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NV Energy to offer revamped renewable rate designed to keep businesses from leaving utility

Riley Snyder
Riley Snyder
Energy
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NV Energy is preparing to offer some of its largest customers a special discounted electric rate powered by renewable energy — the electric utility’s first major effort to corral or stop the more than dozen businesses and government entities that have filed to leave the company as an electric customer.

In a news release submitted alongside a filing before the Public Utilities Commission, NV Energy announced preliminary plans for a special, reduced-cost renewable energy rate for some of its largest customers, with requirements nearly identical to those for large businesses able to leave the utility’s service and purchase power from another provider.

Although creation of the tariff still requires approval from the PUC, it marks one of the strongest signs yet of the utility’s effort to slow the tide of businesses filing to leave the utility. Ten entities filed so-called 704B applications (named for the provision in state law) in 2018, and another three, including the Las Vegas Convention and Visitors Authority and The Cosmopolitan, have filed exit applications this year.

A 2001 Nevada law allows large power users to file applications with state energy regulators to leave the utility as long as they meet certain qualifications (including average energy use and if the departure is in the public interest) and if they agree to pay a typically steep “exit fee” designed to ward off any unexpected costs that would otherwise have to be paid by other customers of the utility.

NV Energy CEO Doug Cannon told lawmakers about the proposal last week, and said in a statement that the company still believed it was the “best energy partner” for its customers.

“This sustainable energy solution is a win-win as eligible customers will reduce their energy costs while NV Energy retains the renewable energy credits in order to comply with Nevada’s renewable portfolio standard for the benefit of all customers,” NV Energy CEO Doug Cannon said in a statement.

The PUC has scheduled a hearing on the application to offer the new rate for April 29, 2019. Several entities that could take advantage of the rate or have already left the utility’s service — including Walmart, Wynn Las Vegas, Wynn Resorts, the LVCVA, Las Vegas Sands and Boyd Gaming — filed to participate in the regulatory hearing.

Although several of the entities have left NV Energy as an electric customer, they wrote to regulators that they were interested in the “availability of the tariff and understanding its benefits” as a “competing option” to the 704B exit process.

The plan is essentially an upgrade to the utility’s existing Nevada GreenEnergy Rider (or NRG) rate, which the utility began offering to commercial customers in 2016 and allows them to receive either all or half of their electricity from renewable sources. The city government of Las Vegas in 2016 reached a deal with the utility under the original version of the program to power all of its facilities and buildings with renewable energy.

Essentially, the program keeps in place certain non-bypassable charges placed on all customers (including gas transmission and rooftop solar purchases) while replacing parts of the standard power bill with special renewably-powered rates. The new rates are made possible by PUC approval of the utility’s 2018 Integrated Resource Plan, which allows for construction of six new major solar projects that will add 1,001 new megawatts of solar power to the company’s fuel mix — some of which set price records for the lowest-cost agreements.

Although the application for the new program rate is still pending before the PUC, NV Energy will open an initial enrollment window beginning on March 18, 2019 at 12 p.m. for customers to begin applying for the new rates on a first-come, first-served basis. Contracts would have a minimum term of three years and could extend throughout the life of the renewable projects.

The initial allotments for the program will allow for more than 940,000 megawatt hours of solar energy, including 565,000 megawatt hours in Southern Nevada and 375,000 megawatt hours in the North (a megawatt hour from solar can typically power between 700 to 1,000 residential homes). It will be available to customers who use more than 8,760 megawatt hours of energy annually — similar to requirements for an existing customer to be eligible to exit the utility’s service.

The application filed with the PUC also states that the utility will be able to offer an additional 175,000 megawatt hours of energy through the program later in 2019, because of factors including customers using the program for a one-time use.

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