What’s the cheapest kind of energy?

For advocates of SB382, the answer isn’t coal, natural gas, wind, solar or any other fuel source — the cheapest energy is the megawatt that never has to be produced.

That axiom is a favorite of energy efficiency advocates, who say the concept of not only increasing electric supply but also decreasing demand through better insulation, more efficient air conditioners or heating systems, and other projects will help reduce strain on the state’s electric grid and help consumers save money on their power bills.

That was the thrust of the argument made Monday afternoon in the Senate Growth and Infrastructure Committee, where clean energy representatives (Southwest Energy Efficiency Project, or SWEEP, and the Natural Resource Defense Council) presented SB382. The bill has four main components:

• Directs NV Energy and the state’s Public Utilities Commission to establish a program required to produce electric savings equal to at least 1.3 percent of the company’s retail electric sales
• Provides double funding for energy efficiency programs serving low income and historically disadvantaged communities
• Requires a cost-benefit analysis for any energy efficiency programs proposed by NV Energy
• Creates a performance-based earning opportunity for NV Energy as part of the energy savings program

Advocates estimated that full implementation of the bill would cost the utility on the high end somewhere between $65 and $75 million. Ellen Zuckerman, co-director of SWEEP’s Utility Program and co-presenter of the bill, said the advocacy group had commissioned a study showing the net economic benefits of the legislation would equal about $1.73 billion over the next decade.

Bill proponents noted that lawmakers had in 2017 and 2015 passed legislation requiring the state’s PUC to establish similar energy efficiency programs, but said this legislation was aimed to more dramatically ramp up energy efficiency programs. 

“The law that we passed in 2015 unfortunately buried the lede on the need to prioritize cost effective energy efficiency, so there wasn't really a lot of policy guidance for the commission when setting goals,” NRDC senior scientist and bill presenter Dylan Sullivan said.

But NV Energy testified in opposition to the measure, saying the electric utility “wholeheartedly support(s) energy efficiency” but had concerns about the bill’s potential financial impacts on customers and options already in place to encourage additional investment in energy efficiency plans — such as the alternative ratemaking structure adopted by lawmakers in 2019. 

NV Energy representatives also said that creation of a new energy efficiency framework would further burden the “already constrained resources at the Public Utilities Commission.”

“I do want to note we understand the frustration,” NV Energy lobbyist Marie Steele said during the hearing. “Regular regulatory processes take time, and the Legislature only meets every two years. But we are asking you to utilize the tools the state already has regarding energy efficiency targets and alternative ratemaking.” 

Ernest Figueroa, head of the state’s Bureau of Consumer Protection, also testified against the bill because of a section authorizing the PUC to adopt a performance-based incentive for the utility to administer an energy efficiency plan.

“(It) also essentially appropriates hard earned ratepayer money to incentivize the utilities to do what it already has a duty to do, which is to follow the law,” he said.

Sullivan said that even considering that lawmakers had passed previous legislation requiring energy efficient targets and that opportunities for expanded energy efficiency plans could be expanded in upcoming PUC dockets, lawmakers should nonetheless pass the bill to ensure that “fundamental aspects” of the state’s overall energy efficiency policy does indeed change.

“I think there are some things that we could change through an investigatory docket and working through the commission process,” he said. “But there are also some other fundamental aspects of the utility business model that need to change if we're going to reach higher levels of savings.”

Editor’s Note: This story first appeared in Behind the Bar, The Nevada Independent’s newsletter dedicated to comprehensive coverage of the 2021 Legislature. Sign up for the newsletter here.