by Dana Gentry, Nevada Current
Assemblyman Howard Watts says NV Energy’s failure to adequately plan for the amount of energy resources it requires to maintain a reliable system is costing customers more, increasing reliance on fossil fuels, and is contrary to the state’s goal of producing half its energy from renewable sources by 2030, but may be increasing the utility’s bottom line.
“Whether by accident or design, the submission of so many amendments with so many changes in proposed resources points to flawed and fractured planning by the utility,” Watts wrote in comments filed last week with the Nevada Public Utilities Commission. “The state cannot afford to plan and procure from one crisis to the next without the opportunity to fully evaluate other, potentially more cost-effective and forward-thinking, alternatives.”
Watts notes that proposed amendments don’t receive the regulatory scrutiny of an integrated resource plan (IRP) “which has led a diverse group of participants in these dockets to believe that an underlying motive of the utility is to shift its resource procurement process out of the IRP and into amendments to increase the likelihood of approval, which then expands the company’s return on equity.”
Watts asks regulators to “proceed with caution” on NV Energy’s fifth and latest amendment to its 2021 integrated resource plan that calls for about $2 billion in additional investments – much of it in fossil fuels. He notes that lawmakers have heard from the public regarding the cost of electricity, and says it’s “critical the Commission take action to maximize affordability and greenhouse gas reduction” and “strengthen and re-integrate an IRP plan that is becoming increasing (sic) fractured.”
The PUC is scheduled to take up the amendment in January 2024, just months before NV Energy’s 2024 IRP is due.
“The entire purpose of the IRP is to develop a resource portfolio that is resilient and reduces the risk of expensive purchases to protect the reliability on the system,” Watts wrote to the PUC, adding that awareness of supply chain disruptions “has not changed much since 2021. If the analysis and resources in the IRP require major adjustments within three months rather than three years, this calls into question the integrity of NV Energy’s planning in the 2021 IRP.”
Watts is the sponsor of a measure that seeks to eliminate amendments to the IRP, which are not scrutinized to the extent of components included in IRPs.
He notes NV Energy began to deviate from its 2021 integrated resource plan, approved in early 2022, “almost immediately” noting the first amendment was filed 39 days after the IRP was approved, and included almost $260 million in power sources not contemplated just a month earlier. That was followed by two amendments “for additional investments” and a fourth amendment filed in November 2022 for additional assets totaling $1 billion. The fifth amendment, to be taken up in January 2024 – just months before NV Energy’s next three-year integration plan is to be filed, seeks $2.2 billion in assets.
“These amendments identify load and reliability risks not studied in the three-year IRP, and recommended resources not studied or identified in the full IRP,” Watts wrote.
Watts adds that in the fourth and fifth amendments, NV Energy has sought to increase its use of fossil fuels, as needed to remain reliable “even as spikes in the price of gas led to dramatic increases in energy costs for consumers. They do not promote the goals of a balanced energy supply, as we still use gas for roughly sixty percent of the state’s energy generation.”
He says the proposals are not in line with NV Energy’s “stated goal of moving to 100 percent clean energy and the state’s clearly stated policy to generate at least half of our energy from renewable sources” by 2023.
“By law, the amendment process for the Integrated Resource Plan allows for public participation and NV Energy looks forward to working with all stakeholders and interested parties in this robust process to determine the best outcome to provide sustainable, reliable and affordable energy to our customers,” the utility’s spokeswoman said in a statement.
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