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More questions on Question 3

We just got these questions from one of our customers about the Energy Choice initiative (Question 3). This is a huge choice for Nevada and we want to keep you informed as we try to understand what it means for our state.

Q: As long as we stay with NE wouldn’t they still have to honor the 405 agreement with those already connected?  And if they raised their rates wouldn’t we still get 95% of the energy we feed back into to grid no matter what the rate is?

A: Yes, they are bound by NRS to honor those Agreements. Yes, you would still get 95% or 88% of retail depending on if you are in Tier 1 or Tier 2.

However, the big question here is how do the new providers treat solar? Question 3 is often thought of as busting NV Energy’s monopoly, but that is not really what it does. It will actually decouple rates. NV Energy will still move power around the state (transmission) but will no longer make the power (generation.) The Retail Choice Providers will be able to sell power to anyone in the state using NV Energy’s transmission lines to deliver it. If passed, you’ll still get a bill from NV Energy that will have a line item for retail generation for the power you used – a lot like you used to get the bill from your local phone company and the long distance carrier’s charges were also on the bill. Here is an excellent article from Utility Dive on how the retail market might look, how it might impact net metered customers, what each side says the Question will do for consumers and who is funding the Question.

If Question 3 passes, NV Energy has said they’ll sell (or perhaps be forced to sell) all of their power generation assets (utility speak for power plants) and will only be in the transmission business. If it does not pass, they have promised to ramp up renewable capacity by a huge percentage with 6 new solar projects. They would probably only retain generation capacity if the state makes them the POLR (Provider of Last Resort – the default option if you do not pick another provider.) If the state does not, how can you force them to buy kilowatt hours from solar customers that they can’t sell anymore? The Legislature and PUC are also grappling with how you force any retail provider to accept net metered customers. The last time any state did this (open up the power market), was in the early 90’s. There were very few NEM customers then. We have almost 40,000 in Nevada. So if you open the market, how do the new providers deal with existing NEM?  They are not bound by statute (as NV Energy is) to honor AB405 and Grandfathered NEM rates. That doesn’t mean a company would not step up and do it, just that the state can’t force it as they could with NV Energy’s monopoly. There is language in the Question that says it will not alter the state’s existing policies on renewable energy which SHOULD preserve net metering.  As mentioned in our earlier post on Question 3, none of this is lost on the Legislature. They have been asking these questions of all the experts who have been testifying to the Committee and the backers of Question 3. If it does pass, there is a 5 year timeline for implementation in which these concerns will be ironed out.

Q: Also, as it stands now, if we sold our home would the 405 transfer to the new owner?

A: Yes, it would. The system is grandfathered in for 20 years from the date of turn on. It is locked to the address, not the owner of the home.

 

Here’s an article from the NV Independent on the report released by The Legislative Committee.  The report contains the recommendations for implementing the open market that were arrived at after a year of study. 

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