NV Energy is asking state regulators to approve a novel new regulatory procedure that could help the utility take a larger ownership stake in a proposed massive increase in renewable power generation.

Representatives from NV Energy asked the Public Utilities Commission during a hearing on Tuesday to issue a declaratory order that would essentially make it easier for the utility to build and own large scale renewable energy production plants, through a change in how rates are calculated.

“The energy field is changing, and we need to find ways to change as well, and to evolve,” NV Energy attorney Michael Green said at the hearing. “I think that’s what you’re seeing, a way for the company to bring new renewable projects to the state.”

In a filing submitted in December, the utility asked the PUC to issue an advisory order that would “facilitate the development of a more balanced portfolio of renewable energy projects” by essentially allowing the company to participate in competitive bidding process for new power purchase agreements — specifically a planned large-scale solar photovoltaic plant owned and operated by NV Energy as part of the company’s plan to add on 330 megawatts of new renewable projects by 2023.

Last week, the company announced it had received more than 100 bids since early January as part of the company’s planned renewable energy project expansion, which includes proposals for solar, wind, geothermal, biomass and battery storage projects.

The request asks the commission — composed of three members appointed by Gov. Brian Sandoval — to grant permission for the utility to essentially work around formulaic rates that the commission sets based on the company’s revenue requirement in favor of a “clearing price” established in a competitive solicitation process, which the company said was much more cost-effective.

In real terms, the requested order would allow a NV Energy team to develop a proposal for a utility-owned large-scale solar generating facility, which would be filed under seal with the PUC and open it concurrently with outside bids during the utility’s Integrated Resource Plan (IRP) process later this year.

State law requires the utility to file an IRP every three years -- a plan that details the company’s plan to manage electricity supply and demand. The PUC is given statutory authority to review the plan and modify any portions that don’t meet standards set out in law, including adequate reliability, within financial constraints, meets the state’s Renewable Portfolio Standards and any other standards for environmental protection.

Typically, the utility would detail any power purchase agreements — long-term agreements to purchase electricity from an independent provider — it proposes to enter during the IRP process.

But under the requested change, NV Energy could essentially act as both sides in the power purchase agreement, as long as the company could beat out other independent businesses during the RFP process with its own “bid” on the solicited projects. The utility said that Internal Revenue Service rules on utility property, as well as the process which it determines electric supply and demand, had stifled its ability to invest in new, company-owned renewable generation, and that sending requests out to bid had resulted in some of the lowest priced solar projects in the country.

The PUC would still have authority to approve any final contract, and the proposal would be subject to a hearing and other public input typically required under Nevada law on the electric market.

As part of the proposal, the utility said it would ask the commission to exclude the investment, depreciation expenses and any project debt on new generation facilities from future general ratemaking cases. NV Energy attorneys also said that they would be open to improving the process over time, given that no other investor-owned utilities appear to have requested any similar arrangement.

“I’ll be very candid, this is painting a train that is moving,” NV Energy executive Shawn Elicegui said during the hearing. “We always recognize that as a company that’s focused on continuous improvement, we’re dedicated to continuing to improve the process.”

Smart Energy Alliance, a nonprofit backed by data center giant Switch, was the only party in the case to not sign on to the idea, saying in a regulatory filing that it would be “premature and imprudent” to change the regulatory structure so close to the pending Energy Choice Initiative ballot question, which would prohibit utility ownership of electric generation plants and contracts.

An attorney for the group, Tyler Pepple, said the PUC should instead open up an investigation and questioned whether the proposed solution to NV Energy’s issue with generating plans was overly generous to the utility.

“My understanding is of what they’re saying is that they have resources that they could potentially develop that would be cheap and competitive with these third party resources, but the IRS normalization rules prevent them from reflecting the true value of these resources in the bidding process,” he said. “If that’s the problem, then NVE’s proposed solution seems to me to be killing a fly with a bazooka.”

Sam Castor, Switch’s general counsel, also suggested that the commission should take its time in making a decision on the utility’s request, given the pending ballot question (which would force NV Energy to divest all of its electric generating assets) and raised concerns that the utility could quickly build the plants and then be forced to sell them off at a profit, or gain an unfair advantage over businesses bidding to take on some of the proposed projects.

“I’m also worried that this approach would increase their portfolio in a way that would only benefit them, and it wouldn’t benefit the public interest,” he said. “For them to be able to participate in a market competitively, they’re always going to have the advantage.”

PUC Chairman Joseph Reynolds, who presided over the hearing, said that he still had some questions to answer on the utility’s proposal, but told participants that the general outline of the proposal excited him.

“We can’t put 21st century technology into a 20th century regulatory model,” he said. “This sounds to me like 21st century technology into a 21st century regulatory model. I’m intrigued by this. For lack of a better word, it seems like a cool thing.”