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PUC rejection of contracts irks NV Energy, developers

The Public Utilities Commission of Nevada says it’s just trying to avoid unnecessary power costs.

But NV Energy and several renewable power developers say the commission’s latest decision sets back clean-electricity development across the Silver State.

The commission on Thursday rejected five contracts that NV Energy signed to buy more than 100 megawatts of power and energy credits from renewable developers, including Fotowatio Renewable Ventures and Mountain View Solar. The reasoning? NV Energy didn’t prove that it needs the contracts to meet requirements that it get 25 percent of its electricity from renewable sources by 2025, nor did it properly analyze the cost risks of the deals. The commission gave NV Energy 90 days to refile the contracts with additional information.

Renewable developers counter that the commission’s findings are a sudden regulatory shift that imperils future green-energy plants.

“The order will have a chilling effect on the ability of Nevada to attract new business to the state to create jobs in the solar sector,” said Carla Pihowich, vice president of marketing and regulatory affairs for Amonix, a solar photovoltaics manufacturer that employs more than 350 people at its North Las Vegas factory. “In addition, the amendments could effectively stall renewable-energy development in Nevada.”

Tim Carlson, managing partner of Reno wind-farm developer Nevada Wind, called the commission’s decision a “terrible roadblock.”

Nevada Wind’s Virginia Peak project in Washoe County wasn’t among the power-purchase agreements the commission rejected, but it’s scheduled to appear in later requests. Delaying the current crop of deals for three months pushes back Virginia Peak so much that the tax incentives funding 30 percent of the wind farm may expire before construction can begin in 2012. If that money evaporates, it’ll be difficult to borrow funds to build Virginia Peak, Carlson said.

“The commission wants more information, and they deserve more information,” Carlson said. “So change it later. Now is not the time to change the process, in midstream with so much on the table. Dock this boat. Tell us what we need to do going forward and let us go.”

But Commissioner Rebecca Wagner said ratepayers would be on the hook for unnecessary development costs if NV Energy buys more renewable energy than legally required. And it’s difficult to determine from the evidence NV Energy provided whether the utility is signing too many green-power deals or too few, she said.

“These are not onerous, and they’re not new requirements. They’re standard amendments,” Wagner said. “It’s not rocket science. We just need something to hang our hat on to approve these. Give us a reason to approve the contracts. It shouldn’t take 90 days to get it back in here, get people back to work and get these projects up and running. Not meeting a burden of proof is not something I can get beyond.”

The three-member commission’s ruling is a change in direction for the agency, which chastised NV Energy in July 2010 for not submitting enough renewable power-purchase agreements given historical underperformance of green projects. Former commission chairman Sam Thompson ordered approval of seven power-purchase contracts, but noted that only a third of the renewable projects NV Energy contracts with are completed on time. Another third are delayed, and the remainder are canceled, he noted.

Thompson left the commission in January. Commissioner Alaina Burtenshaw took over the chairmanship, and Commissioner Luis Valera joined the agency in February. Wagner has served on the commission since 2006.

Burtenshaw and Wagner voted to deny the contracts; Valera to approve them.

NV Energy responded to the rejection by noting that the evidence the commission wants isn’t anything the agency has asked for before. The details in the utility’s filing are similar to those it has included in all power-purchase agreements since 2007, the company said in a statement.

“While we respect the commission’s decision, the new and extensive requirements that have been ordered may inhibit renewable energy development in Nevada,” the company said.

Company officials added that they view the state’s renewable portfolio standard as a floor, or a minimum requirement, and not a ceiling that limits how much renewable electricity they buy or generate.

Contact reporter Jennifer Robison at
jrobison@reviewjournal.com or 702-380-4512.

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