Good morning, and welcome to the Indy Environment newsletter.
Friday was a major deadline day at the Legislature, and hundreds of bills failed to make it out of committee. They are effectively dead (though nothing is actually dead until the end of session). This week, the newsletter is looking at what environmental bills died and what bills are still alive.
As always, we want to hear from readers. Let us know what you’re seeing on the ground and how policies are affecting you. Email me with any tips or suggestions at firstname.lastname@example.org
Natural gas legislation, efficiency bills die on deadline day: Two closely watched pieces of natural gas legislation failed to make it out of committee. The first bill, AB380, was aimed at requiring natural gas utilities undergo more rigorous resource planning, an effort to align the utility’s infrastructure investment with the state’s climate goal of net-zero emissions by 2050.
SB296, backed by Southwest Gas, sought to harden the utility’s infrastructure by establishing a pipeline replacement program. The legislation from Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) did not get a hearing and was not given a special exemption to move forward.
Why did these bills die so early in the session? I’m working on a piece with my colleague Riley Snyder about what happened and the gas utility’s lobbying efforts around the bills.
Mining oversight bill moves forward as regulatory reorganization stalls: The Assembly Committee on Natural Resources advanced AB148. The bill seeks to prevent so-called “bad actors” — companies or executives with a track-record of not meeting mine-cleanup obligations — from doing business in Nevada. Another bill, AB240, seeking to dissolve the Nevada Division of Minerals by splitting up its regulatory and advocacy roles, did not advance out of committee.
State’s water bills: Several proposed bills backed by the state’s Division of Water Resources died before the Friday deadline. SB155, legislation to change the requirements for Nevada’s top water regulator, the state engineer, did not advance past a key Senate committee. Similarly, two controversial proposals died, at least in their original form. AB354, legislation to create “water banks,” did not make it out of a committee after conservationists and rural interests argued that the proposal could lead to speculation and was not specific to Nevada water issues. Companion legislation, AB356, passed, but was amended with a largely unrelated conservation proposal backed by the Southern Nevada Water Authority. Its proposal seeks to remove unused turf.
There are still many bills to keep watching (this is by no means an exhaustive list):
Water legislation: An amended version of AB146, which passed out of committee on Friday, seeks to better manage water quality issues arising from indirect pollution. It also declares the state’s policy to a right to clean water. AB97 seeks to require regulators to form a working group to look at PFAS, often called “forever chemicals.” And of course, there’s the Southern Nevada Water Authority’s bill (AB356). It’s going to be interesting to watch how it is received in Carson City, in Las Vegas and in the Colorado River Basin.
Energy/Emissions legislation:AB349 seeks to close the “classic car” loophole, which allows cars that are not, by most reasonable definitions, “classic” to evade regulations for tailpipe emissions. Another bill, AB383, looks to direct the state to adopt energy efficiency standards for appliances. And while most bills have been introduced at this point, Sen. Chris Brooks (D-Las Vegas) could still offer an omnibus clean energy bill.
Mining resolutions: Lawmakers could still consider three resolutions to raise taxes on mining (AJR1, AJR2, SJR1), first passed during the special session over the summer.
Land and conservation legislation: AB171 aims to make it the state’s policy to protect stands of swamp cedars, geographically isolated populations of Rocky Mountain juniper trees that are sacred for Indigenous communities in the Great Basin (our story on the bill from March). And SB52 looks to create a program for awarding dark sky designations.
WATER AND LAND
State senator raises concerns about hedge fund’s water marketing proposal: Sen. Pete Goicoechea (R-Eureka) said last week that he is concerned about a hedge fund’s proposal to market water in Humboldt County, Nevada Newsmakers’ Ray Hagar reports. Last summer, we co-published a three-part series on concerns about the hedge fund’s activities across the West.
The push to protect Tiehm’s buckwheat: Tiehm’s buckwheat, a rare plant that is threatened by proposed lithium mining outside Tonopah, has been targeted for special protection, according to new documents reported by Scott Sonner with the Associated Press. The records show that state and federal officials, recognizing the threats to the buckwheat, found only on a small stretch of land in Nevada, considered measures to conserve its habitat.
Restoring a wetland where few remain: Amy Alonzo, with the Reno Gazette Journal, reports on wetland restoration in southeast Reno — with sobering statistics about the loss of wetlands.
Coming up in the Supreme Court: A newly formed Supreme Court commission to study water law in Nevada plans to have its first meeting on April 16, the court announced this week.
What I’m reading: The Atlantic published a powerful essay by David Treuer making the case for returning the stewardship of the national parks to Indigenous communities. Weaving history with our present moment, the essay is worth spending time with. “We live in a time of historical reconsideration, as more and more people recognize that the sins of the past still haunt the present,” Treuer writes. “For Native Americans, there can be no better remedy for the theft of land than land. And for us, no lands are as spiritually significant as the national parks.”
What the snow tells us about intensifying drought: Across the West, the snowpack holds much-needed water for ecosystems, irrigators and communities. The timing of when that snow melts is critical. As the climate changes, the timing is changing, with significant ramifications. InsideClimateNews reporters Bob Berwyn and Judy Fahys look at what research tells us about the effects of longer dry spells and earlier snowmelt. One quote that stood out: “We’ve grown up in a world in which snowpack has been a reliable reservoir, but it’s not that way anymore.”
ENERGY AND MINING
Deseret News’ Sofia Jeremias writes an in-depth pieceabout the Thacker Pass lithium mine. “In Nevada, mining has a long legacy of offering economic opportunity, giving it an influential voice among policymakers eager to accommodate the industry’s interests,” Jeremias writes. “It appears that may remain the case when it comes to mining the state’s lithium resources.”
Last year, Gov. Steve Sisolak’s administration released a climate strategy that emphasized the need for a long-term transition away from using natural gas and the need to start planning now.
Much of the state’s efforts around climate change have focused on transitioning from fossil fuels to renewables in how electricity is produced (most of the state’s power still comes from natural gas). But the climate strategy was significant because it singled out another area where natural gas is predominant: It’s still the default option for cooking and heating in homes and businesses.
In order to meet the state’s statutory goal of reducing greenhouse gas emissions to net-zero by 2050, the climate strategy said policymakers need to plan out an equitable transition away from indoor natural gas by scrutinizing new utility infrastructure, giving customers a choice to switch to electric appliances and giving utility regulators more oversight over the planning process.
Assemblywoman Lesley Cohen (D-Henderson) is sponsoring a bill, AB380, that aims to do that. At its core, the legislation would require gas utilities to go through a comprehensive planning process meant to consider the effects of decarbonization on their operations and ratepayers.
The legislation also directs state utility regulators to compile one or more reports on the role of gas utilities in reducing greenhouse gas emissions, how to ensure a safe and reliable grid with fewer customers paying for the system and strategies to ensure that the transition is equitable.
On Tuesday afternoon, the legislation got its first public airing in a hearing that stretched on for more than two hours. Supporters of the bill, including the Nevada Conservation League and the Natural Resources Defense Council, argue that planning for a long-term transition from natural gas is a necessary and common sense approach. Without planning today, they argued, ratepayers could be saddled with paying off unnecessary gas infrastructure for years to come.
