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July 26, 2014

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Energy chief stuns environmentalists with renewable energy approach

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CATHLEEN ALLISON / SPECIAL TO THE LAS VEGAS SUN

Jim Groth, photographed in Carson City.

Sun Coverage

Nevada’s energy director dropped a bombshell a few weeks ago when he issued a combat-themed declaration about the future of renewable energy in the state.

Many people involved with these types of projects say it revealed Jim Groth, whom Gov. Jim Gibbons appointed to the job in October 2009, to be naive and possibly dangerously ill suited for his state post.

Groth is a former Army National Guard chief warrant officer. He was an environmental supervisor for the Guard for a year in Carson City and was a chairman of the Nevada Solar Task Force.

He’s gung-ho about launching an economic revolution using renewable energy companies, and he’s sincerely enthusiastic about making the state the world leader in generation, education and manufacturing.

But renewable energy experts, wildlife officials and environmentalists say that although his goals are worthy, the plan he has outlined for getting the state there is, in parts, ignorant, illegal and even dangerous.

At the heart of these problems, they say, is a profound lack of familiarity with the industry he’s promoting, particularly solar.

In his “energy Economy Declaration” and subsequent interview with the Sun, Groth revealed he believes utility-scale solar plants need only a few hundred acres when they actually require thousands. He cited a large-scale solar project in California as an example of economically beneficial projects planned on Nevada soil. He writes in his declaration that there are only 24 megawatts of utility-scale solar power in the state when there are 95.5 megawatts up and running (not to mention the nearly 230 more under contract with NV Energy and hundreds more under contract to California utilities.)

He also believes upgrading the state’s transmission network to accommodate large-scale renewable energy exporting would cost only about $4 per ratepayer each year, amounting to roughly tens of millions dollars over time, while industry experts anticipate it costing tens of billions of dollars. He believes the tax benefit from the manufacturers that this development would, in his plan, attract, would more than offset the cost to ratepayers.

He initially stated that Nevada benefits from sales tax on solar electricity sold to California, only to acknowledge later that the state gets none.

And Groth’s “plan of attack to successfully develop Nevada’s energy economy” last month shocked environmentalists and energy experts.

In the most talked about aspect of his plan, Groth says the state needs to wrest millions of acres of Nevada from federal control. The goal: to eliminate time-consuming environmental reviews and public-comment periods. Groth says federal environmental policies are nothing more than bureaucratic hurdles that serve mostly to create more work for federal employees. Turning land over to the state, he said, would speed development and attract renewable energy manufacturers and developers to Nevada.

“The greatest thing holding Nevada back from achieving economic success right now is the need to satisfy onerous policies or laws and have the ‘right’ paperwork in order,” Groth writes in his “declaration.”

The “onerous policies” he’s talking about are the requirements of the National Environmental Policy Act, the Endangered Species Act, the Clean Air Act and others. They require anyone planning an activity that will affect an endangered species, cultural artifact, archaeological site, air quality or other environmental factors to fully analyze the impacts and propose ways to offset them when necessary.

The laws were designed to protect people and wildlife.

But Groth sees it differently. He said the people enforcing the laws are taking too long to get the work done and making it difficult to build things so they can keep enough work to justify their jobs. He believes a process that currently takes about 18 months for the BLM to complete should take three months.

“We have the science in our hands. We have mapping and GIS and satellites that can do it faster,” he said. “An environmental review process, even with all this technology, still takes as long to do as it did 25 years ago. My argument would be that it takes so long because a lot of people make money along the chain of steps along the way. Things that take six months could be done in a week. We have the ability to protect our environment by using science. We can improve the process and the speed.”

He proposes the state take over jurisdiction of the best renewable energy and manufacturing spots — about 3 million acres — and have the Nevada Division of Wildlife, state department of environmental protection and state and county air quality officials do the environmental reviews.

He believes that once the state has control of the land, federal environmental law should no longer apply.

“We have the option of telling the fed that they can’t have jurisdiction here,” he contends.

But it is illegal to ignore federal environmental protection laws, even on state land, U.S. Fish and Wildlife and NDOW officials say.

BLM Nevada spokeswoman JoLynn Worley called Groth’s proposal for a three-month process for environmental impact statements “likely legally indefensible,” given the strict public input requirements and impact and mitigation analysis required under the law.

