Recently, an organization known as the Nevadians for Affordable, Clean Energy Choices filed a proposed constitutional amendment with Nevada’s Secretary of State’s office. The proposed constitutional amendment is an attempt to open up Nevada’s energy market and become deregulated, giving consumers electric choice.
This proposed amendment follows closely on the heels of three large casino companies (Wynn Resorts, MGM Grand, and Las Vegas Sands) that want the freedom to choose other wholesale electricity sources. Should they decide to leave NV Energy, these casinos face exit fees (charged by Nevada’s PUC) of approximately $126 million in total.
While the fees have been challenged so far, should the companies look elsewhere for electricity they will still be stuck paying a hefty bill to the state.
Electricity Deregulation in Nevada
Deregulation is already available in many states throughout the country. Nevada has seen an attempt to move towards a deregulated energy market before. In the late 1990s and early 2000s, lawmakers pushed to move electric utilities toward this model, however Kenny Guinn (the governor at that time) deemed the idea too high risk to make an official change.
Moving to amend the Nevada Constitution to include energy deregulation would be a huge step in helping all casinos, a major source of revenue for the state, to afford their electricity. It would also aim to help other types of residential and commercial customers within the state find more competitive rates for their homes and businesses.
The Energy Choice Initiative
The Energy Choice Initiative indicates the proposed amendment changes to the Nevada Constitution. Several new sections pertaining to electric choice are included in this document including:
Declaration of Policy:
“The people of the State of Nevada declare that it is the policy of this State that electricity markets be open and competitive so that all electricity customers are afforded meaningful choices among different providers, and that economic and regulatory burdens be minimized in order to promote competition and choices in the electric energy market.”
Rights of Electric Energy Purchasers:
“Effective upon the dates set forth in subsection 3, every person, business, association of persons or businesses, state agency, political subdivision of the State of Nevada, or any other entity in Nevada has the right to choose the provider of its electric utility service, including but not limited to, selecting providers from a competitive retail electric market, or by producing electricity for themselves or in association with others, and shall not be forced to purchase energy from one provider. Nothing herein shall be constructed as limiting such persons’ or entities’ rights to sell, trade or otherwise dispose of electricity.”
The document also indicates that laws need to be applied to establish this open energy market no later than July 1, 2023. It also requests “Legislature to set standards for safety, reliability, use of renewable resources, and protections for customers, but does not set or secure any certain price or rate structure.”
Changing the State Amendment
Initiative owners have to obtain approximately 55,000 petition signatures (each) in order to move the changes forward for a ballot vote in November of this year. In addition, if successful, the proposed changes must move through a second vote in 2018 before it can officially be added to the state’s constitution.
The number of signatures collected so far is currently not available to the public. That being said, energy issues and regulations are of particular interest to Nevada customers. This interest is directly related to the rise in solar panel technology and the subsequent higher rates approved last year by regulators for the customers that use solar panels.
Who is NV Energy?
In July 1999, Sierra Pacific Power, Nevada Power and Sierra Pacific Resources merged, successfully creating one of the fastest growing energy companies in the United States. In business for over 150 years, their service areas include, Las Vegas, Reno-Sparks, Henderson and Elko, which covers approximately 45,592 square miles.
In 2003, Berkshire Hathaway Energy acquired NV Energy. Today, the company provides energy services to 1.3 million customers and almost 40 million tourists every year.
NV Energy’s Response to the Initiative
NV Energy has released a list of principles to facilitate questions and discussions amongst major stake-holders. Overall, these principles highlight the fact that NV Energy has concerns about fair treatment in the proposed energy deregulated market.
Some of these principles include:
“Customers across all segments want and value choice. Energy choice can take many forms: choice of service provider, choice in energy supply, and choice in energy programs. In the near future, choice could be improved through the development of a smarter grid that provides customers more control and greater flexibility. To the extent possible, Nevada?s energy policies should encourage and promote customer choice.”
“Market restructuring must not shift costs to vulnerable populations. Energy is an essential service and more so than in other areas of the country, monthly bills in Nevada can vary dramatically with usage, leaving economically disadvantaged or vulnerable segments of Nevada’s population particularly exposed. Changes in the regulatory environment should not harm these segments of the population.”
“Broad based stakeholder involvement in any restructuring of Nevada’s energy market is fundamental to ensuring alignment around policy objectives; sufficient planning, education and execution; and to reducing uncertainty that could impact future investment of capital in the state.”
“Market restructuring should seek to protect the employment of Nevadans. NV Energy and its contracted suppliers employ a significant number of Nevadans. These employees have dedicated their careers to meeting Nevada?s energy needs. More specifically the employees are committed to providing energy safely, reliably and efficiently while delivering best-in-class service to customers. Changes in Nevada?s regulatory regime need to ensure these employees continue to be employed in the service of providing Nevada with its energy.”
Click here to access the complete list of NV principles regarding the proposed changes regarding electric choice.