Consumer Advocate Ernest Figueroa, who represents ratepayers in proceedings before utility regulators, said in testimony that he supported the legislation and agreed with that assessment.
If it’s the state’s policy to transition from natural gas by 2050, Figueroa said “it is imperative for economic reasons that natural gas resource planning be implemented so that natural gas utility customers are not left with billions of dollars in stranded assets when that time comes.”
None of this is happening in a vacuum. Policymakers from cities and states across the country have increasingly looked at indoor gas use with more scrutiny as they address climate change. And the efforts have come up against opposition from utilities and an industry that says it wants to be part of the solution, as it makes the case for continued — and in some cases expanded — natural gas use, arguing that switching to electric will be more costly.
On Tuesday, Southwest Gas, the state’s largest gas utility, testified in opposition.
CEO John Hester noted that the utility, with expansions in Mesquite and Spring Creek, supports economic development and argued that the company is already highly regulated. Hester said the utility is “fully supportive of taking efforts in energy efficiency and reducing greenhouse gas emissions, but we are also very concerned about the needs of our customers here in Nevada.”
NV Energy, which supplies natural gas to buildings in Northern Nevada, also came out against the bill. CEO Doug Cannon said the utility, which stands to gain from electrification, supports the concept of a gas planning process, but he said it should not be tied to specific policy outcomes.
For months, Southwest Gas has deployed a full-court press lobbying strategy, building a coalition with concerns about strategies mentioned in the state climate plan and AB380.
In February, the utility helped organize a coalition letter to the governor’s office with the header “Clean. Affordable. Natural Gas.” Last week, a new group, the Coalition for Cleaner Affordable Energy, began posting videos from business groups campaigning against the legislation. Many of the business groups featured in the videos testified against the bill at Tuesday’s hearing.
Southwest Gas is advocating for its own legislation, SB296, which would allow gas utilities to apply with state regulators to replace existing infrastructure and recover costs through a monthly rate. Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) introduced the proposal in March.
David Bobzien, who directs the Governor’s Office of Energy, and Kristen Averyt, the state’s climate policy coordinator, testified in neutral on the legislation. But both officials noted that the climate plan calls for a transition away from natural gas that will require a planning process.
“The intent of AB380 is consistent with the state climate strategy in that it addresses the need to reduce greenhouse gas emissions from natural gas in order to meet our state’s 2050 net-zero emissions target,” Averyt said.
At the hearing, lawmakers from both parties expressed major questions about the impact of AB380, raising concerns about costs and higher rates for low-income households. For about an hour, lawmakers on the Assembly Committee for Growth and Infrastructure questioned the bill sponsors with concerns that AB380 could disrupt reliability and have a disproportionate impact on low-income households, seniors on fixed incomes and underserved communities.
The legislation’s sponsors noted the costs of inaction and said that the proposed bill language asks state utility regulators to investigate “strategies to limit the impact of a transition from the use of gas in buildings on low income households and historically underserved communities, including, without limitation, such persons who rent or lease their residence.”
We’ll be writing more about natural gas and lobbying efforts over the next few weeks.
Here’s what else I’m watching this week:
Water authority looks for a turf removal law: Toward the end of a long committee hearing on two controversial state-backed water bills Monday, the Southern Nevada Water Authority made some big news. The authority testified in neutral on AB356, one of the bills being pushed by the Nevada Division of Water Resources, and then went on to propose an alternative:
The proposed bill, AB356, seeks to establish a conservation credit program that state water officials argue would create an incentive to use less water. But the bill faces broad opposition from agricultural interests and conservationists who are concerned that such a program is out of step with how water is managed on-the-ground and could potentially lead to speculative behavior. Enter the Southern Nevada Water Authority.
After lawmakers heard opposition to AB356, a water authority lobbyist, Andy Belanger, asked the committee to consider an amendment to the bill or separate legislation for its own conservation initiative. The water authority, for weeks, has indicated that it was seeking a legislative vehicle to remove unused turf by the end of 2026.
Across the Las Vegas Valley, there are about 5,000 acres of non-functional turf — grass that is decorative and used for landscaping in medians, along sidewalks or in entryways to communities. “It is purely for show,” Belanger said. “And it is a luxury our community can no longer afford.” Non-functional turf is a leading driver of water use across the Las Vegas Valley, and while the water authority has long offered incentives to remove grass at residences, it has run into some opposition with HOA boards and other hold-outs.
Backing from groups: The water authority’s push yesterday came with buy-in from key groups. The Vegas Chamber, the Southern Nevada Homebuilders Association, the city of Henderson and the city of North Las Vegas all backed the water authority’s proposal at the hearing. And shortly after the hearing ended, the Center for Biological Diversity put out a statement in favor of the water authority’s proposal.
Farmers, conservationists criticize water banking bill: The AP’s Sam Metz has an update on another bill (AB354), which the Assembly Committee on Natural Resources heard Monday. Rural water users, agricultural interests and conservationists expressed concerns that a bill to create “water banks” had not been fully vetted and could lead to unintended consequences.
Closing the classic car loophole: My colleague Jannelle Calderon offers an update on efforts to fix a loophole in the state’s Emissions Inspection System that allows drivers to register a car as “classic,” evading smog emission standards, even when it is not in fact a “classic” car.
Couldn’t drag me away: My colleague Riley Snyder found that of all the proposed legislation in Carson City, a resolution on wild horses has generated the most opinions (by quite a bit).
WATER AND LAND
Colorado River cutbacks: Excellent reporting by The Arizona Republic’s Ian James on how hydrology in the Colorado River, driven by climate change, is setting the stage for mandatory cuts. The story explains what the cutbacks will mean, and it is a must-read for understanding the road ahead on the Colorado River. From the article: “Lake Mead, the biggest reservoir on the river, has declined dramatically over the past two decades and now stands at just 40% of its full capacity. This summer, it’s projected to fall to the lowest levels since it was filled in the 1930s following the construction of Hoover Dam. The reservoir near Las Vegas is approaching a threshold that is expected to trigger a first-ever shortage declaration by the federal government for next year, leading to substantial cuts in water deliveries to Arizona, Nevada and Mexico.”
'Mediocre' water year wraps up for Tahoe, Truckee basins (via the RGJ’s Amy Alonzo)
Nevada facilities to get Interior funding: “One of several investment projects in Nevada will be $5 million to modernize infrastructure at the Lake Mead National Recreation Area and improve access to drinking water for visitors, concessioners and employees,” Jeniffer Solis writes for the Nevada Current. Because of declining reservoir levels on Lake Mead, the project will relocate the Callville Bay water intake barge and also improve service roads to the new site.
Greater sage-grouse declines: A comprehensive USGS report showssignificant declines in Greater sage-grouse populations over the past six decades and a nearly 40 percent population decrease since 2002. Last week, a federal judge struck down a project to allow more grazing in an area identified as high-quality sage-grouse habitat, the AP’s Scott Sonner reported.
Good morning, and welcome to the Indy Environment newsletter.
As I sat down to write this week’s newsletter, I checked my outline only to realize that many of the stories I’m following right now have something to do with the Legislature — in one form or another. Almost halfway through the legislative session, I decided it was time for an update.
