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The end of renewable portfolio standards in Nevada?

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Black Rock Solar Creative Commons

One after another, disgruntled citizens took the mic at the May 26 meeting of Governor Brian Sandoval’s renewable energy task force, filling an hour with their complaints and questions about the public utilities commission’s recent decision to hike electricity rates for rooftop-solar customers. Would the task force embrace the recommendation, made by a subcommittee charged with studying distributed generation, that NV Energy grandfather in customers who signed up for rooftop solar before the rate hike? (Ultimately, the answer was yes … but only for 20 years instead of the recommended 25.)

But if all public eyes were on rooftop solar, the attention of the environmental community was trained on another issue: the state’s renewable portfolio standard, or RPS, as insiders call it. The recommendations made by the subcommittee that studied clean energy sources included this rather dramatic suggestion: Double the portion of Nevada’s energy that must come from renewable resources from 25 percent by 2025 – a goal the utility can meet in part by taking credit for customers' energy efficiency programs and rooftop solar installations – to 50 percent by 2040. It represented one of the nation’s most aggressive renewable portfolio standards.

The effort failed. Perhaps more surprisingly, it wasn’t supported by Patricia Spearman, a Democratic state senator from North Las Vegas who’s known as a renewable energy proponent. What happened? And what now?

Support comes from

“The motion (that the task force consider a bill to increase the RPS) was not moved forward by the task force,” says Jennifer Taylor, executive director of Clean Energy Project and the vice chair of the clean energy sources subcommittee, which made the recommendation. “They wanted to send it back to us to work on it some more.”

Sandoval had revived the New Energy Industry Task Force, first set out in a piece of 2009 legislation, following last year’s rooftop-solar flap. In doing so, he gave the task force a directive larger than one issue: gather diverse (and sometimes opposing) interests in the energy sector to craft policies that set a course for developing the renewable energy sector.

Although the task force has through September to make its final report to the governor, June 1 was the deadline to propose legislation that the governor could include in his slate of bill draft requests for the 2017 Legislature. So the task force called its three subcommittees — on distributed generation, clean energy sources and grid modernization — to the table on May 26 to present their recommendations for the governor’s proposed bills. The distributed generation committee only made the rooftop-solar grandfathering recommendation. The grid committee didn’t recommend anything, saying the complex issue required more study. The clean energy committee made several recommendations, such as requiring NV Energy to favor economic and environmental benefits among its criteria for planning its future energy mix, and increasing funds for programs that help low-income households improve their energy efficiency.

But the subcommittee’s boldest recommendation, and the one that generated the most discussion, was to double the state’s RPS. Task force members Danny Thompson, of Nevada’s AFL-CIO, and Starla Lacey, of NV Energy, voiced objections to the proposal’s lack of a cost analysis, along with its likelihood of necessitating an electricity rate increase. Kyle Davis, a consultant for the conservation community and chair of the subcommittee, replied that it’s impossible to project costs of an RPS increase because of energy price fluctuations, and that the state has passed previous RPS legislation without cost projections. Sunstreet’s Jeremy Susac, chair of the distributed generation committee, also noted that there are other means of constraining costs to tax-/ratepayers, such as limiting the total percentage of the utility’s revenue that compliance can represent.

Spearman, however, objected on more abstract grounds: “I agree with the spirit of this recommendation. My reservations have to do with continuing with the concept of RPS. I’m not sure that that particular mode of getting there has not outlived its purpose. I can understand where we’re trying to go; I just don’t like RPS.”

What doesn’t she like about it? She described renewable portfolio standards as a floor rather than a ceiling. If you require someone to do just so much, that’s all they’ll do, she told Desert Companion — and subsequently emailed links to several research papers to back up this belief.

“You can go back and look at any state, including ours, and see where, when the RPS goal was reached … there hasn’t been a lot of innovative activity to go beyond it,” she says. “And we usually just rest on our laurels: ‘We’ve reached this, so ta da! We’ve arrived.’”

To meet the governor’s mandate to think big about the future of renewable energy in Nevada — and keep up with the rapidly evolving technology in the field — the task force needs to move beyond RPS, Spearman says. She’d prefer a more strategic recommendation that defines where the state is trying to go and how to get there.

Asked if her objection had anything to do with that of labor (represented by Thompson), the pro-union senator said, “Are there some hurdles, with respect to business models and how we support organized labor’s goals? Yes, there are some hurdles, but we can solve them. There are some issues to make the transition from fossil fuels to renewables and protect consumers’ interests. Can we solve them? Yes we can. Yes we can.”

Further complicating the RPS recommendation, task force member Joshua Nordquist, a vice president at geothermal company Ormat, presented an amendment that turned it upside down: Rather than requiring the utility to produce a certain minimum percentage of its energy from renewable sources, Nordquist proposed that the state set a maximum percentage of energy Nevada’s utility customers consume that can come from fossil fuels — 60 percent by 2026, 55 percent by 2033 and 40 percent by 2040.

This amendment incited further debate, mainly having to do with reliability and viability issues. Susac pointed out that restricting fossil fuels could have unintended consequences, such as forbidding the use of backup power sources during emergencies. Thompson felt it could be expensive and impractical, for instance by forcing the utility to shut down bought-and-paid-for natural gas plants while they’re still productive.

Nordquist encapsulated the frustrations of those who supported the clean energy committee’s proposals, noting, “This is definitely an issue of high importance to the governor. I’m fearful of going forward without recommending anything to the governor at this stage. Are there adjustments here similar to what we did with the previous one (on grandfathering rooftop solar customers), so that we can agree on something to recommend to the governor today?”

But in the end, neither the RPS recommendation or the proposed amendment passed a vote. Angela Dykema, the chair of the task force and director of the Governor’s Office of Energy, said the committee could “continue studying it if they choose, and if it comes back, we’ll have further deliberations at that time.”

The following day, Nevada Conservation League released a statement showing its disappointment: “Although the law requires NV Energy to get a quarter of its power from clean energy by 2025, the utility currently gets only 14 percent of its power from clean, renewable sources generated in our state, and the amount of power we get from job-creating, in-state renewables will remain virtually flat because of loopholes in current law. Updating the law to keep the renewable energy economy is necessary because NV Energy currently has no incentive to switch from fossil fuels to 21st century power sources. Meanwhile NV Energy’s sister company in Iowa, MidAmerican Energy, is showing it’s possible — and even profitable — to go all-in on clean power. MidAmerican recently announced it will soon provide Iowans with 85 percent renewable energy, with a goal of eventually reaching 100 percent.”

Taylor, the clean energy subcommittee’s vice chair, seems unflapped. “We’re moving into the second decade, basically, of RPSs,” she says. “Is that still the best way to get to a clean energy future? There is some indication that maybe it’s not. … Doing something different, such as what Josh (Nordquist) proposed would allow us to continue to lead in clean energy development and innovation.”

The committee will continue meeting through September, and Taylor says there are “many other avenues” besides the governor for having its recommendations implemented. Asked if she would propose a bill based on Nordquist’s proposed amendment, Spearman says it’s possible. She also notes that related work is ongoing as a result of a bill (SB360) that she authored, and that passed, in the last legislative session.

“None of this is going to be easy,” Spearman says. “But because something is difficult is no excuse not to try. And it will be difficult. But we have to try. Wherever we see there’s a challenge, we ought to have hard conversations to mitigate the challenge and move forward.”

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