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October 6, 2022

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Bill in Legislature would cut loopholes out of Nevada’s renewable energy standards

U.S. Sen. Harry Reid might get his way with Nevada’s renewable energy industry.

In February, he called for the state Legislature to strip “loopholes” out of Nevada’s Renewable Portfolio Standard, which mandates that 25 percent of Nevada’s energy will come from renewable sources by 2025.

Legislators are now pushing a bill that would remove the “loopholes,” which are provisions allowing energy companies such as NV Energy to meet the standard through measures other than actual renewable energy production.

Senate Bill 252 passed the state Senate this year, and the Assembly plans to hold a hearing on the measure at 1 p.m. today.

To the bill’s supporters, it would mean more renewable energy generation in Nevada, more jobs in Nevada and more of the precious economic diversification elected officials love to talk about in speeches.

Great. Get that bill to the governor’s desk right away, they say.

But, hey, wait just a second, say the bill’s opponents. Renewable energy is a relatively more expensive energy source, and making the utility build or buy more of it will raise rates, said Dan Jacobsen with Nevada’s Bureau of Consumer Affairs.

To further confuse matters, dueling studies were released last month.

The bill’s cheerleaders released a study saying changes in the Renewable Portfolio Standard would create jobs and help the state’s economy. The same month, the bill’s detractors released a study saying the renewable energy standard kills jobs and hurts the state’s economy.

The proposal would create construction jobs but also could force job losses due to higher energy costs. So both studies are right, in a sense.

“What we really tried to do was talk about the good, the bad and the ugly,” said Lydia Ball, executive director of the Clean Energy Project, which commissioned the study showing job creation and economic benefit. “What we found was that there is still an overall benefit to this state.”

The criticism of the plan comes from the Nevada Policy Research Institute, a free-market think tank. The timing of the release of the group’s study coincides with a broader national push among conservative groups to roll back or repeal renewable energy mandates similar to Nevada’s Renewable Portfolio Standard.

But in Nevada, elected officials of both parties support measures to enhance the state’s renewable energy industry.

Republican Gov. Brian Sandoval has said he has a goal of making Nevada an “epicenter of renewable energy,” and Senate Bill 252 passed the Senate on a unanimous vote.

“Closing these loopholes will strengthen the law and send a powerful signal that Nevada remains committed to kicking our dependence on out-of-state fossil fuels,” Reid told legislators in a speech in February.

He said the utility should not get credit for buying hydroelectric power from Utah or “allow them to meet the portfolio standard by handing out energy-efficient light bulbs at Home Depot.”

The utility also has banked credits over the years by sometimes exceeding the portfolio standard. The bill would force the company to use those credits.

The bill would make NV Energy spend the credits it has carried over by exceeding the standard during past years. It would also do away with a multiplier effect that allows for the generating capacity of solar panels to count for 2.4 times the actual generating capacity.

NV Energy would also no longer be able to count toward the mandate any renewable energy it uses onsite to run its power plants.

Finally, the bill would ratchet down over time the amount of energy efficiency measures that NV Energy can use to meet the renewable energy law.

All changes to the Renewable Portfolio Standard are aimed at spurring renewable energy construction.

“The people who want to build renewables believe that if you take energy efficiency out of the RPS, it would pave the way to build more renewables,” Jacobsen said.

The utility is not opposed to the changes. NV Energy spokesman Rob Stillwell said the utility supports the bill.

Others, however, are concerned about eliminating the energy efficiency mandates that the Legislature added in 2005.

If they’re removed, Nevada would lose the cheapest, most effective means to keep power bills lower for customers, said Howard Geller, executive director of the Southwest Energy Efficiency Project, a nonprofit organization promoting more efficient energy use.

“We don’t have a problem boosting investment in renewable technologies; we just urge that Nevada set up energy efficiency standards alongside renewable energy standards," he said.

Geller said the utility needs an incentive or mandate to promote energy efficiency because it would otherwise be a financial disincentive for a utility that makes money when customers buy more power.

Nevada is one of 24 states that have an energy efficiency mandate.

“The bottom line is the check we cut every month to our utility,” Geller said. “It’s a product of rates times your consumption, and if you eliminate these efficiency programs, you’re not helping your customers reduce their consumption.”

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