This week’s newsletter is going to take on a different format today. I’m going to start it with a few takeaways from the session so far. This is in no way fully comprehensive of the legislation out there, and I plan to write more on these issues over the coming weeks. If you have any thoughts on any proposed legislation or see any interesting bills, email me at email@example.com
1) Legislation to regulate natural gas: The fight over how to transition away from natural gas is coming to the Legislature. The contours of the debate were drawn last year after Gov. Steve Sisolak’s administration released a state climate strategy calling for a phased transition away from using the fossil fuel in homes and businesses. Now there is proposed bill language.
On Tuesday, Assemblywoman Lesley Cohen (D-Las Vegas) introduced AB380, legislation that requires utilities to undergo more rigorous regulatory planning and decrease building emissions by 95 percent by 2050. As former Las Vegas Sun scribe Miranda Wilson writes for E&E News, Southwest Gas and business groups plan to oppose the legislation. A similar coalition sent a letter to Sisolak last month with concerns about the climate strategy’s plans around natural gas.
On Tuesday, several environmental groups, including the Natural Resources Defense Council, the Nevada Conservation League and the Sierra Club, put out a press release in support of the bill.
Since October, Southwest Gas has said they planned to pursue legislation that would allow the utility to replace pipelines and infrastructure. Earlier this week, Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) introduced SB296, which would allow gas utilities to apply to utility regulators for gas infrastructure modernization plans and recover costs through a monthly rate.
2) Changing mining oversight: A few weeks before the Legislature convened on Feb. 1, the seven commissioners who oversee the Nevada Division of Minerals held a public meeting to discuss legislation that the mining industry was closely monitoring: three resolutions to raise taxes. The commission wrote a letter saying the mining tax resolutions were not in the state’s interest, and the commissioners recommended the formation of a task force to study the issue.
The division, a non-cabinet agency, has a dual mandate. It is charged with regulating oil, gas, geothermal and lithium brine exploration. At the same time, it educates the public about mining, provides information about the industry, and advocates on policy. The division’s oversight board, comprising commissioners with backgrounds in extractive industries, advise the governor and the state on policy related to the industry. AB240aims to separate those two functions.
The proposed legislation, which had its first hearing this week, would dissolve the Division of Minerals and fold its regulatory function into the Nevada Division of Environmental Protection, which oversees hardrock mine permitting. The Governor’s Office of Economic Development, which serves as a clearinghouse for industry, would assume the division's other roles.
Assemblyman Howard Watts (D-Las Vegas) introduced the bill. At a hearing on Monday, the Center for Biological Diversity and the Nevada Conservation League supported the measure, arguing that it would reduce the influence of the industry in crafting regulations and state policy.
But environmental groups were split. Great Basin Resource Watch, a mining watchdog group, and the Progressive Leadership Alliance of Nevada argued against the bill because it would dissolve an oversight board that last met in 2015 and currently has no members. A Sisolak spokesperson said the governor has received applications and plans to make appointments.
Another bill, AB148, introduced by Assemblywoman Sarah Peters (D-Reno), prohibits so-called “bad actors” — corporations or executives who have defaulted on mine-cleanup obligations in the past — from obtaining a permit to engage in mining and exploration activities in Nevada.
3) Fixing the “classic car” loophole: We’ve all seen them out on the road. The “classic car” that resembles no such thing but allows its driver to pay a lower price for registration and avoid smog testing. AB349, a bill introduced by Watts on Monday, aims to close that loophole. The bill would limit the “classic car” designation for antique cars not used for everyday transportation.
As my colleagues wrote earlier this week, AB349 would do a number of other things related to vehicle emissions: “It would also make some changes to the regulations for people who test exhaust emissions and authorize the DMV to establish a remote sensing system for exhaust emissions in Clark and Washoe counties. It also raises the fees assessed on businesses that conduct smog tests. The bill also exempts new motor vehicles from having to undergo a smog test until their fourth year of life. Current law requires it after the second year of life.”
4) A water authority bill? The Colorado River picture is bleak. Most of the watershed, the main source of Las Vegas’ water supply, is facing extreme or exceptional drought. Consumptive use, the amount of water Las Vegas uses from the Colorado River each year, ticked up in 2020, according to a slideshow the Southern Nevada Water Authority presented to its board of local government officials last week. And the water authority has a serious message: Conservation.
It’s not a new message (see the Ryan Reaves ad), but the water authority is doubling-down on efforts to remove non-functional turf (ornamental grass in medians, next to sidewalks, etc…) in a world where incentives alone might not be enough. In testimony this month, a water authority lobbyist said the agency was potentially looking for a legislative vehicle that would require local governments and agencies to write regulations for removing non-functional turf.
Why that was necessary became more clear at the water authority board meeting last Thursday. Turf removal programs — even when incentivized or subsidized — can run into opposition from HOAs and other entities, despite the fact that most HOA residents support “smarter landscapes” (yes, the water authority conducted a survey on it). Fixing the issue might require legislation.
5) Changes to water law: For more than two years now, the Department of Conservation and Natural Resources has contemplated legislation that would change the statutory qualifications for serving as the state engineer, Nevada’s top water official and administrator of the Division of Water Resources. Under the law, the position requires the person holding the position to be a licensed Professional Engineer, or a P.E. But according to the state agency, that requirement can limit the applicant pool for a job that is not exclusively focused on engineering.
SB155, which came out of the interim Legislative Committee on Public Lands, would change the qualifications for the position. The legislation would require the state’s top water regulator to be “experienced and competent in water resource management and conservation” and to “have a demonstrated ability to administer a major public agency.” But it would exempt the official from the professional engineer requirement if a deputy in the division was a licensed engineer.
Brad Crowell, who leads the natural resources agency, said that the proposed measure would “expand the pool of qualified applicants” to those with technical expertise in other areas of water management. At a hearing Thursday, the legislation was met with opposition from a wide range of water users and groups. A hydrologist for Kinross Gold and the Nevada Mining Association testified against the bill, as did the Great Basin Water Network. Groups raised concerns that the legislation could open up the hiring process to appointments driven by politics.
In a closing statement, Crowell said there were “more red herrings and conspiracy theories” than constructive feedback in the testimony. A spokesperson for the agency declined to provide information on what the “conspiracy theories” were and what outreach the state had done to fill recent vacancies but pointed The Nevada Independent to Crowell’s testimony.
On Monday, the Legislature introduced two additional bills on behalf of the state agency that seek to make changes to water law. AB354, described in the bill text as the Nevada Water Banking Act, allows for the creation of water banking programs. Another bill, AB356, would create a program for water conservation. Both are bills worth watching during the session.
Another bill, introduced by Peters, aims to regulate water quality pollution from indirect sources, such as chemical runoff, motor oil and fertilizers. Indirect pollution, known as nonpoint or diffuse pollution, is a leading cause of water quality issues in Nevada and the U.S. AB146 had its first hearing last week. Most of the people who testified agreed that nonpoint source pollution is a problem, but agricultural interests and municipal water users raised concerns about the bill.
6) The Innovation Zone proposal: We’re continuing to follow the legislative effort to establish “Innovation Zones,” which would let developers with large land-holdings break off from existing counties and form new local governments. As we reported Monday, the building trades signaled their support for the plan. And Elko County, in a meeting last week, flagged several concerns.
