PUC asked to consider new type of power rate

An interim legislative committee asked the state Public Utilities Commission today to investigate a new form of electric rate that supporters say would boost green-energy jobs.

But the rate also would increase consumers’ power costs, advocates acknowledged.

At issue are feed-in tariffs, or power rates that assure generators of renewable energy that they’ll be paid a fair price based on production costs and they’ll receive that price in contracts that run as long as 25 years.

Bob Tregilus, co-chairman of the Electric Auto Association of Northern Nevada, testified that guaranteed rates would bolster development of renewable energy because such power sources require “huge amounts” of startup capital. Developers would feel more confident about such investments if they knew they’d recoup building costs.

Feed-in tariffs are popular in Europe: Some countries, such as Germany, have used the rates to finance green-power development for nearly 20 years.

In Germany, feed-in tariffs have added nearly 5 percent to consumers’ power costs. But Tregilus credited the tariffs with creating 280,000 green jobs in the country of 82 million.

He said the tariff cost in Nevada could be half that in Germany because of the Silver State’s abundant renewable resources, which include abundant sunshine and a multitude of geothermal hot spots.

Committee member and state Sen. Mike Schneider, D-Las Vegas, said Germany has installed more than 22,000 megawatts of wind power and more than 3,800 megawatts of solar power since it began charging feed-in tariffs in 1991.

“Those are impressive results,” Schneider said.

But feed-in tariffs haven’t fared so well in the United States. Only a few states and cities have implemented the rates, and many of those efforts have failed to yield optimum results.

Sara Birmingham, director of Western policy for the Solar Alliance, said many U.S. jurisdictions have had trouble finding the right tariff balance. Set rates too low, and developers won’t step up. Make them too high, and a jurisdiction can generate more interest than it can handle, and surplus profits for developers could result.

“Neither are outcomes we want to see,” she said.

Jurisdictions attempting to use feed-in tariffs also run into trouble setting long-term prices that will remain “fair” for years to come, Birmingham said.

“The United States hasn’t quite gotten it right yet, but this is an open invitation to you, and hopefully, Nevada will get it right,” she said.

The legislative committee asked the Public Utilities Commission to look into the feasibility of feed-in tariffs in Nevada. Commissioner Rebecca Wagner said the agency would put an item on its Nov. 19 agenda to launch the process of considering the rates.

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