In the waning weeks of the Nevada legislative session, a sweeping energy bill is set to be released that will direct NV Energy to wean itself off of buying energy on the open market.
The energy bill will be sponsored by Assemblyman Howard Watts, D-Las Vegas. He said the point of the bill will be twofold: to create a more robust plan for adding in-state renewable energy projects in order to not buy energy on the open market, and to improve affordability around NV Energy projects.
“It really calls for NV Energy to put forward a proposal to accelerate the development of those clean energy resources here in the state to be considered,” Watts said.
There is no timeline set for NV Energy to build out more in-state power generation, but Watts said he wants any plan from NV Energy filed in time to utilize incentives provided by the federal government through the Inflation Reduction Act and other federal legislation. He also said he wants to see a plan with a 10-year horizon.
“We’re asking the utility to put forward a bold plan quite a bit to close their market exposure,” Watts said.
Katie Nannini, an NV Energy spokeswoman, said the utility had no comment on the bill until it has a chance to see the proposed legislation, which has yet to be introduced in the Legislature.
The push to get NV Energy to not rely on the open market comes a year after the company urged customers to save energy to reduce demand on the energy grid during a September heat wave.
NV Energy relies on energy from the open market only in the summer months when demand increases by nearly 2.5 times compared to the winter months, according to Nannini. NV Energy buys about 30 percent of its energy from the open market in the summer, the company has previously told the Review-Journal.
Energy obtained from the open market is more expensive. Doug Cannon, NV Energy’s CEO, estimated that in 2022 a megawatt-hour bought from the open market cost $250 while a megawatt-hour from energy already owned by NV Energy cost about $70.
To reduce reliance on the open market, Watts wants to see NV Energy plan to add a variety of renewable energy resources, including more solar and geothermal energy projects. To make resource planning stronger, he said his bill also would look to tweak the current triennial Integrated Resource Plan process, which essentially functions as a three-year plan that can be amended.
The last full integrated resource plan from NV Energy was filed in 2021, but the company has already filed four amendments with the most recent asking the Public Utilities Commission to approve more than $800 million of spending. Filings with the PUC indicate NV Energy could file a fifth amendment later this year.
Watts said his bill would direct the PUC to create more regulations on what NV Energy proposes in its resource plans and require that amendments be used only “for tweaks and truly unforeseen circumstances.” He hopes that strengthening the process will help the PUC evaluate the true costs of proposals put forward by NV Energy.
Another goal of this bill is to have Nevada ratepayers be less subject to “volatile” natural gas prices in the long run, Watts said. Rising natural gas prices have contributed to several rate hikes in the last year.
Watts’ bill is coming with just less than two weeks before the legislative session ends June 5.
It isn’t uncommon for the omnibus energy bill to come late in the session; the 2021 omnibus energy legislation, Senate Bill 448, was filed 18 days before the Legislature was to adjourn. Watts said this bill has been worked on “consistently” throughout the session and that it’s coming out in the final weeks since it has received a range of input from different organizations, including the Bureau of Consumer Protection, environmental groups, labor groups and major resorts that use a lot of energy.
“It definitely took some time to get that information and bounce ideas back and forth,” Watts said. “I would have loved to have had this figured out a little bit earlier, but we do have it. I did take in all those different perspectives, and tried to put together a policy that I think is best for the state.”
On Tuesday afternoon Watts said the bill is in draft form and he hopes to hold a hearing on it “very soon.” He said he is optimistic the bill can be passed before the end of the session. The bill had not been introduced as of Wednesday afternoon.
“I think that as a result of having all these conversations, we’ve put together a policy that I hope can get some strong and broad support, and move through the process in the coming days,” Watts said.