Here are a few other stories I’m watching this week:
What climate change means: One of the most informative parts of the state’s climate strategy, released last year, was a chapter that focused on what science tells us about the many ways climate change is affecting — and will continue to affect — Nevada. As someone who often researches this topic, it is valuable to have the science in one place. This week, the Nevada Climate Initiative released a fact-sheet summarizing those findings.
Utility regulators approve NV Energy transmission line: “NV Energy's proposed Greenlink transmission line and renewable energy initiative has received approval from Nevada's utility regulators,” Matthew Seeman reports for KSNV in Las Vegas. “The Public Utilities Commission of Nevada approved moving forward with the plan, which aims to accelerate the development of clean energy on public lands, a spokesperson for NV Energy said Monday.”
Nevada Gold Mines eyes growth: “An intensive strategic review by executive teams from Barrick Gold Corp. and Nevada Gold Mines has confirmed the enormous geological potential of the NGM properties and outlined key development projects,” the Elko Daily Free Press reports.
Seepage from the Truckee Canal: The city of Fernley is suing federal water managers over plans to line the Truckee Canal. As Scott Sonner reports for the Associated Press, “lawyers for the town a half-hour east of Reno have filed a new lawsuit accusing the U.S. Bureau of Reclamation of illegally failing to consider the expected harm to its municipal water supply and hundreds of private well users who tap into the groundwater based on what they say are binding water allotments, some dating to World War II.”
Apple completes solar project in Reno: “McCarthy Building Companies recently completed construction of the Turquoise Solar Project in Washoe County, Nevada,” writes Kelly Pickerel in Solar Power World. “The 61-MWDC solar farm is located on approximately 180 acres in the Reno Technology Park — a 2,200-acre industrial park shared between Apple and Turquoise Solar, who own approximately 1,600 and 600 acres, respectively.”
Behind the Bar is TheNevada Independent’s newsletter devoted to comprehensive and accessible coverage of the 2021 Legislature.
In this edition: A bill on “Stablecoin” that is totally not related to Innovation Zones, increasing utility regulator fines, changes to wrongful conviction compensation and heartburn on abolishing education-focused commissions, including one created by beloved former Assemblyman Tyron Thompson.
Check this link to manage your newsletter subscriptions. This newsletter is published on Mondays and Thursdays.
I want to hear from you! Questions, comments, observations, jokes, what you think we should be covering or paying attention to. Email me at firstname.lastname@example.org.
I’ve spent a lot of time this week thinking about Texas.
Everyone is generally aware of the massive power grid failures that left millions of Texans without reliable electricity, natural gas service, or even clean water in the midst of a massive winter storm. Dozens of deaths have already been reported and the toll is expected to rise.
I’ve avoided commenting on much of the news in Texas because I’m just not an expert in ERCOT, natural gas pipeline infrastructure or the wild confluence of factors that led to the greatest forced blackout in American history (I also have to write this newsletter). There have been some greatbreakdowns of what exactly happened to the Texas power grid, as well as some not-so-great ones.
But back in 2017 and 2018, I spent probably too much of my time following the debate and issues around potential implementation of a similar retail energy market in Nevada, in the form of Question 3. It would have amended the state’s Constitution to require that Nevada set up a retail electric market similar to the one in Texas and a handful of other “choice” states (I wrote a long story about why the measure failed).
Even if Question 3 had passed, Nevada would still be in a much different position than Texas. ERCOT, the grid manager for Texas, isn’t connected to any other state’s grid in order to avoid federal regulation. Nevada also has a much different mix of fuel resources than Texas, a different geographical layout and different weather conditions and patterns that affect electric supply and demand in different ways.
I don’t want to get too far in the weeds on retail choice states and what happened to Texas last week, again because this is nominally a newsletter about the Legislature and not Riley’s Thoughts About Electric Markets.
One universal takeaway from last week is this: our lives are governed by increasingly complex systems, whether it be the electric grid, health insurance, unemployment insurance or even the operations of the state government and Legislature. At the same time, expertise in those areas is harder to find, and people tend to apply their political priors to complex systemic issues.
It’s why I’m glad to work in a newsroom where I have the flexibility to spend a few days digging into regulatory filings for a more-than-surface level dive into resource adequacy and how worried Nevadans should be about a California or Texas-size grid disaster happening next summer.
I think there’s real value in reporting on complex issues that is not only deep and accessible, but free to the general public. So while stories on utility regulatory filings aren’t going to get the same attention as a story on which players the Golden Knights have signed, there is a real public service in digging into these issues before they reach the catastrophe phase.
— Riley Snyder
Conine prepares Stablecoin bill, says it’s not related to Innovation Zone run on Stablecoin
Treasurer Zach Conine wants to prepare Nevada government agencies to accept the cryptocurrency Stablecoin as payment — although he insists his bill on the subject is unrelated to Blockchains LLC’s well-publicized proposal to create an entire “Innovation Zone” that secedes from the surrounding county and brings in tax revenue through a Stablecoin product.
Conine discussed the concept on Wednesday as SB39 at a hearing in the Senate Committee on Government Affairs, where he fielded a question about the polarizing Innovation Zone concept.
“The way I'm interpreting this bill is that it is connected to this innovation city. And this is a foundational piece for it to work,” said Democratic Sen. Dina Neal.
“It's not connected,” Conine retorted. “So the ability for us to take payment in the form of Stablecoins — and Innovation Zones, at least to the extent that I understand them — have nothing to do with each other.”
Stablecoin is a type of cryptocurrency that is tied to a reference point such as the U.S. dollar, in contrast to cryptocurrencies such as Bitcoin that don’t have such a peg and are much more volatile. Conine’s bill authorizes government entities to accept Stablecoins as payment in government transactions, just like they can accept credit cards.
“Now one of the reasons we want to put it into statute versus, say, just doing it in the same way that we don't necessarily contract a new piece of statute when we do PayPal or Zelle or something like that, is because we want companies to know that Nevada is open for business, to try and attract businesses that do this kind of thing to try it here,” Conine said.
Stablecoin operators, like credit card companies, can charge a fee for transactions using their Stablecoin. Blockchains LLC envisions creating its own Stablecoin to power “Painted Rock Smart City” and also be circulated well beyond the semi-autonomous Innovation Zone, according to a draft presentation of the proposal obtained by The Nevada Independent.
“In today's connected world, technology changes rapidly and government is often the last to keep up,” Conine said. “Senate Bill 39 presents an opportunity for the state to not only keep up, but to forge a path ahead.”
— Michelle Rindels
Utility regulators seek update to fining powers largely unchanged for four decades
Last year, the California Public Utilities Commission assessed a $200 million fine against Pacific Gas & Electric Company for its role in the deadly 2018 Camp Fire that left 85 people dead.
But if a similar tragedy happened in Nevada, caused by negligence by one of the state’s utility companies, the Nevada Public Utilities Commission would likely only be able to assess a much smaller fine — somewhere in the ballpark of $100,000.
That’s the reason the PUC filed SB18, which was heard Thursday in the Senate Committee on Growth and Infrastructure. PUC officers said that updating the fine amounts (many of which were set up to 40 years ago and never updated) would give the regulatory body the ability to levy fines that would be more than a flesh wound to the massive, investor-owned utilities like NV Energy or Southwest Gas that the commission currently oversees.
