As the electric utility for both Reno and Las Vegas, NV Energy has a monopoly on power service for most of Nevada.
But a new report shows that nearly 20 percent of all electricity consumed in the state originates from a source outside of NV Energy.
According to the annual report published last month by the Governor’s Office of Energy, NV Energy accounted for 80.69 percent of all power consumed in Nevada in 2017, a historic low for the utility likely driven by the growing number of large businesses that have left the company as an electric customer and purchased power from retail providers.
Even with the 2018 defeat of the Energy Choice Initiative — which would have required the state drop the monopoly utility model and move to a retail market by 2023 — news that a growing percentage of consumed power comes from non NV Energy sources will likely add to questions as to how the utility plans to deal with long-term planning and financial stability without some of its largest customers.
The change is largely being driven by retail providers powering companies that have filed to leave NV Energy. Their share of overall energy consumption in the state has tripled since 2012, rising from 2.76 percent of energy consumed in the state to just over 9 percent in 2017.
While the percentage is still relatively small, it’s assuredly set to increase — 10 companies, including major gaming companies such as Boyd Gaming and Station Casinos, all filed applications to leave NV Energy as an electric customer in 2017.
Under a 2001 law (often called 704B, after the section in law), Nevada companies that consume large amounts of electricity are allowed to file applications with the state’s Public Utilities Commission to purchase power from a different provider than NV Energy. Initially, only a handful of mining companies took advantage of the new law, but a growing number of businesses starting in 2014 have filed applications to leave the utility. The departing companies are typically required to pay a multi-million dollar “impact fee” assessed by energy regulators designed to ensure other NV Energy customers aren’t saddled with unexpected costs.
Other sources of electric consumption have stayed relatively flat from year to year. Consumption reported by the state’s rural electric cooperatives slightly decreased as an overall percentage of total electricity consumption (5.41 percent to 4.91 percent), though the actual number of megawatt-hours consumed increased by about 20,000 between 2016 and 2017.
2017 also marked the first time this decade that produced solar power (50.05 percent) overtook geothermal energy (41.34 percent) as the largest renewable source in the state. But overall, 69.5 percent of generated electricity in Nevada in 2017 came from natural gas, compared to 18 percent from renewables, 9 percent from coal and 3.3 percent from hydroelectric.
Some entities have sought to compel the utility to more thoroughly include departing businesses in their long-term planning. Earlier this month, a Switch-backed nonprofit called Smart Energy Alliance filed a motion with the state Public Utilities Commission asking for a reconsideration of a portion of NV Energy’s Integrated Resourcing Plan (IRP), the state-mandated triennial planning document where the utility lays out its plan for future energy supply and expected demand.
An attorney for the nonprofit said in the filing that commissioners should weigh the potential effects of an increasing number of companies departing the utility, given uncertainty over how lessening of electricity demand caused by fewer power-intensive customers could affect the utility’s overall plans, including the six large-scale solar power plants approved as part of the IRP.”
“Now that it is apparent that 704B cases will be impacting NV Energy and its resource planning, 704B planning should be given more than a cursory view,” they wrote, referring to the section of state law allowing businesses to apply to leave NV Energy. “The increase in 704B filings is not by coincidence and it is unlikely to be temporary.”
The filing also notes that an estimated 355 NV Energy customers may be eligible to file a 704B application and leave the utility as a customer.