EDITORIAL: For cheaper electricity, take politics out of energy market

Developing stories from Nevada’s energy sector underscore what happens when politics distorts the marketplace.

First, as reported by the Review-Journal’s Sean Whaley on April 9, Strip titans MGM Resorts International, Wynn Las Vegas and Las Vegas Sands Corp. want to follow the lead of data storage giant Switch and fire NV Energy, which would allow them to secure their own power supplies for less money.

Second, as reported April 15 by the Review-Journal’s Laura Myers and Mr. Whaley, Nevada’s growing solar industry has accused NV Energy of trying to maintain its power monopoly by stifling a program that lets customers with rooftop solar arrays sell surplus electricity to the utility. The “net metering” program is now capped at 3 percent of all electricity users — a limit that’s expected to be met by the end of the year. Solar companies claim NV Energy used its political muscle to quash a bill that would have increased the cap to 10 percent and allowed their businesses to grow.

On Wednesday, Caesars Entertainment told the PUC it might stop purchasing power from NV Energy. These large power consumers would have to pay enormous exit fees to NV Energy — likely in the tens of millions of dollars — to minimize the financial impact on residential and smaller commercial customers, who would become victims of the power monopoly’s sudden supply-and-demand problem. That leaving NV Energy pencils out for these companies despite the exit fee says everything about the utility’s rates.

NV Energy isn’t allowed to deliver the cheapest power possible. The government mandates that a percentage of the company’s power come from expensive, taxpayer-subsidized renewable sources. Additionally, NV Energy is undertaking the costly process of shutting down its coal plants in favor of more renewables, which are less reliable. And if too many Nevadans are allowed to generate power from their rooftops, it might increase rates for those without solar panels because of the utility’s shrinking customer base and inability to rapidly adjust to market forces.

If NV Energy operated free from portfolio mandates, and if renewable industries were forced to stand on their own without tax subsidies and said mandates, competition would drive down power costs. Instead, Nevadans are paying more for power and stand to lose the option to ditch NV Energy while large employers break free.

The solution to both problems is to take much of the politics out of energy. Get renewables off the backs of taxpayers, who are forced to subsidize it and then pay higher prices for the power. Let homeowners who want to generate their own power pay full price for solar panels — and subject their surplus power to market conditions. If NV Energy’s customers don’t need the solar power, its customers shouldn’t have to buy it.

The people deserve energy policies that make power cheaper.