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Dan Jacobsen, Technical Staff Manager, Attorney General's Bureau of Consumer Protection
BY AMY KINGSLEY -- NV Energy wants to close down its coal plants and replace them with natural gas and renewable energy. Sounds pretty straight forward, right?
Dan Jacobsen of the Bureau of Consumer Protection did the math, and realized that NV Energy wants to replace 1,000 Megawatts of coal power with 2,700 Megawatts of natural gas and coal. So in the process of winding down its coal plants, the company will nearly triple its generating capacity -- despite a decline in energy demand, Jacobsen said.
NV Energy makes more profit by building power plants than it does by buying power on the wholesale market, Jacobsen said. So the proposal makes sense for the company’s bottom line.
“If the legislature were to approve it as they’ve proposed it, this would guarantee the company that, in a period of time when there isn’t much growth, they get to build and add more investment to their rate base, which will result in larger profits over about a ten to twelve year period,” Jacobsen said.
But how will it work out for consumers? Although the investment in new energy may pay off in 30 to 40 years, in the next decade or so, customers will pay more for NV Energy’s investment in new sources of cleaner power.
“It’s about a 9 percent price increase, and that’s above inflation,” Jacobsen said. “A 9 percent price increase is pretty significant on customers, particularly, you know, Nevada has the highest of any Mountain West electricity rates, so adding 9 percent to that is a burden that we think ought to be wrestled with at the Public Utility Commission.”
Jacobsen said the company should keep the proposal to close coal plants, and submit the rest of its plan to the Public Utilities Commission.
“I’m very hopeful that the company will come to the negotiating table and come up with a more reasonable approach —one that just focuses on closing down the coal plants and replacing that capacity and leaving the rest of this to the Public Utilities Commission,” Jacobsen said.