“Ultimately, the purpose of this bill is to empower the PUCN to impose fines that are concerning to those companies,” PUC Executive Director Stephanie Mullen said during the hearing. “We don't want the maximum fine amount to be something that they're comfortable paying, nor do we want the fine framework to be so prescriptive that it allows for companies to engage in a cost benefit analysis as to whether it makes business sense to comply with the law.”
For violations of rules and laws covering natural gas storage facilities and pipelines, the legislation (per a proposed PUC-backed amendment) would raise the fine amounts from up to $1,000 per day to $200,000 per day, with a maximum fine set at $2 million (previously set at $200,000). PUC General Counsel Garrett Weir said those amounts were in line with existing federal standards.
The bill would also create an administrative fine category — anyone who provides the PUC information which is “inaccurate or misleading and which the person knew or should have known was inaccurate or misleading.” Doing that, or violating any rulings or orders of the PUC, could now be punishable by a fine of up to $100,000 per day (up from $1,000) and a top-line limit of $10 million (up from $100,000).
It would also raise the fine amount for the unusual crime of operating a public utility without first obtaining a certificate of public convenience (or failing to file a report required by the Commission) from a modest $500 penalty to a maximum fine of no more than $50,000.
Fines are remitted to the state’s general budget account and not kept by the PUC.
A cadre of business organization and utility representatives — Southwest Gas, Nevada Resort Association, Nevada Taxpayers Association, Vegas Chamber — testified against the bill, with a general concern that the fines were being raised too much. A lobbyist for NV Energy testified in neutral, saying that the utility agreed the fines should be raised but thought they should be tied to inflation rates.
Weir said the commission was willing to work on adjusting the administrative fine scale, but he noted existing law requires the PUC to consider the appropriateness of the fine to the size of the business and other mitigating factors. A larger fine maximum would give the PUC more flexibility in punishing bad, but not the worst, behavior.
“I think the commission struggles with determining what to fine an offense where, say, $100,000 is the maximum, is appropriate, but you don't want to send a message that that's an egregious violation, as something where there's loss of life, or some sort of terrible outcome,” Weir said. “So it's really a struggle. You hope to have that larger range to assess an adequate penalty when something is bad, but not the worst possible type of violation.”
— Riley Snyder
Advocates seeking more compensation for those wrongfully convicted
Public defenders and criminal justice advocates are concerned that a bill to revise the law on compensation for wrongful convictions does not include provisions accounting for the time that a person spends behind bars prior to their conviction.
“As the bill is drafted, it says you would receive compensation only after the time you were wrongfully convicted,” John Piro, of the Clark County public defender’s office, said during a legislative hearing on Friday. “However, there is time that you spend in jail waiting for your case to go to trial, and those are years of your life that you lose, as well.”
Assembly Judiciary Committee Chairman Steve Yeager (D-Las Vegas), primary sponsor of the bill (AB104), said he thinks opposition for the bill comes from a good place and that he would “probably love to give even more compensation” to those who have been wrongfully convicted. But he also said he was unsure of the proposals from those opposing the bill as it stands.
“The request really is to compensate folks for pre-conviction incarceration,” Yeager said during the meeting. “And as many of you know, people are incarcerated, right or wrong, they're incarcerated all the time before they get to trial. And right now, if you're incarcerated before you get to trial, and you go to trial, and a jury acquits you, the state doesn't compensate you for that time.”
Nobody testified in support of the bill during the hearing. Yeager said that he would continue to work out issues with the legislation before taking it to a committee vote.
The proposed measure builds off of another bill from 2019, AB267, that makes Nevada one of 35 states allowing people who were wrongfully convicted to collect payment from the state as compensation for the time they lost while behind bars.
Mentoring panel championed by Tyrone Thompson may be spared in commission clean-up
A bill proposed by the Nevada Department of Education would revise and abolish commissions and advisory councils that are no longer in use, inefficient or have overlapping duties, but there is a chance that some on the chopping block — such as the Commission on Mentoring — could be spared.
State Superintendent Jhone Ebert presented the bill, SB76, to the Senate Education Committee on Wednesday. It states that the duties of the proposed-to-be abolished commissions, councils, and training programs would be transferred to the Department of Education.
The department hopes that eliminating the committees would make the agency more efficient, as it is difficult to recruit to fill seats on the panels and meet quorum. Abolishing the committees would not get rid of the work the department already does in those topic areas, Ebert said.
The Nevada Commission on Mentoring (NCOM), established by the late Democratic Assemblyman Tyrone Thompson, was on the list of being abolished, but Ebert said that the bill would be amended to keep it because it is the only place in state law that details mentoring issues in the education landscape. The bill language is expected to be changed so the mentoring commission remains in statute, but the Department of Education would not be providing the administrative support, which allows the commission to operate independently.
Karl Catarata, a youth commissioner in the Commission on Mentoring, commented in support of amending the bill. He said his experience with the commission has come “full circle,” as he was mentored by Thompson and he is now part of the commission.
“I hope that you all consider keeping the state entity that regularly brings together mentoring leaders across our state and vote in the affirmative for the...amendment this session,” Catarata said. “The commission is always willing to work with you all on this committee and the Department of Education to continue successful mentoring outcomes, while being frugal and efficient about resources for our throughout the state.”
Some boards, commissions and councils currently set for elimination include the State Financial Literacy Advisory Council, the Commission on Educational Technology, the Council to Establish Academic Standards for Public Schools and the Statewide Council for the Coordination of the Regional Training Programs.
Sen. Roberta Lange (D-Las Vegas) suggested that the Education Committee should look at each commission that is proposed to be abolished and have a more in-depth discussion on whether to keep it or not.
— Jannelle Calderon
Bill would stave off court fees for more people facing eviction
Lawmakers are considering a bill that could help Nevadans facing eviction by simplifying a process to avoid court fees.
When someone is given an eviction notice, they must file a summary eviction notice with the court, which costs $71 in Clark County. During a legislative hearing on Friday of AB107, Bailey Bortolin, policy director for the Nevada Coalition of Legal Service Providers, said the fee can pose a hardship for those facing eviction.
“That's a real impediment if the reason that you're there is because you didn't have enough money to pay to pay your rent in the first place,” Bortolin said.
The state already has a law in place that allows Nevadans to waive the fees required to prosecute or defend a civil action, but Bortolin said that that law is inadequate.
“By and large, our fee waiver system allows many people, thousands of people, every year to proceed, but it's not specific in who that should apply to,” Bortolin said. “And so what we've found is really just inconsistent results across the state.”
The bill would expand and broaden the qualifications for who can apply to have their fees waived, including any client of a legal aid program, any recipient of a state or federal program for public assistance, or anyone who “has expenses for the necessities of life that exceed his or her income.”
Bortolin also noted that the courts would not bear the burden of waived fees and that the fees for the civil action filings would be paid by the legal aid providers in the state.
Criminal justice advocates noted during the hearing that the bill would make it easier to dispute evictions at a time when many Nevadans are struggling financially.
“Poverty should never be punished by forcing unequal access to justice,” Liz Davenport of the ACLU of Nevada said during the meeting. “Existing law does not provide Nevada's courts a clear and objective standard for granting fee waivers and further does not provide an applicant with clear guidance.”
