Bill raising renewable portfolio standard to 50 percent gets much warmer reception two years later
So far, renewable energy advocates are seeing much smoother sailing on legislation to double Nevada’s renewable production standard by 2030, just two years after a similar measure met stiff resistance from the powerful casino industry and was vetoed by former Gov. Brian Sandoval.
Supportive testimony dominated most of the hearing Tuesday on SB358, a bill by Democratic Sen. Chris Brooks that would increase the state’s Renewable Portfolio Standard from the current 25 percent by 2025 mark to 50 percent by 2030. Even the handful of opponents to the bill insisted that they supported an increase to the standard and only quibbled with a portion of the methodology behind the RPS.
Brooks, who sponsored the vetoed 2017 bill, said the legislation would increase the state’s RPS for the first time since 2009, and in terms of renewable standards, would push Nevada from the middle of the pack into the top percentage of states requiring high amounts of renewable energy.
“Let us be clear, it would not be hard for Nevada to accomplish this goal,” he said. “We receive a lot more sunshine than most other parts of the country. We have plenty of opportunities for geothermal power in our state, and we already have an existing hydropower infrastructure. Why wouldn’t we use our naturally endowed resources to create a better future for our children?”
During the hearing, Brooks also presented an amendment that changes some of the methodologies and categorizations that determine the formula for the state’s Renewable Portfolio Standard, but kept the main portions of the bill in place — including increasing the requirement to 50 percent and requiring other electric providers for businesses that have left NV Energy.
Public awareness of the state’s RPS has grown since a similar bill raising the standard to 40 percent by 2030 was vetoed by former Gov. Brian Sandoval in 2017, and the subsequent launch of a ballot question in 2018 designed to put a 50 percent renewable standard in the state constitution. More than 60 percent of voters cast a ballot supporting Question 6 in the 2018 election, but the measure has to be approved again in 2020 to become part of the Constitution.
Brooks has previously said that he introduced the bill because he did not want to wait another year and through another election cycle to institute a raise in the RPS. But the wide range of supportive testimony on Tuesday marked a departure from how the bill was received in 2017, when the Nevada Resort Association and large casino companies including the Las Vegas Sands and Wynn Resorts publicly opposed the bill, and NV Energy suggested that it wouldn’t be able to comply with the measure without multiple tweaks.
On Tuesday, an NV Energy lobbyist was the first person to testify in support of the bill, Republican Senate Leader James Settelmeyer said he was looking to support the bill, and Las Vegas Sands lobbyist Marcus Conklin said the company was happy to support the measure, even if it wasn’t amended to reflect the desire of the resort lobby.
“It’s not necessary for us,” he said. “We like it as is, as well.”
Like a “cap and trade” program for carbon emissions, a Renewable Portfolio Standard system essentially sets up an artificial marketplace where power plants gain “PECs” (Portfolio Energy Credits) for producing renewable energy. The state runs a marketplace where PECs can be bought and sold, and requires NV Energy and other applicable entities to meet a certain percentage standard by turning in enough credits as compared to their total electricity generation.
Utilities are also allowed to roll over and use excess PECs in future years. A PEC itself is equivalent to one kilowatt-hour of generated electricity, equivalent to a 100-watt television running for 10 hours.
In theory, a higher RPS should drive a utility to generate more renewable energy, but RPS percentages typically are higher than actual renewable generation. NV Energy in 2017 reported a 24 percent clean portfolio, but the company’s actual fuel mix was closer to 18 percent renewable and 76 percent natural gas.
The bill would raise the RPS to 22 percent by 2020, and gradually increase the standard over the next decade:
- 24 percent by 2021
- 29 percent by 2022 through 2023
- 34 percent by 2024 through 2026
- 42 percent by 2027 through 2029
- 50 percent by 2030
It would also apply the standard to not just NV Energy, but also to electric cooperatives and other public power districts as well as to businesses that have filed to leave NV Energy and purchase power from other providers.
In a move that will have potentially major implications for NV Energy, the amended version of the bill allows the utility to exempt from the compliance formula any electricity sales made by the utility as part of an optional pricing program where the utility either transfers or cashes in renewable portfolio credits for a certain customer. It’ll apply to the utility’s existing and planned special pricing rate program offered to some of its largest customers flirting with leaving the utility.
Brooks said that inclusion was meant to deal with cases where the utility procured renewable energy credits — thereby actually generating renewable power — but sold the credits to a customer, leaving them with an artificially high amount of generated power and a higher burden to meet the RPS that didn’t reflect their renewable generation.
NV Energy confirmed last year that it supports raising the RPS to 50 percent by 2030, and company CEO Doug Cannon reaffirmed that commitment to lawmakers in February.
The amendment to the bill still retains the requirement mandating entities that have filed to leave NV Energy’s electric service and purchase power from an outside provider meet the higher RPS; current law only requires them to meet the standard set at the time they left the utility. But the amendment allows businesses that departed the utility prior to 2019 to use the same amount of energy efficiency credits offered to the utility for up to 25 percent of the standard they are required to meet, through 2024.
Brooks said that decision was made so as to not treat companies that recently filed to leave the utility the same as mining companies that left utility service more than a decade ago. He said that while energy efficiency has value, in general the phase out was part of a move to ensure that only renewable energy was part of the renewable portfolio standard.
“Energy efficiency is not renewable energy,” he said. “We have a renewable energy portfolio standard, where we are defining how much renewable energy we create in the state of Nevada and we consume in the state of Nevada, and energy efficiency clearly is not that.”
The change drew the only serious opposition to the bill. Lucas Foletta, a lobbyist for the Nevada Resort Association, said that not including companies that have recently filed applications to leave the utility but have not yet done so is unfair and could hem their ability to procure sufficient renewable energy. He also defended use of energy efficiency credits as a worthwhile portion of the RPS formula.
“They do reduce the carbon footprint in the system, which is consistent with the objective of the bill,” Foletta said. “And so they have value in that sense from a policy perspective.”
The amendment also deletes a requirement that compliance with the standard be measured by a rolling three-year average, meaning RPS compliance will be measured year-to-year. But it also prohibits the Public Utilities Commission from imposing administrative fines for noncompliance with the standard unless the offending utility or entity fails to meet the standard for three consecutive years until 2029. After 2030, the bill removes that three year requirement and instead allows the commission to administer fines for non-compliance on a yearly basis.
The amended version of the bill retains the ability of utilities to remain exempt from the renewable standard if the PUC determines sufficient renewable energy required to meet the standard isn’t available (after the utility makes “reasonable efforts” to secure required contracts). It also allows an exemption from the standard if there is a delay in the construction of a renewable power plant or if an existing renewable plant underperforms — a section added by the amendment.
Also added in the amendment is a clarification that inclusion of electricity from water power (currently not included in the current RPS formula) must include systems in existence prior to 2019 and prohibits counting any new power plants that require an appropriation of additional water.
But little of the testimony related to the technical makeup of the RPS, and instead focused on the value of renewable energy to both the environment and the state’s economy. Olympic skier and Reno native David Wise, gold medal in hand, told lawmakers that his own career had suffered amid volatile winters caused by climate change.
“We’re the canaries in the mine; we’re the ones highest up, furthest back, and we’re the ones seeing effects of climate change first hand,” he said.
The measure also has support from Gov. Steve Sisolak, who pledged during his State of the State address to support increasing the portfolio standard to at least 50 percent by 2030. As a show of support, Director of the Governor’s Office of Energy David Bobzien testified in favor of the bill.