Utilities see bright side to new Senate energy legislation

By Stephanie Tavares

Friday, May 14, 2010 | 2:01 a.m.

Two East Coast senators unveiled climate-change legislation Thursday aimed at reducing carbon emissions in the U.S. and lessening the nation’s dependence on foreign oil, but the bill likely will have little effect locally.

The American Power Act, written by Massachusetts Democrat John Kerry and Connecticut Independent Joseph Lieberman, outlines goals for reducing the nation’s carbon emissions by targeting the biggest polluters and providing incentives for businesses and individuals to reduce gasoline and electricity consumption.

The bill was enthusiastically received by the energy industry, which for years has fought carbon taxes and stronger versions of the bill. Supporters include local utility NV Energy.

“I think it’s a fair bill,” NV Energy CEO Michael Yackira said. “We’re very supportive of having a (climate) bill and I believe this bill is beneficial because it gives us more clarity as to the timelines and expectations both near term and long term.”

Yackira said that certainty is imperative as utilities such as NV Energy plan power plants or major projects that could end up being banned.

Yackira said he’s waiting for more information on how the bill will affect NV Energy’s three coal-fired power plants that generate 27 percent of the state’s electricity, according to a document recently mailed to ratepayers.

The bill compels any operation that emits more than 25,000 tons of carbon dioxide a year — about 7,500 power plants and industrial facilities — to reduce emissions over the next several years.

Yackira said that if any of NV Energy’s coal-fired power plants fall under the new bill, it would evaluate whether retrofitting or shutting them down and finding new sources of baseline generation would be cheaper.

“I don’t think we can comment on this section until we know the specifics of what Congress is trying to achieve,” he said.

But the reception to the bill from environmentalists and the renewable-energy industry was lukewarm. Several national groups said the bill was a good starting point, but wouldn’t create the kind of change needed to seriously affect global climate change or create a new clean-energy economy.

“We’re pleased with the effort to place a price on carbon, an essential step in stopping global warming and stimulating greater deployment of renewable-energy sources like solar,” said Rhone Resch, Solar Energy Industries Association president.

But that wouldn’t happen, he said, unless the nation dedicated more resources to getting renewable-energy projects built. Without that, the nation might get cleaner air, but few new jobs.

What he and others would like to see is the passage of a companion bill — the American Clean Energy Leadership Act — that would create a national renewable-energy portfolio standard and provide more job-creating incentives in the clean-energy and energy-efficiency industries.

If Resch is right about the necessity of incentives to launch the renewable-energy industry here, passing this legislation is imperative. Nevada’s political and economic leaders are depending on a renewable-energy revolution to salvage the state’s economy.

At a news conference Thursday, Kerry said the two bills would likely be combined. Senate Majority Leader Harry Reid of Nevada said he supports amending the climate bill to include aspects of the energy bill.

Either approach is good news for Nevada businesses like Steve Strasser’s Las Vegas-based Power Efficiency Corp. His company makes a device that manages electricity that flows to conveyor-belt machine systems such as those used in rock crushers or escalators. It would, for example, send less electricity to run an empty escalator than a full one.

The technology generally reduces electricity used by a machine by about 10 percent.

But it’s more than just electricity the device is saving. When that electricity is generated by burning fossil fuels, such as natural gas in a power plant, energy efficiency equates to carbon-emissions reductions.

But there are few incentives in the climate-change bill for businesses to purchase energy-saving and carbon-reducing products.

The companion bill, however, includes incentives such as tax credits and government-sponsored loan programs for businesses and individuals to buy products that reduce the amount of electricity they use.

Those incentives would spark growth of energy efficiency, Strasser said.

“Energy efficiency is sold mostly based on economics,” he said. “If there’s an incentive that offsets the upfront cost, then we sell more, and then society sees the benefit over time.”

Strasser has had to reduce his staff — mostly well-paid engineers — during the recession. A national incentive program for energy-conserving products like his would mean he could hire more people.

And he’s not alone. The energy bill includes incentives for increased distributed generation — smaller-scale renewable-energy installations such as rooftop solar panels. It recommends the creation of programs where people can pay for a rooftop solar installation via small annual or monthly increases on their property taxes.

If enough Americans signed on, it would put solar installers and maybe even manufacturers back to work.

“We should not pass up this opportunity to move America’s clean-energy economy forward,” Resch said. “A well-structured bill that deploys more renewable energy will create stable, well-paying jobs, help achieve energy security and fight global warming.”