Costly solar power contract binding, National Guard tells governor

CARSON CITY -- Nevada National Guard officials told Gov. Brian Sandoval on Tuesday that they cannot get out of a contract that requires them to pay about twice as much for solar energy than it would cost if they bought power from NV Energy.

"Is there an option to turn it off?" Sandoval asked about the energy the Guard receives from solar panels on its carports in Carson City and Las Vegas.

That option doesn't exist, responded Jennifer McEntee, administrative services officer for the National Guard. She said that under a 20-year contract executed in 2009, the Guard pays a flat 15 cents per kilowatt hour to Sierra Solar. The company put solar panels over carports at the guard's headquarters in Carson City and at the Las Vegas Readiness Center and the Edsall Training Center in Clark County.

A typical home in Nevada uses 1,250 kilowatt hours of power per month.

The company spent $17 million on the solar panels, which now produce 100 percent of the energy for the three Guard facilities.

Because of the binding contract, Sandoval and other members of the Board of Examiners had no choice but to agree to give the Guard $46,284 to cover unforeseen utility costs through June 30. The Legislature's Interim Finance Committee must decide whether to make the actual appropriation.

NV Energy charges about 8 cents to 10 cents per kilowatt hour for electricity for businesses in Carson City and 7 cents to 8 cents in Las Vegas.

Guard members told the governor that when the contract was executed, they were paying more than 14 cents per kilowatt hour for energy and expected electricity prices to rise. They anticipated that by the second year of the contract, solar power would be as cheap as that provided by NV Energy and in subsequent years it would be cheaper.

But NV Energy spokeswoman Faye Andersen said in late 2009 that her company charged businesses in Northern Nevada not 14 cents, but 12 cents a kilowatt hour for energy in Carson City. Residential rates then were about 14 cents per kilowatt hour.

In answering questions from the governor, McEntee and other Guard members admitted that Sierra Solar had told them NV Energy power costs would be cheaper than solar power until the sixth year of the contract. They said their own advisers found that benefits would come sooner.

"It is hindering our operations," said McEntee about the Guard's need to pay more for energy.

The decision to switch to solar power was made because "it would get us off the grid," she said.

A groundbreaking ceremony announcing the switch was heavily publicized and attended by then-Gov. Jim Gibbons.

The three solar facilities produce about 3.4 megawatts of solar power. Commercial power plants produce about 500 to 1,300 megawatts.

Because solar power remains much more expensive than commercial power, state Budget Director Jeff Mohlenkamp said he is holding up another possible contract with Sierra Solar for other state facilities.

"We are carefully analyzing what we do on a going-forward basis," he said.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.