants now under development. Many of the generation plants that were planned have been delayed.

"This is pretty much the only thing they can do is appeal and cut expenses (or file for bankruptcy)," the source said, speaking on the condition of anonymity.

In any case, the company's utility subsidiaries, Nevada Power and Sierra Pacific Power Co., must obtain PUC approval to change their resource plan before delaying the projects, according to the commission.

"There is probably a federal issue there as well," Hay said, pointing to Nevada Power's obligation under federal rules to build needed transmission lines. Duke Energy Corp. is building a 600-megawatt gas-fired plant and Mirant Corp. is constructing a 550-megawatt plant at Apex, according to the PUC. In addition, Reliant Energy is building a 575-megawatt plant south of Las Vegas near Primm.

Heagan didn't say whether the cost-cutting steps announced Wednesday would let Nevada Power avoid bankruptcy.

Hay questioned the credibility of Nevada Power executives who said a $50 million to $90 million reduction would put them in bankruptcy or on the brink of it, because the commission denied much more -- $437 million of the $922 million.

Hay said Nevada Power should file for bankruptcy instead of trying to pressure the PUC. He questioned why the company didn't cut its common stock dividend and save $80 million in annual expenses.

Shares of Sierra Pacific recovered Wednesday from two days of plummeting, closing up 84 cents, or 10 percent, at $8.90. The utility's stock fell a total of 41 percent on Monday and Tuesday.