Utilities fail to meet ‘04 renewable standard

Kevin Rademacher

Monday, April 4, 2005 | 11:08 a.m.

Nevada Power Co. of Las Vegas notified state utility regulators on Friday that it failed in 2004 to meet its minimum requirements for using renewable energy sources to meet customer demand for electricity.

The company also missed the requirements in 2003 and asked at that time for an exemption for 2004 as well. While regulators decided not to fine the utility for coming up short in 2003, they denied the requested exemption for 2004.

In Friday's filing, the company again asks the state Public Utilities Commission to exempt it from the requirements because of a lack of available renewable energy sources.

"If the commission determines that for compliance year 2004, there was not a sufficient supply of electricity made available to the companies pursuant to renewable energy contracts with just and reasonable terms and conditions, the commission shall exempt the companies from the remaining requirements of their (Renewable Portfolio Standard)," the company said in its filing, citing the 2001 legislation that mandated the portfolio standard.

That legislation requires increasing percentages of the power used by the utilities to serve customers to come from renewable sources, topping out at 15 percent in 2013. The companies were supposed to reach 5 percent in 2004.

State Sen. Randolph Townsend, R-Reno, was a chief architect of the portfolio standard. He said the utilities' failure is disappointing but not unexpected.

"This is a concern to everybody involved with this, but we also understand the reasons," he said. "We knew that they would not be in compliance."

He also said that he was more concerned with meeting the 15 percent target in 2013 than the 2004 benchmark.

"You have to have targets," Townsend said. "Otherwise, you're just wandering around out there ... What the real concern is is the long-term component, and I think they are going to meet that easily."

The filing said Nevada Power and Sierra Pacific Power Co. of Reno have entered into 17 long-term contracts for renewable power and contract to purchase renewable energy credits. Of those deals, 14 have received approval from the PUC.

"However, within months of having obtained Commission approval of the initial contracts, several developers began to report difficulties in brining their projects online," the utilities' report said.

Four of the contracts have been terminated and deliveries of renewable energy or renewable credits on another five deals have been delayed by a year or more, the report said.

The shortcomings are happening despite the fact that the Temporary Renewable Energy Development Program was put in place to help ensure renewable developers that payment could be secured despite the weak financial position and junk credit rating of the Nevada utilities.

Sierra Pacific Power met the 5 percent renewable requirement for 2004, based on the number of existing geothermal power plants in Northern Nevada. It did, however, fail to meet additional requirements that 5 percent of its renewable come from solar resources.

"Therefore, based on the information in the annual report, the companies are seeking the determination from the commission to exempt them from the remaining requirements, or any appropriate portion, for compliance year 2004," the filing said.