Rhetoric on renewables does not match reality

By Jon Ralston

Sunday, July 24, 2011 | 2:01 a.m.

I think Nevada politicians of all stripes have said renewable energy is our future more than they have said the children are our future.

And that is saying something.

From Senate Majority Leader Harry Reid on down, we have been told that, especially in these trying economic times, we need to go green to get more green. Reid and others boast of new solar plants. Lawmakers impose a renewable portfolio standard on NV Energy. Sun, wind and geothermal are the equivalent of the state’s gold rush a couple of centuries ago — the potential for untold riches and transformative economic effects.

And yet — there is always an “and yet” in Nevada — a decision last week by the Public Utilities Commission draws into stark relief the difficult policy questions ahead and raises the specter that in a state built on gambling, the risk may be too great, the reward too elusive. Or is it?

In a 2-1 decision, the PUC rebuffed NV Energy’s plans to buy power from two prospective solar facilities in Clark County, deeming the applications flawed and forcing the utility to return in 90 days with amended filings. In so doing, with an order that was at times scathing in calling the company’s application misleading and deficient, the PUC also seemed to be saying the 15 percent renewable requirement was a ceiling, not a floor — a reductio ad absurdum that understandably confused the company and others.

This was a blow to the power company, which is suffering a summer horribilis that began with Brian Sandoval’s veto of its planned transmission bill, with the governor fretting in his message about the potential cost to consumers. But here’s what everyone, including some politicians, seems to miss in talking about the renewable economic panacea: Like any new technology, the first iterations are the most expensive, so renewable energy is going to cost more and have an effect on ratepayers.

And this is where this debate gets even more interesting: To achieve long-term economic and environmental benefits — to make Nevada a cleaner state and create an energy-exporting economy — people are going to have to accept an initial hit on rates.

Sandoval, as evidenced by his transmission bill veto, clearly is worried about costs (although media attention surely had some effect on his decision). And when I tried to get the governor to comment on his PUC’s squashing of two renewable projects, he backed up his board majority:

“The order speaks for itself. NV Energy’s application was deficient. They were ordered to refile in 90 days.”

There are many interesting issues raised by the PUC’s order — and I have posted it on my blog on the Sun’s site — but this sentence is most illuminating: “The Commission finds that (NV Energy) has failed to meet its burden of proof by failing to identify the extent to which the new contracts are necessary to meet demand and comply with the RPS (Renewable Portfolio Standard).”

The PUC staff folks, who will always take a hard line and probably should, argue that the utility’s filing is undermined by “a stack of uncertainties, risks and unknowns.” But there are so many uncertainties and unknowns — with the shaky economy, with the mercurial renewable energy market — that no utility could possibly satisfy all X factors.

As the company argued, “The renewable planning process is extremely fluid and literally can change on a day-to-day basis.” Carpe diem or lights out?

It’s easy to pummel NV Energy. Like any power company, it has an image problem. People always complain about rates, especially those on fixed incomes, especially during the scorching summer. Generally, the life of a regulated monopoly is good. Just ask Republic Services.

But this story, frankly, is not so much about the utility as the state and its policymakers. A year ago, the PUC instructed NV Energy to sign more renewable contracts. Now, it may be — inadvertently, I hope — sending a message that once the RPS is reached, you can slow down.

These are not easy questions. But they must be answered. And not, as is S.O.P. here, slowly. How long have we waited for education reform, for tax reform?

The renewable market is in its infancy, but it is growing quickly. Utilities have to deal with high attrition rates — failed or canceled projects. And they have to do what the state’s core industry has done occasionally: gamble. Is the risk worth the reward?

What the posturing politicians don’t tell you when they hype renewables as job-creating catalysts is that most of the jobs are temporary. The real potential economic boon is what it could mean if we can export energy — perhaps with a transmission line. Hmmm.

If only this were so black and white, as easy as saying the children are our future.