Nevada should take steps to foster a competitive electric market, R Street study finds
WASHINGTON (May 19, 2015) – Nevada lawmakers have a unique opportunity to set a national example for how best to regulate distributed generation, according to a new policy brief from the R Street Institute.
In “Governance in distributed generation: A Nevada case study,” R Street Energy Policy Director Catrina Rorke writes that, with Nevada approaching its current mandated limit on customer-generated power of 3 percent of peak-generation capacity, the time has come for changes.
“Recently circulated draft legislation aims to empower the state public utility commissions to oversee changes in the net-metering tariff and rate structures,” wrote Rorke. “It’s time for Nevada to choose between encouraging an innovative, competitive electric market and deferring to monopolistic interests.”
Rorke suggests guidelines for lawmakers to consider as they tackle the pending legislation. First, the arbitrary 3 percent limit should be lifted, as it serves as a de factolimit on choice for all but the earliest actors among Nevada’s electric consumers. That limit will be reached sometime in the second half of 2015, effectively closing the market to new adopters of distributed generation or solar power.
Rorke also suggests establishing a fair net energy metering model.
“The only way to ensure successful application of the DG and NEM services in the future is to require all users contribute appropriately toward the cost of maintaining the electrical grid,” she writes. “This could be accomplished by creating a new electricity rate class or by imposing a unique tariff that accounts for the infrastructure costs and public-support programs embedded in electrical rates.”
DG presents a market-based option to challenge the model of heavily regulated monopoly utilities, Rorke writes, noting that every user can become a power producer and sell that power to others.
“It is the duty of PUCs both to enable freedom of choice and to maintain a robust, reliable electric grid,” Rorke wrote.