The Assembly Republicans revealed their 2021 legislative priorities on Thursday. The caucus has also said its official position is that the 2020 election, where Republicans picked up three Assembly seats, was not “fraudulent.”
Nevada Attorney General Aaron Ford’s office is backing a bill to ban no-knock warrants, made infamous through the police killing of 26-year-old Breonna Taylor.
The federal government requires them. Standard confidentiality clauses.
The agreements are rarely discussed. But they are central to SB77, a proposed state Senate bill that could exempt certain pre-decisional meetings and records involving environmental issues from the Open Meeting Law and Public Records Act. Eureka County, a main proponent of the bill, has argued a change is needed to comply with both the federal agreements and state law.
April Corbin Girnus wrote an excellent piece about the issue for the Nevada Current: Right now, counties are often hampered by confidentiality rules. To discuss issues, they are stuck between following (or breaking) the federal confidentiality agreements and the state’s transparency laws.
But open government advocates have argued that the proposed bill would limit transparency in a process that has real-world consequences — whether mines are approved or power lines are erected. Ahead of a recent hearing, a coalition representing environmental groups, civil liberty advocates and news organizations, sent an opposition letter that’s worth reading (here’s a link).
It is worth noting, too, that Eureka County’s natural resource manager, Jake Tibbitts, said the county opposes changes to the Public Records Act, and he is working to amend the drafted bill.
“If this were to move forward, we're totally open to stripping out all of that,” he said.
What struck me was why this bill was proposed in the first place. When the legislation was floated last fall, it was the first time I had heard of these federal confidentiality agreements. Given the federal government’s large role in permitting projects, they struck me as significant.
Before I get into that, some incredibly technical (but important!) background:
Every year, dozens of local governments, tribes and state agencies participate in what is known as the NEPA process. NEPA stands for the National Environmental Policy Act. A lot can be said about it, but for now, the most important thing is that it requires federal agencies to analyze the environmental consequences of projects on federal land — and the outcome is significant.
Nevada is about 85 percent federal land, so there are a lot of NEPA proceedings happening at any given time — and in many different corners of the state. When a federal agency starts the NEPA process, they invite local and state agencies to act as “cooperating agencies” during the crafting of an environmental analysis. It allows local and state agencies to convey opinions in an otherwise federal process. But there’s a downside: This is where confidentiality comes in.
These cooperating agencies — Churchill County or the Nevada Department of Transportation, for instance — must sign agreements with federal land managers, like the U.S. Bureau of Land Management (BLM). But the agreements, a BLM spokesperson said, include standard language about confidentiality to prevent the “release of predecisional information or working documents.”
That puts a jurisdiction like Eureka County, an entity governed by three county commissioners, in a tough position. The county, at the center of the state’s gold mining activity, wants to have a say in the process for analyzing environmental impacts. To participate, they must agree to keep information confidential. At the same time, the Open Meeting Law requires that elected officials deliberate in public. But if they deliberate in public, they risk breaking the confidentiality clause.
In 2009, the BLM chastised the county for doing just that: The Eureka Sentinel disclosed a report that showed pumping associated with a controversial molybdenum mine would have big effects on water. The disclosure suggested that the county broke its confidentiality agreement.
To avoid the issue, Tibbitts or one county commissioner typically represents the views of the county in the NEPA process. But state law limits their discussions with other elected officials.
“It's been a whole struggle for me the whole time I've been here,” Tibbitts said.
This is especially a problem in rural counties that have small staffs or lack departments devoted to natural resources issues. Instead, a single county commissioner might take the lead in representing a county’s interests without being able to deliberate with their colleagues.
But is Open Meeting Law the best venue by which to address the issue? That’s another question.
Open government advocates and environmentalists say no. They argue that a federal fix to the confidentiality language, stemming from the “deliberative process exemption,” might be needed.
“The answer isn’t less transparency,” said Patrick Donnelly, the state director for the Center for Biological Diversity. “The answer is more transparency. Let’s not make things worse.”
Donnelly sees SB77, as written, fitting into efforts to weaken state law around open government.
He is also watching AB39, an Assembly bill that would exempt agencies from disclosing their deliberations prior to making a decision. Such a move would make it harder for the public to understand the interagency process, and in some cases the science, informing decisions.
“It would eliminate transparency,” he said. “Most public records requests I've ever done, which have resulted in important finds for our conservation campaigns, would have been exempted.”
Here’s what else I’m watching this week:
The Clark County Commission meeting. Yes, I’m aware that everyone tuned into the Clark County meeting on Tuesday for a different item: To watch the commissioners vote to change the name of the Las Vegas airport, currently dedicated to former Sen. Pat McCarran, a virulent and well-documented bigot. Now, with the FAA’s approval, it will be named for one former Sen. Harry Mason Reid. But all that to say, there was another big item on Tuesday’s commission agenda:
The Clark County Commission gave its unanimous approval to a climate action plan (here’s a link to the plan). It’s a major step for the state’s largest local government. With the majority of Nevada’s population, Clark County could play a key role in planning for more extreme heat and drought. “The impacts of climate change are very real and they are upon us,” commission Chairman Marilyn Kirkpatrick said Tuesday. “As a county set in the Mojave Desert, we know what’s at stake with our water and energy supply and intensifying heat island impacts. This plan recognizes those unique challenges.”
“First-hand experience:” Assembly Speaker Jason Frierson cited “Nevada’s diverse population and first-hand experience in issues relating to climate change, public lands, immigration and health care” as reasons why we have “a unique voice that deserves to be heard first” in nominating presidential candidates. Why we aren’t already first? I don’t know. POLITICO’s Tyler Pager and David Siders have more on that.
Natural gas in the Legislature: Gov. Steve Sisolak’s climate strategy recognized the need to transition away from natural gas to meet a goal of reducing total greenhouse gas emissions to net-zero by 2050. As I’ve written about before, this issue is coming to Carson City. Earlier this month, Assemblywoman Lesley Cohen (D-Henderson) wrote an opinion piece for The Nevada Independent about why she is proposing legislation that would require gas utilities to undergo a more rigorous regulatory process when building new infrastructure. The bill would also require that state utility regulators study natural gas in the context of the state’s climate goals. Nevada’s largest gas utility, Southwest Gas, responded to the op-ed on Nevada Newsmakers last week.
The natural gas PR-person Nextdoor: Mother Jonesclimate reporter Rebecca Leber digs into the tactics that the fossil fuel industry is using to influence customers to believe that natural gas stoves are preferable to electric stoves. The story includes an example from California, where an employee for a PR firm logged onto Nextdoor to stir up opposition to an electrification effort. Spoiler: There are Instagram influencers too. The reporting provides context for how the natural gas industry is doubling down on past efforts to sell gas stoves amid efforts to reduce fossil fuel use to combat climate change and a growing recognition of the health problems caused by indoor air pollution.
Texas, the electric grid, and climate change: The L.A Times’ Sammy Roth writes that “for all the differences between the events in Texas and California’s more limited rolling blackouts last year, there’s a common lesson: Extreme weather events are becoming more frequent and more severe as the climate crisis worsens. And the U.S. power grid is not prepared to handle the hotter heat storms, more frigid cold snaps and stronger hurricanes of a changing planet.”
