PUC staff criticizes utility’s proposals on renewable energy

Kevin Rademacher

Tuesday, Aug. 16, 2005 | 10:53 a.m.

The staff of the state Public Utilities Commission took exception to many proposals made by Nevada's largest electric utility in a plan to meet renewable energy usage standards established by the Legislature.

The PUC's Regulatory Operations staff made its initial assessment in comments filed with the commission on Monday along with filings by other involved parties, including the Bureau of Consumer Protection, Barrick Goldstrike Mines Inc. and Solargenix Energy LLC, which has proposed a solar power plant in Boulder City.

The compliance plan was authored by Nevada Power Co. of Las Vegas and Sierra Pacific Power Co. of Reno. That plan was ordered by PUC Commissioner Carl Linvill in recent hearings in which the commission indicated it would not fine the utilities for thus far failing to meet minimum standards for renewable usage.

The utilities are required to acquire increasing percentages of their peak power output from renewable sources, reaching 20 percent by 2015.

"The companies' plan includes a wide range of requests for regulatory approvals that would remove or limit the companies' responsibilities with regard to the (Renewable Portfolio Standard) process," said comments submitted by PUC Assistant Staff Counsel Louise Uttinger.

"The companies' plan also contains requests for approval that, if granted, would limit regulatory oversight; remove, shift or restrict due diligence responsibility; generate potentially significant costs for Nevada ratepayers and create inter-generational and inter-company inequities," Uttinger's comments continued.

A key point of debate among the involved parties was the utilities' request for the commission to drop provisions that would impose fines for missing renewable targets. The companies' plan said that the threat of fines created unnecessary uncertainty amid their already weak financial situation.

The Bureau of Consumer Protection argued that dropping the penalties would stifle motivation for compliance.

"The BCP urges rejection of the companies' request that penalties be jettisoned," said comments filed by Bob Cooper, senior regulatory analyst with the BCP. "Penalties provide certainty to the companies and the developers so they are fully aware of what noncompliance will entail and are therefore necessary."

Uttinger's comments echoed the same sentiment.

"Customers would see the removal of penalties as a sign that it is acceptable to not comply with the RPS," the filing said.

PUC staff also criticized a utility proposal that the PUC provide security measures for the viability of renewable developers in order to ease their own burden of due diligence.

"Staff takes exception with the statement made by the companies ... regarding 'the use of security as an alternative to extensive due diligence,"' comments said. "Each company should perform adequate due diligence for any and all of its activities. A company should not be allowed to absolve itself of that duty by requiring security."

The BCP also criticized the companies' apparent lack of interest in investing in or owning large renewable power plants. In its filing the utilities indicated that their involvement in company-owned plants would be limited to "small installations."

"The BCP applauds the companies' efforts in regard to these facilities, especially the public demonstration and education aspects of citing such installations at or near an energy center," the filing said.

"However, the BCP recommends the company should go further and seek ownership or other creative means of holding title or partial title in larger renewable facilities," the filing continued.