Nevada power markets need more competition
The state’s Public Utilities Commission (PUCN) is the testing ground for all these changes. NV Energy is asking PUCN to approve construction of a new $1 billion natural-gas power plant. The full cost of that facility, plus an additional 10.5 percent return to NV Energy shareholders, would be borne by all ratepayers through higher electricity bills.
This past June, the PUCN denied a request from data storage giant Switch to circumvent NV Energy entirely in favor of third-party pathways to access cheap, clean power. Switch since joined with gaming companies Wynn Resorts and Las Vegas Sands and the solar firms SolarCity and Sunrun to form the Nevada Coalition to Protect Ratepayers, an effort dedicated to promoting choice and competition.
By the end of the year, PUCN must determine the future of competition at a smaller scale. Through the Net Energy Metering (NEM) program and other state initiatives, more than 2,500 Nevada households have installed rooftop solar panels. The panels power their homes and occasionally produce enough excess power for the households to sell back to their neighbors.
That’s the heart of NEM. You can sell your electricity to your neighbors and receive a payment for the full retail price. NV Energy sees that as a subsidy; NEM customers pay less than their share for maintaining and operating the power grid. Solar customers see it as fair payment for services, since these private investments may defer pricey capital upgrades in grid and generation infrastructure. A July 2014 study performed for PUCN found no evidence the program is unfairly burdening customers or the utility.
Nonetheless, NEM was limited by the Legislature to 3 percent of the state’s net-energy mix. Nevada customers exceeded that cap this past summer. That means that new customers interested in rooftop solar have no market for their excess electrons, and their neighbors are stuck buying their power from the utility.
The PUCN currently has an opportunity to allow customers to challenge the utility. By lifting the arbitrary cap on NEM customers and establishing a payment scheme that works for every Nevada customer, we can increase competition across the state.
Let’s take a step back. This regulated utility model is a loser for Nevadans. Electricity is too expensive, competition and innovation are squashed, customers are financing frivolous investments and utility profits and real jobs are on the line. We should deregulate the electricity system and promote a model of increased competition and full consumer choice.
Nevadans should be allowed to buy power from any source they want. If that’s inexpensive coal, fantastic. If it’s solar panels on their roof, wonderful. The key here is that NV Energy and misguided legislation and regulation are taking Nevada down a no-win pathway. The PUCN can get the government out of the way and let Nevadans choose the energy mix that’s right for them.