“An environmental-impact statement is by law a thorough, science-based analysis of all impacts,” she says. “A quickie, throw-it-together document would only result in additional delays as almost certain legal challenges would be filed.”

And that potential uncertainty would hinder a developer’s ability to get loans for projects planned in the state, energy experts said.

Officials also scoffed at the notion that a legitimate environmental review could be conducted without ever setting foot on the land.

After learning he didn’t have the option of ignoring federal law, Groth proposed changing it. Sounding very much the military man that he is, Groth says Nevada is in a war against economic collapse, and all’s fair in war. He says Congress needs to rewrite national environmental laws to exempt renewable energy-related projects.

“When the feds decide they want to do something, they generally get it done. I get a little bit fidgety when people tell me (about) NEPA, that it’s like a gospel document that can’t be changed for the new renewable energy paradigm in our country. If we really care about that, then the people we vote in can make those changes fast.”

Environmentalists were shocked at his proposal to avoid environmental reviews to speed up power plant and manufacturing warehouse development over millions of acres.

“Suggesting that we dump or shortchange the National Environmental Policy Act has been a holy grail of developers, some municipal agencies and others who care more about profits than the quality of life in the Silver State,” says Progressive Leadership Alliance of Nevada spokesman Launce Rake. “That’s a ticket to disaster.”

Nevada, with its massive budget cuts, furloughs and layoffs, doesn’t have the ability to administer that much land while it is lining up potential developers or to perform environmental reviews. And with a growing deficit, there is nowhere to get the funding to build these programs.

“NEPA is an important safeguard to ensure that large projects are developed in a responsible manner,” says Nevada Conservation League Political & Policy Director Kyle Davis. “The environmental community believes strongly in renewable energy, and we are currently working with the industry to streamline the process, but there is a reason for the process and there is no reason not to act responsibly.”

Groth, who describes himself as “an environmentally concerned guy,” maintains that his proposals are adequate to protect the land in the state, much of which has “a whole lot of nothing” going on.

“This is a war against unemployment and economic woes,” Groth said. “If it takes waging a legal war on the issues so that practices get changed to allow us to conduct this faster, so be it.”

Groth’s plan isn’t entirely a wash, environmentalists say. There are more common-sense proposals. But even those need to be refined. They say that could easily be achieved by his renewable energy “strike force,” especially if it is expanded to include someone from the environmental community.

They like his ideas on rooftop solar, for example. Groth says the state needs more rooftop solar power, backyard wind turbines and small-scale hydro power. Those forms of “distributed gene ration” are hamstrung by the allowances for conservation in the state renewable energy portfolio and by state-regulated limits, he complains.

NV Energy can meet up to 25 percent of its requirement for renewable energy by simply conserving energy. Groth says the energy efficiency standard should be separate. Nevada should not be “faking its way through.” The renewable energy quota should only be met by actual renewable energy, he says. “Don’t throw a bunch of things in there that aren’t renewable.”

That approach could very well lead to the construction of more renewable energy plants. The problem is it would also mean comparatively higher utility bills, NV Energy spokesman Rob Stillwell says. The less electricity the utility has to generate, the less it has to bill to its customers, he says.

Energy conservation is also a source of economic growth for the state, with federal money flowing in for weatherization projects. Homeowners and businesses are also increasingly interested in paying for energy-efficient retrofits because they save money.

NV Energy has spent $120 million on energy-efficiency and conservation programs and expects to spend $63 million more on it this year if the Public Utilities Commission signs off on the plan.

“That goes into jobs and manufacturing,” Stillwell says. “There is no question that energy conservation is a new economic driver.”

“We’re being lauded on a national level for having conservation” in the renewables portfolio standard,” Stillwell adds. “Other states are looking at it to copy it.”

Most renewable energy advocates say the purpose of the portfolio standard is to clean the air and reduce greenhouse gas emissions.

Groth says that’s not enough, that it should also boost the tax base. So on top of removing the energy efficiency allowance, he’s advocating for the expansion of state-regulated distributed generation incentive programs. Currently the state authorizes NV Energy to release a limited amount of money to residents, schools or small businesses that are installing wind, solar or hydro power-generating facilities on their property. The program is very popular and usually fills up the first day enrollment opens.

