Nevada governor vetoes plan to expand renewable portfolio standard

Source: Benjamin Storrow, E&E News reporter • Posted: Wednesday, June 21, 2017

Nevada Gov. Brian Sandoval (R) exercised his veto pen to strike down a community solar bill and a plan to boost the Silver State’s renewable portfolio standard (RPS) to 40 percent by 2030.

The move brought to an abrupt halt a stunning winning streak by greens in Carson City, where lawmakers this year passed 11 energy bills aimed at bolstering renewables, electric vehicles and energy storage, among other measures. Sandoval signed nine of those into law.

Sandoval said the solar bill would give community-sized developments an unfair advantage against utility-scale projects, saying local solar gardens would not be subject to regulations that govern power companies. He vetoed the bills on Friday.

The outcome of the 2018 ballot question on whether to deregulate the state’s power market also played a factor in Sandoval’s decision.

The legislation calls on NV Energy, which now serves 90 percent of the state, to buy any unsubscribed community solar credits. It’s not clear who would be responsible for those credits in a competitive market, the governor said.

The governor’s rejection of A.B. 206, which called for increasing the RPS from 25 percent by 2025, represented a particularly bitter pill for greens. Along with a bill to restore net metering, it was perhaps the most high-profile energy bill considered this year.

“Our goal this session was to shift Nevada away from a boom-and-bust economy and toward a more prosperous future,” said Assemblyman Chris Brooks, a Democrat who authored the legislation. “A.B. 206 would have made Nevada not just a national leader, but a world leader in the next generation of clean and renewable energy sources that would have diversified our economy and created good-paying, high-quality jobs.”

The Sierra Club’s Elspeth DiMarzio said, “The governor’s veto of A.B. 206 denies the support we have seen from Nevada voters, the bipartisan efforts in the Nevada Legislature, the faith community, and the endorsements of a range of businesses, including eBay, MGM Resorts and Zappos.”

Sandoval, in a veto message, lauded the goals of A.B. 206 but questioned the timing. Increasing the RPS could leave ratepayers saddled with higher electric bills at a time when the power sector is already changing at a rapid pace, he argued. The 2018 ballot question also loomed large.

New entrants to the state’s power market would be subject to the enhanced renewables’ requirements and would likely impose charges to pay for NV Energy’s stranded assets, Sandoval said.

“Nevada will be the nation’s leader in clean and renewable energy generation development,” the governor wrote. “On the path to this goal, however, decisions must be responsibly informed with research, study and debate, particularly with the likelihood of the approval of energy choice in Nevada next year.”

Greens questioned that assessment. Where the governor assumes new solar development related to the RPS to be a burden on the system, it would actually be a source of low-cost power, particularly due to the federal investment tax credit, said Dylan Sullivan, a senior scientist with the Natural Resources Defense Council.

Stranded cost concerns are similarly unfounded, Sullivan said. The governor appears to be worried that increasing the RPS would devalue NV Energy’s natural gas plants in the eyes of potential buyers, who would enter the state in the event Nevada voters back deregulation. But the utility’s natural gas fleet will remain valuable because of its ability to ramp up and down to coincide with solar generation, he said.

The debate will likely be put on the back burner for the time being. Supporters of boosting the RPS have pledged to raise the issue again, but lawmakers won’t be back in Carson City until 2019 due to the biannual nature of the Legislature. By then, voters will have made a choice about the future of their power market.