NV Energy's wildfire mitigation plan is extensive—and expensive, according to Public Utilities Commission of Nevada staff and consumer advocates who met with the utility this week to discuss the details of its Natural Disaster Protection Plan.
NV Energy submitted the plan to the PUCN Feb. 28, with a $346-million price tag attached for associated costs between 2020 and 2023 [20-02031] (see CEM No. 1580). In a June 2019 filing, the company estimated that its plan would cost a much lower $25 million per year [19-06009].
"We were kind of shocked at the magnitude that was filed," PUCN Engineering Manager Paul Maguire said during a June 22 commission hearing on the plan. "Right out of the gate, they're proposing to spend $100 million-plus a year."
Jerry Mendl, president of energy consulting business MSB Energy Associates, in May 28 testimony provided for the Bureau of Consumer Protection said the PUCN should defer at least $230 million of the plan's proposed "spending spree" for future consideration in light of the economic uncertainty brought about by the coronavirus pandemic and NV Energy's revenue levels. The commission should judge what is reasonable and prudent in light of these conditions, Mendl said during the June 22 hearing.
NV Energy's plan was submitted in response to the 2019 passage of SB 329, which directed regulated utilities to develop a "cost effective, prudent and reasonable" natural disaster response procedure and submit it to the PUCN before June 1. The legislation also allows utilities to recover costs associated with their plans in a separate monthly rate added to customer bills.
Commissioners also heard from BCP Regulatory Manager David Chairez, who in June 16 testimony said NV Energy should calculate separate recovery rates based on costs incurred by its utility subsidiaries Nevada Power in southern Nevada and Sierra Pacific Power in the northern part of the state, based on language in Subsection 6 of Nevada Revised Statute 704.7983.
Echoing Chairez, commission staff recommended a methodology that calculates costs based on the service territory in which they are incurred. PUCN economist Cristina Zuniga recommended the commission reject NV Energy's cost-recovery design, which proposes a single flat rate per kilowatt-hour spread evenly across all customers. Zuniga in May 28 testimony said the utility's proposal "is less a cost sharing mechanism and more of a cost shifting mechanism," as it shifts over $5 million in costs from Sierra Pacific Power's service territory onto Nevada Power customers. Chairez alleged that NV Energy provided no factual reason for shifting the costs.
Nevada's fire season is already off to an active start, Nevada Fire Warden Kacey KC said during a June 3 Fire Season Outlook conference. State officials are expecting a much more active season this year relative to 2019, "with fires that are showing extreme fire behavior for this early in the fire season," she said. A dry winter, drought conditions and record-setting high temperatures have created a higher-than-normal wildfire risk across Nevada, National Weather Service meteorologist Chris Smallcomb said at the conference.
Also in Nevada, Gov. Steve Sisolak on June 22 unveiled an initiative aimed at increasing the number of low- and zero-emission vehicles sold in the state beginning in 2024. The Clean Cars Nevada initiative directs the Nevada Division of Environmental Protection to start a rulemaking process to evaluate the adoption of standards to increase consumer choice for ZEVs at state dealerships and to develop emissions standards for vehicles sold in Nevada.
NDEP will collect public input and engage stakeholders through 2021, according to the news release, before submitting regulations for adoption by the State Environmental Commission and the Legislative Commission.
"Transportation is the number one source of greenhouse gases in Nevada, and therefore a top priority for addressing climate change statewide," Bradley Crowell, director of the Nevada Department of Conservation and Natural Resources, said in a June 22 news release. "Establishing new Clean Car Standards will help address the harmful impacts of climate change stemming from vehicle tailpipe pollution, while simultaneously advancing a stronger, more resilient economy for Nevada."
Nevada would become the newest member of the "Nation's Clean Car Promise," an initiative of the U.S. Climate Alliance, which includes a bipartisan coalition of 24 governors whose states have adopted clean-car standards. Sisolak in 2019 signed into law SB 254 which established statewide GHG-reduction targets of 28 percent by 2025 and 45 percent by 2030, relative to 2005 levels.
Susan Nedell of Environmental Entrepreneurs praised the clean-car initiative for providing job support to the clean-energy industry during the pandemic. "Over 1,500 Nevadans working in clean vehicle or storage technologies have lost their jobs since March, and more could be threatened in the months ahead. By joining more than a dozen other states in adopting these standards, Nevada can provide the certainty critical for an industry that already supports local workers, keeps more money in Nevada families' and businesses' wallets, and has the ability to quickly create thousands of new jobs the state will need during recovery," she said in a separate June 22 release.