NV Energy managed to convince Nevada lawmakers to toss them in the briar patch. Now power customers will be paying the tab.
According to news reports, the Public Utility Commission may allow the company to recoup up to $60 million a year over the next three years for the cost of shutting down perfectly good, acceptably clean coal-fired power plants.
Then the power company will have to build new power plants to replace the coal-fired capacity. Guess who will pay for those.
To cut its risks and cover its assets the NV Energy submitted Senate Bill 123 to the Legislature. The bill saddles ratepayers with every dime of the cost to mothball the coal plants — including any undepreciated balance, decommissioning and remediation, contract termination costs, even the value of any unused coal left lying around.
Dan Jacobsen of the attorney general’s Bureau of Consumer Protection, which represents ratepayer interests at the Public Utilities Commission, said at the time, “In addition to replacing about 1,000 megawatts of coal capacity, the bill also would be replacing a very large amount of power purchase agreements right now that ratepayers don’t have to provide a return on.”
NV Energy’s profits come from a rate of return on equity, which is currently about 10 percent, but the more equity in power plants and power lines the greater the return.
Jacobsen also said SB123 could deter the PUC’s ability to control costs. One part dictates the “Commission shall approve” costs, and another says emissions reduction “shall be deemed to be a prudent investment. The electric utility may recover all just and reasonable costs …”
Time to pay the tab.
And you can thank Harry Reid.