Shout it from the rooftop: You can’t build a new city without water. When I heard Gov. Steve Sisolak tout Blockchains LLC in his State of the State — with the words “smart city” — I could not help but ask about the water. We started digging, and what we found was that Blockchains, a big donor to politicians (and The Nevada Independent), wants to pipe water from rural Nevada. It scooped up water rights in northern Washoe County for more than $30 million and has also looked elsewhere, including in Humboldt County. The big takeaway here: Development of any sort, though especially a new city, is a question of natural resources as much as anything else.
Rancher sues BLM over lithium mine: A Northern Nevada rancher is suing the U.S. Bureau of Land Management over the Trump administration’s approval of the Thacker Pass lithium mine north of Winnemucca. The lawsuit alleges that the land agency’s approval, in the final days of the administration, violated environmental laws, the Sierra Nevada Ally’s Scott King writes.
Judge rules against lifting mining moratorium: “A federal judge on Thursday overturned a Trump administration action that allowed mining and other development on 10 million acres (4 million hectares) in parts of six western states that are considered important for the survival of a struggling bird species,” Matthew Brown reported for the Associated Press last week. A District Court judge ordered the Bureau of Land Management to reconsider the Trump administration’s decision, which did not fully consider how it would affect the imperiled Greater sage grouse.
The commission to study water law: A few weeks ago, we reported that Supreme Court Chief Justice James Hardesty planned to empanel a commission to study how water law is viewed in the judicial system and examine whether to create specialty water courts. An order requesting the creation of such a commission is now online, and a public hearing is scheduled for March 3.
Reno attorneys fined in Swan Lake flooding lawsuit: A Washoe County District Court judge fined City of Reno attorneys “$1,500 for failing to admit to facts in the Swan Lake flood case filed by Lemmon Valley residents,” Bob Conrad reported for This is Reno. “The sanction is on top of awarding more than $750,000 in damages to plaintiffs in the case. The award does not include attorney fees, which could double the amount owed to plaintiffs and attorneys.”
Contact tracing in wastewater: “Findings from wastewater testing suggest the U.K. variant of the coronavirus is circulating in Southern Nevada, according to one UNLV researcher, but the prevalence of the more contagious variant is unclear,” theReview-Journal’s Blake Apgar writes.
Boost in outdoor activities: The Nevada Department of Wildlife (NDOW) saw a jump in hunting and fishing license sales during the pandemic — and 2021 is expected to be better, Sudhiti Naskar reports for This is Reno. Our reporter Tabitha Mueller broke down the numbers in our legislative newsletter (you should sign up to receive it). “If there is a silver lining, it's in people's turning to nature for mental health, or physical health," NDOW Director Tony Wasley said in January.
Update: This story was corrected at 9:09 a.m. on Thursday, Feb. 18 to indicate that NEPA stands for the National Environmental Policy Act, not the Nevada Environmental Policy Act, as an earlier draft stated.
State utility regulators have agreed to assess a nearly six-figure fine against Southwest Gas after discovering the natural gas company had ignored a previous directive and attempted to finance the cost of replacement equipment through higher rates on its customers.
The Public Utilities Commission voted unanimously on Wednesday to approve a $94,000 fine against Southwest Gas after commission staff discovered that the company had sought to include the cost of a replacement backhoe destroyed in a 2016 gas leak and explosion in its proposed rates to customers.
The natural gas leak and explosion — caused by a Southwest Gas construction crew hitting a natural gas pipeline — was deemed by the PUC to be the most significant pipeline-related accident in the state since 2010, causing more than 3,000 homes to lose service and 30 homes to be evacuated. The commission and the company reached an initial settlement in 2017 that required Southwest Gas to pay a $300,000 civil penalty and included an order to not pay for a replacement backhoe destroyed in the explosion through rates charged to the utility’s customers.
But PUC staff discovered during the company’s 2018 general rate case that the cost of the replacement backhoe was not removed from the gas utility’s proposed rates. The $94,000 fine was computed based on the maximum $1,000 per-day fine over the 94 days that elapsed between the initial general rate case filing and the filing of a corrected version.
Attorneys for Southwest Gas opposed the fine, saying that inclusion of the cost for a replacement backhoe was an “administrative error” that was caught before any customers had to pay for the replacement equipment through their rates. But in their order approving the fine, members of the Commission wrote that the size of the fine was appropriate and that it wasn’t clear that the replacement costs would have been removed sans intervention by PUC staff.
“The Commission rejects any insinuation by Southwest Gas that staff’s intervention in Southwest Gas’s failure to comply with a Commission order somehow absolves Southwest Gas from the repercussions of violating not only the Commision order, but the stipulated agreement to which it was a signatory,” commissioners wrote in the order.
The order requires the administrative fine to be paid within 60 days.
Nevada’s long-standing system for setting and regulating the price of electricity is likely to be substantially overhauled in the form of a bill that’s gathered little public attention but could have major implications for NV Energy and its customers.
In its first hearing since lawmakers adopted a substantial amendment entirely replacing the original version of SB300, bill sponsor Democratic Sen. Chris Brooks told members of the Assembly Growth and Infrastructure Committee on Thursday that the measure was an attempt to align the business structure of NV Energy with new renewable mandates and technologies.
If approved, the measure would authorize the Public Utilities Commission to adopt regulations allowing for “alternative” ratemaking — a slew of mechanisms and triggers that automatically adjust rates based on performance and other metrics, and could possibly end the normal three-year cycle for the setting and adjustment of rates.
Although lawmakers asked few questions on the bill during the hearing, such a change would have a major effect on the business model of NV Energy, the state’s largest utility, as well as the structure of power bills paid by every resident and nearly every business in the state. Brooks said the measure was brought forward in light of bills passed by the Legislature raising the state’s Renewable Portfolio Standard and other requirements such as energy efficiency or storage that didn’t necessarily fit nicely into the traditional operating model and financial structure of electric utilities.
“We end up coming to odds with our policy initiatives and their business model as defined in current statute,” he said during the hearing. “So ultimately, we must look for ways to redesign the business model of utilities.”
Historically, electric rates are set based on a utility’s cost of service, a formula that spits out rates for utility customers after determining costs — everything from taxes, operations and depreciation of power plants — plus an authorized rate of return for shareholders (9.7 percent in 2017 for NV Energy). In Nevada, rates are set every three years in a general rate case held by the Public Utilities Commission.
But several states have opted to move away from normal ratemaking procedures to use such alternative ratemaking mechanisms, aimed at improving the “mixed incentives” that utilities face under the normally costly and lengthy ratemaking process. That process can lead utilities to face significant regulatory “lag” that drifts their actual earnings either above or below what is authorized by regulators. Such a “lag” results in either the utility operating at a loss or to customers paying more for electricity than they should.
Although there are various types of ratemaking “tools” identified in the bill, Brooks said the intent was to allow the commission to set up a structure where new technologies — such as energy storage, electric vehicle infrastructure, or distributed generation in the form of rooftop solar — could be baked into the utility’s rate structure.
“These are all the future of energy in Nevada,” he said. “The future is coming fast, and we are obligated to embrace it.”