That has created a backlog of people wanting to participate, which Groth says is slowing development in the installation industry and driving away manufacturers. He wants the fee charged to electric customers to support the program to be increased by the Legislature so more and larger projects can be included each year. He also wants the cap on the incentive, currently at 1 megawatt, removed.

NV Energy has argued in the past that releasing too much sporadic electricity supply, like wind or solar, onto the grid would cause problems. And forcing all ratepayers to fund part of a solar panel on the roof of their neighbor’s home or employer’s business is controversial in this libertarian-leaning state.

Groth knows this and has commissioned a feasibility study that would determine how much distributed generation the grid can take.

“I think we can have load balance and more distributed generation,” Groth says. “And soon we’ll have a study that shows us just what we can do. Instead of releasing 4 megawatts (over a few years) we should be releasing 64.”

He is also insisting on the elimination of the requirement that NV Energy produce 5 percent of its renewable energy with solar power.

Groth doesn’t believe solar should get special treatment and that all types of generation must compete head-to-head with other types of renewable generation.

The problem is that solar electricity is more expensive to produce than wind or geothermal, so it isn’t able to complete strongly for contracts with the state utility. Removing the solar requirement could ultimately lead to Northern Nevada, where wind and geothermal resources are strongest, getting the lion’s share of the economic benefit from the portfolio standard.

Renewable energy experts have long said the solar requirement is one of the leading drivers of large-scale solar power development in the state. Without it, the companies have fewer potential buyers for their product, making it more difficult to get financing and making the state less attractive. Removing it could make the state appear hostile toward solar development, which aside from maybe geothermal power, is the state’s best renewable energy resource. And without lots of new renewable energy power plants going up, it’s harder to attract the economic superheroes of renewable energy industry: manufacturers.

Currently, there are just two things standing in the way of Nevada’s ability to secure renewable energy manufacturers: Nevada and other states.

Nevada has never had a strong presence at renewable energy industry conferences where much of the recruiting takes place. Even before the recession, the state couldn’t afford the type of large recruitment teams other states have, Groth said.

“Nevada is just now stepping up to the plate,” Groth said. “The Nevada Development Authority hasn’t done a lot with it, they haven’t had the resources to. ... Over the past couple of years we’re rising from a farm club baseball team to the big leagues.”

He says Nevada still can’t afford to expand those efforts, but if it can get federal land to offer on the cheap to manufacturers, even a small contingent can be competitive.

Other states, namely New Mexico and Michigan, are offering empty warehouses and tracts of state-owned land for renewable energy component manufacturers — for free, Groth said. Most of Nevada’s available land is tied up under federal jurisdiction or is zoned for other uses.

Groth says he doesn’t want to offer free land to manufacturers but figures if Nevada had control of more land appropriate for manufacturing, it could offer incentives that, when combined with Nevada’s business-friendly tax structure, would tip the scales in the state’s favor.

There’s also the issue of where those manufacturers will sell their goods.

Renewable power plant development, while not a big economic engine in its own right, is a key component to attracting the manufacturers.

They need not only a cheap place to make the stuff, but also someone to sell it to. And the closer that buyer is, the more they save on transportation costs.

So attracting renewable energy developers is important to Groth’s plan to launch Nevada as the renewable energy capital of the world. He wants the citizens of Nevada to pay for the transmission lines needed to export thousands of megawatts to the California border. “California can pay for the transmission lines on their side,” he says.

Groth calls for state-controlled renewable energy zones for renewable power plants and manufacturing. He thinks it’s ridiculous that the federal government can collect any lease or royalty money on renewable energy projects in the state. (The BLM keeps all lease income from solar and wind projects and 25 percent from geothermal plants.)

Instead of extending the lease income-sharing mechanism to all renewable energy plants on federal land — a proposal that enjoys the bipartisan support of Sens. Harry Reid and John Ensign — Groth wants the best renewable land to be turned over to the state.

“Even when a portion of (the money) is returned to the state, it is still not the federal government’s place to develop property in Nevada,” he says. “Because the feds control the land, it keeps Nevada from controlling its future and takes lease money that should be going to the state.”

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