Critics: NV Energy policies undercut renewable power
September 29, 2012
Critics say Nevada’s largest utility is undercutting the spirit of legislation designed to spur renewable energy development by purchasing power from out-of-state sources.State law requires NV Energy to produce a certain percent of its electricity from renewable energy. But the Las Vegas Sun on Friday said the company has used wind power from Wyoming, geothermal from Utah and hydropower from Idaho dams to help it meet the state’s requirement.Environmentalists and renewable energy advocates argue NV Energy’s purchases, estimated to be as much as $100 million since 2009, have created a surplus of renewable credits and stymied Nevada’s own green energy efforts.“These out-of-state purchases are a waste of money as far as carrying out the intent of the statute,” Philip Williamson, senior policy adviser of Western Resource Advocates, said in testimony before the Public Utilities Commission of Nevada this summer. “They do not reflect investment of a single dollar in Nevada. They have no long-term effect with respect to increasing Nevada’s use of renewable energy and decreasing our dependence on fossil-fueled resources.”The PUC, which regulates NV Energy, has upheld the company’s short-term purchases.Except for 2009, NV Energy has met or exceeded the renewable portfolio standard set by the Legislature. The company said short-term contracts with out-of-state energy providers are the cheapest way to meet its renewable obligation and helps it meet its obligations while Nevada projects are delayed.Higher-cost projects would, inevitably, mean higher power bills for customers.The company also said the out-of-state purchases are only temporary to meet the state-mandated requirement. “We don’t expect any out-of-state purchases after this year,” spokeswoman Jennifer Schurict said.In 1997, the Legislature first passed a “renewable portfolio standard,” which mandated that a share of the energy delivered to Nevadans come from renewable energy sources. In 2005, lawmakers amped up the requirement — 15 percent of energy in 2011 was supposed to come from renewables, increasing to 25 percent in 2025.The system is based on credits, which the utility can earn directly through its own renewable generation, by purchasing power from in-state or out-of-state producers, or through energy-efficiency savings. The company receives credits for each kilowatt hour of generation.In 2011, NV Energy reported in securities and exchange filings that 19 percent of its power would come from renewables, well over the 15 percent requirement set by the Legislature. By 2015, it projects it will have 32 percent of its energy from renewables, well over the 20 percent requirement.But environmentalists and energy advocates said that portrayal is skewed and could damage the potential for future clean-energy projects in Nevada. If the power company can meet its portfolio requirement through cheap renewable energy credits, there’s little market for Nevada-based renewable energy producers or incentive to build in-state projects, they argue.Kyle Davis, policy director for the Nevada Conservation League, said environmental groups would work to change the law during the 2013 legislative session.“The goal of the renewable portfolio standard was to develop a robust renewable energy market in the state,” Davis said. “Using short-term energy contracts is subverting the legislative intent of the original policy.”Consumer advocates have warned that the push for more renewable energy could result in higher power bills.“This stuff is more costly than traditional energy,” said Dan Jacobsen, a manager with the Bureau of Consumer Protection. Particularly with the price of natural gas at record lows, traditional fossil fuel burning power plants are cheapest.“People need to understand that any effort to expand renewables will create upward pressure on pricing, because renewables cost more,” he said.