As written, the bill requires the Public Utilities Commission to draft regulations setting a framework for alternative ratemaking tools, tying them to nine public policy goals identified by the Legislature, including rate stability, renewable energy development, electrical grid efficiency and security and ensuring customers benefit from lower administrative costs.
From there, the bill lays out a process wherein electric utilities (NV Energy) can file an application for the alternative ratemaking plan, which must be approved within 210 days by the commission and include one consumer session. The regulatory body has the ability to deny the application based on if the application is in the public interest, results in “just and reasonable” rates and protects consumers.
The bill also allows any such alternative ratemaking plan to waive or extend the requirement that a rate case is held every three years.
The change to the rate-making process was lauded by NV Energy lobbyist Tony Sanchez, who said the bill establishes a “framework for reform” that would allow the utility to better align itself with services desired by customers.
“With this type of flexibility, the commission can act nimbly; it can anticipate, rather than react to, changes and adopt plans that deliver value to electric customers, whether that value comes in the form of enhanced customer service, new pricing plans or more renewable energy,” he said.
Garrett Weir, the general counsel of the PUC, said the regulatory body was neutral on the bill but that the prospect of alternatives to traditional ratemaking could bring benefits for both the utility and its customers.
“Traditional cost of service regulation rewards utilities for investing in large capital-intensive projects, projects that may be less needed as renewable energy and distributed energy resources become more prevalent, available and affordable,” he said. “But traditional cost of service regulation also does not always promote consumer-centered choices by the utility.”
The bill presented by Brooks on Thursday contained several changes from the version approved unanimously by the Senate last month. It would require the commission to consider requiring a cost-of-service study and the difference in rates under a normal rate application and the alternative rate application as part of any approved alternative ratemaking application.
It also changes language requiring any benefits from the change in ratemaking go to all customers, not just fully-bundled — an inclusion that affects the large businesses and casinos that have left the utility’s electric service but still use it for transmission services.
Notably, the amendment would also repeal a section of state law approved in 2017 requiring the PUC to open an investigatory docket aimed at determining what impact, if any, net metering for rooftop solar has on the rates charged to other customers. That law set an initial 2020 deadline for the report, and the commission yet to create it.
Brooks said that section of law was included as a compromise in the bill passed last session and that there was broad agreement that the current net metering system was working, so no study was needed.
“We’re here to say that it worked out really well, and there doesn’t seem to be a lot of desire or need to do that study now,” he said.
Brooks also said an amendment submitted by Southwest Gas that would also apply the bill’s provisions to gas utilities wasn’t welcome.
“This is very narrowly tailored to an electric utility, and just not the appropriate vehicle for that concept,” he said. “And while I do support the concept that they’re trying to achieve, I just don’t want it in this bill.”
The bill does not require any specific ratemaking mechanisms to be adopted by the commission, but gives several definitions of potential programs or tools that can be used by the commission, including:
Performance-based rates, which are set or adjusted based on certain performance metrics such as service outages, employee safety or customer service set by a public utilities commission
Formula rates, which use a pre-specified formula to automatically adjust rates to keep a utility’s rate of return at or near its authorized profit margins, with periodic reviews
Multi-year rate plans, which would allow for rate cases beyond three year periods with built in rate adjustments based on factors such as inflation or capital investments which wouldn’t require a full rate case
Subscription pricing, which creates a special set subscription rate for electric customers based on a fee — and can include other conditions
An earnings sharing mechanism, which would require the utility to share earnings with customers above a specific percentage of return on equity
A decoupling mechanism, which separates a utility’s financial performance and results from the sales of electricity — designed to encourage energy efficiency and remove incentives to increase sales
It’s no secret that Nevada energy companies — especially the state’s largest utility, NV Energy — are ready and willing to spend their money on state elections. The 2018 midterms were no different, as 36 companies and individuals combined to spend more than $497,000 on 59 state lawmakers.
Top contributors were led — once again — by monopoly utility NV Energy, which spent $215,000 on 56 legislators, good for nearly half of all energy-related contributions and more than 35 percent more than it spent in 2016. NV Energy also spent an additional $100,000 on a number of PACs and party organizations, of which most were aligned with legislative Democrats.
Overall, the total donated during 2018 marks a marginal rise in contributions from the industry compared to 2016, when energy companies spent $493,000, or a difference of about 0.8 percent.
The 2018 elections came at a time of relative turmoil for energy policy in Nevada, as growing calls for renewables coincided with a mass exit of major corporations — including major casinos and the Raiders Stadium — from NV Energy’s customer base and a ballot effort seeking to unravel the company’s energy monopoly.
It was followed distantly by Southwest Gas ($100,500), renewable energy company Ormat Technologies ($50,500), Sempra Energy ($33,000) and the rural electric cooperative Valley Electric Association ($28,600).
However, this analysis only captures money contributed directly to a lawmaker’s campaign, money that’s capped to $10,000 per legislator per election cycle. Many companies looking to spend more on a given race will circumvent limits by donating through subsidiaries or donating large sums to political action committees (PACs) or party committees, while some will do both — making it difficult to track exactly where thousands of dollars in corporate campaign contributions have ended up.
For instance, since 2017 NV Energy has spent heavily on a number of PACs and party organizations, including giving $60,000 to the state Democratic Party, another $10,000 each to the Democrats’ Assembly and Senate caucuses and $30,000 to the Las Vegas Metro Chamber of Commerce’s BizPAC committee.
The utility also gave $10,000 to the Nevada Mining Association PAC and $5,000 each to Gov. Steve Sisolak’s Sandstone PAC and Winning PAC, a committee linked to Democratic Sen. Yvanna Cancela.
Those PACs and party organizations combined for more than $100,000 in aforementioned additional campaign spending by NV Energy not accounted for in the 2018 campaign spending totals — totals that also don’t include roughly $30 million the company spent to defeat the contentious Energy Choice Initiative.
As a whole, energy contributions in 2018 went largely to legislative Democrats — who control roughly two-thirds of the 63 seats in the legislature — with $358,300 to the Republicans’ $139,250. When broken down by average contribution, Democratic lawmakers still received slightly more, $1,206 compared to $1,132 for Republicans, a difference of about 7 percent.
Among individual legislators, Democratic Assembly Speaker Jason Frierson received the most with $40,500 from 12 energy-related contributors. He was followed by former Senate Majority Leader Kelvin Atkinson ($36,250), Sen. Chris Brooks ($28,500), Republican Senate Minority Leader James Settelmeyer ($25,750) and Democratic Assemblyman Steve Yeager ($17,750).
Only the four lawmakers appointed before a freeze on campaign contributions during the legislative session took effect in January received no money from the energy industry. That list includes Sen. Dallas Harris, Assemblywoman Bea Duran and Assemblywoman Rochelle Nguyen, all Democrats; and Republican Assemblyman Gregory Hafen.
Two legislators, Sen. Martha Washington and Assemblyman Greg Smith, both Democrats, were appointed after the session began and, because of the fundraising freeze, have not yet received any campaign contributions.
Comparing fundraising between each legislative chamber, members of the 42-member Assembly received slightly more than their Senate counterparts, $280,550 to $217,000. On average, it meant that per-donation the 21 senators took in $1,299 to the Assembly’s $1,108, or a difference of about 17 percent.
As always, we’ve triple checked the math. But if anything looks off, feel free to contact us at email@example.com.