Nev. weighs future of ‘failing’ renewable portfolio standard

Source: Elizabeth Harball, E&E reporter • Posted: Wednesday, June 8, 2016

Nevada is mulling the future of its law requiring that some of its energy come from renewables as members of a state task force assert that the measure is no longer driving construction of new wind, solar and other clean energy projects.

An advisory committee to Nevada’s New Energy Industry Task Force, reconvened this year by Gov. Brian Sandoval (R), met yesterday to discuss strengthening the state’s renewable portfolio standard or phasing it out. It could potentially be replaced by a policy that constrains how much fossil-fuel-fired generation is allowed in the state.

Nevada’s current renewable portfolio standard requires the state to get 25 percent of its energy from renewable sources by 2025. However, due to a glut of credits that top Nevada utility NV Energy has accumulated to meet the target, the law is no longer resulting in the construction of more renewable energy projects, according to analysis by the environmental group Western Resource Advocates.

“What we have is a credit tail wagging the renewable energy dog,” Robert Johnston, senior attorney with Western Resource Advocates and a member of the state’s technical advisory committee for clean energy sources, said during a May presentation to the committee.

“At its current levels and as it’s currently implemented, we think it is really failing its ultimate purpose,” Johnston said.

Kyle Davis, who leads the clean energy sources technical advisory committee, agrees. His committee proposed that the New Energy Industry Task Force recommend legislation requiring the state to adopt a renewable portfolio standard of 50 percent by 2040.

“Given the credit situation we find ourselves in right now, NV Energy will not need to contract for any new renewable energy until 2032 under current calculations,” Davis said in an interview.

Require more renewables or limit fossil fuels?

According to Davis, the target of 50 percent by 2040 was chosen so Nevada would be competitive with other states like California and Oregon, both of which have aggressive renewable requirements.

But the New Energy Industry Task Force, which recommends bills for consideration by the state Legislature, ultimately voted against this proposal at a meeting last month. Some task force members — including a representative from NV Energy — felt more data were needed to support the target, while others indicated they were no longer sure a renewable portfolio standard was the best way to encourage renewables.

“I agree with this spirit in which this recommendation is presented. My reservations have to do with continuing with the concept of RPS — I’m not sure that that particular mode of getting there has not outlived its useful purpose,” state Sen. Patricia Spearman (D) said before voting against the proposal as a member of the task force.

At yesterday’s meeting of the technical advisory committee for clean energy sources, members discussed an alternate proposal to constrain the amount of fossil-fuel-fired electricity generated in Nevada to 60 percent by 2026 and then to 50 percent by 2040.

“The RPS was established because renewables were new, renewables were questionable,” said committee member Josh Nordquist of Ormat Technologies Inc., a geothermal energy company in Reno. “They’ve come a long way. So the thought process was that since we now can trust renewables, we should turn our focus to fossil fuels and drive to reduce the use of fossil fuels in the state.”

That idea is in the early stages. Some of the committee members, including Johnston, raised concerns about the complications involved in integrating this law with the state’s current, complex renewable portfolio standard.

Others raised concerns about maintaining grid reliability and how the state’s power companies would accommodate less fossil-fuel-fired generation and more intermittent renewables on the system.

“Not all energy by fossil fuels is equal,” said committee member Anne-Marie Cuneo, director of regulatory operations with the Nevada Public Utilities Commission. “If you are forcing … the utility to not invest in combined-cycle [power plants] but instead invest in peaker plants, you could in fact be increasing emissions over the long run.”

Still talking about the Clean Power Plan

The clean energy technical advisory committee also discussed U.S. EPA’s Clean Power Plan at yesterday’s meeting. While the state Division of Environmental Protection stepped back from planning for the federal climate regulation following the Supreme Court stay, the committee is continuing to discuss how the state might comply with the rule.

Yesterday, the committee heard presentations on some of the more technical decisions the state will have to make if the Clean Power Plan is upheld, such as how it might allocate carbon allowances to energy generators under a carbon-trading system.

It’s generally accepted that Nevada is well-situated to meet EPA’s targets should the rule be upheld, Davis said in an interview.

A law the state enacted in 2013 means NV Energy will phase out much of the state’s coal-fired power before the Clean Power Plan compliance period ends in 2030. Under the federal rule, Nevada would have to reduce its emissions rate 22 percent from 2012 levels by 2030.

“With the business-as-usual approach, based on where the utility was planning on going, we were going to be very close to that anyway,” said Davis. “My guess is if we did something like adopt a 50 percent RPS, that would definitely get us past the goal.”

At yesterday’s meeting, Nordquist proposed looking at the Clean Power Plan as a “floor” for the state’s clean energy goals.

“Everything we can do above and beyond that will bring additional value in,” Nordquist said.