Utilities file plan for renewable power standards

Kevin Rademacher

Monday, Aug. 8, 2005 | 11:24 a.m.

APPEARED IN THE AUG. 2, 2005 EDITION

Nevada's two largest electric companies have laid out their plans to meet the state's mandatory renewable energy usage requirements.

The renewable energy portfolio standard was implemented by the Nevada Legislature in 2001 and requires that the utilities generate an increasing percentage of their peak power usage from renewable sources, topping out at 15 percent in 2013.

Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno missed their targets in 2003 and 2004. The state Public Utilities Commission decided not to fine the utilities, but Commissioner Carl Linvill, who presided over the most recent case, required the utilities to file a plan detailing how they would meet the requirements in future years.

The plan indicates that Nevada Power will comply with its nonsolar requirements in all years except 2007. "In the interim, Nevada Power will attempt to acquire additional renewable energy and/or renewable energy credits to cover that shortfall," the plan said.

Sierra Pacific Power expects to be in compliance with its nonsolar requirements throughout the "planning horizon." Limitations on the availablility of solar power, however, are expected to prevent compliance with that portion of the mandate until 2007 or 2008, the plan said.

The legislative mandate requires that a portion of the overall requirements come from solar.

The plan indicates that the companies' financial condition -- which deteriorated in the wake of the Western energy crisis in 2000-2001 -- has hindered the ability of renewable energy developers to finance projects that would ultimately sell power to the utilities.

The utilities also made the case in the plan that fines for noncompliance would further stall the process by aggravating the already troublesome financial condition.

Instead of penalties, the companies propose the pre-approval of annual compliance plans by the commission to ensure that the standards are met. In the plan, the utilities indicated that they would submit a draft regulation to the commission for possible action.

The companies also have requested that the commission set pre-determined standards of financial security for renewable suppliers in an effort to limit the "extensive due diligence that is required on each project that is being considered."

Among a series of additional suggestions laid out in the plan, the company suggested careful structuring of a so-called Green Tariff, which allows customers to pay higher rates but dedicating those rates to renewable energy purchases. The company warned that if such a tariff requirement was added on top of the existing portfolio standard it would detract from compliance efforts. Instead, the company said such a tariff should be used to offset compliance costs.