Gibbons funding plan would boost renewable energy projects

By David McGrath Schwartz

Published Wednesday, Feb. 4, 2009 | 9:48 a.m.

Updated Wednesday, Feb. 4, 2009 | 4:22 p.m.

Gov. Jim Gibbons is forming a nonprofit corporation to sell billions of dollars worth of bonds in order to build power transmission lines throughout Nevada to bolster the development of renewable energy projects.

The plan, which still requires federal legislation, is the first directed at constructing a grid that would connect solar fields, geothermal plants and wind farms to existing power centers.

"This is how to finance transmission lines without taxpayer money and with the lowest cost to end users," said Deputy Chief of Staff Mendy Elliott.

Gibbons sent a letter to President Barack Obama, Sen. Harry Reid and Speaker Nancy Pelosi on Wednesday requesting changes to the tax code.

A governor's task force last year identified where renewable energy projects could be built and where transmission lines would go. But with the state in a serious financial crisis and credit markets dried up there has been little hope of private financing of transmission lines, which the Gibbons' administration sees as key to facilitating renewable energy projects.

Elliott, who had been working on the plan with energy advisor Hatice Gecol for the past 18 months, said Monte Miller would chair the nonprofit, called Nevada Energy Assistance Corp. Miller is a major donor to Gibbons' campaigns and legal defense fund.

The governor would have five appointments to the nonprofit's board; the Legislative Commission would have two; Nevada Association of Counties would have one; and the Nevada League of Cities would have one.

The nonprofit would sell bonds, which would be tax free, after getting contracts with renewable energy producers.

Elliott said the creation of the nonprofit by the governor is allowed under existing state law. The changes to the federal tax code is required so the nonprofit could sell bonds outside of the state's constitutional debt cap.

Assemblywoman Sheila Leslie, D-Reno, said Gibbons' concept deserves a hearing, but she favors a method that would give the state more control over the board.

Leslie plans to introduce a bill in the next few weeks that would create a Nevada Transmission Authority, staffed by state employees. Gibbons' plan, Leslie said, would give up too much control to commission members.

"If the state is going to use its bonding leverage, why cede so much authority to a nonprofit?" she said. "Rather than rushing to set this up, it would be better public policy to have this debate in the Legislature."

She said Legislative staff is verifying whether Gibbons' has the authority to create the nonprofit without legislative approval.

Elliot, the governor's deputy chief of staff, said that the executive branch of the government has the authority to issue debt. It's how the state's First Time Homebuyer program is financed, for example.

Leslie said she has spent months reaching out to stake holders and studying other states' transmission authorities. She said she wants to move forward as a "bipartisan concept."

Leslie said the Nevada Transmission Authority would "plan, finance, construct, develop, acquire, own and dispose of transmission facilities and to contract for maintenance and operation of transmission facilities."