Editorial: Voters should dump a tax, add a tax and end a monopoly

Early voting in Nevada (R-J photo)

Early voting in Nevada (R-J photo)

Correction: Nevada no longer has some of the highest electricity rates in the West. According to the U.S. Energy Information Administration, as of August, only Idaho had lower residential rates than Nevada in the Mountain West states.

Nevada and many other states were well on the way to breaking up the electricity monopolies 15 years ago until the Enron market manipulation debacle that led to blackouts and price spikes scared lawmakers off. A free market was not the problem, it was criminal collusion and fraud.

Now, Nevadans have another chance to let free markets set the price of electricity instead of monopoly power companies and public utility regulators.

Question 3 on the statewide November ballot, if passed, would start the process of amending the state Constitution to prohibit granting electricity monopolies or exclusive franchises.

The argument for passage of Question 3 — the Energy Choice Initiative — points out that Nevada has some of the highest electricity rates in the West, this is partly due to the fact  electricity rates are dictated by the Public Utilities Commission, which by law must guarantee a profit for the monopoly utility companies. This is determined by setting a rate of return on equity, which incentivizes the power companies in the state to build expensive power plants when cheaper power might be available on the grid in an open and free market. There is no competitive pressure. There is little incentive to innovate.

Though the backers of Question 3 tout the potential of renewable energy development, the real benefit of passage is competition and innovation to achieve the most efficient and cost-effective power supply, whatever drives the generators.

Yes, Question 3 is supported by the large corporations and casinos who would benefit from buying cheaper electricity on the open market instead of from the monopoly NV Energy owned by billionaire Warrant Buffet, but residential customers also should benefit in the long run. Data from states that have adopted energy choice reveal a nearly 20 percent cost savings for consumers.

This newspaper endorses passage of Question 3.

Question 4 on the November ballot would also amend the state Constitution. Approval would require the Legislature to exempt durable medical equipment, oxygen delivery equipment, and mobility enhancing equipment from any sales or property taxes.

This would not only reduce the cost for those who require the equipment but also for all of us in the insurance pool who bear the cost.

We recommend a vote in favor of Question 4.

In each county in November the voters will be asked whether to index the tax on vehicle fuel to inflation with all resulting additional revenue going to build and repair roads specifically in those counties.

The 2015 Legislature allowed all counties to put a fuel tax indexing question on the ballot. This would allow the existing tax per gallon to increase at the same rate as the Producer Price Index, but with a cap of 7.8 percent per gallon. Some counties may choose a lower cap.

In this case the taxpayer-road user has a clear benefit in return for the outlay and thus a rare real return on investment. We think the voters would be wise to approve this tax.

(2016-ballot-questions-public-booklet)

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

5 comments on “Editorial: Voters should dump a tax, add a tax and end a monopoly

  1. There are sound and good reasons to explain why certain municipal services are supplied to the public at large by regulated monopolies. The generation, transmission and supplying of electricity is one of them. The reason that Nevada suffers “from some of the highest electricity rates in the west” are essentially because of purely political and “politically correct” influences. NV energy has been mandated by the public service commission with heavy pressure by the legislative branch (and self serving influence by leftist politicians like Dingy Harry Reid) to attain 25% of their generated electricity by expensive “renewable sources” by a certain date. And that’s only the beginning. This is predominantly why Nevada and California suffer from the most exorbitantly expensive electrical rates in the nation. One need only to look at the rates in nearby Utah and Washington state for comparison. The cheapest means of generation is hydro and coal…both of which face extinction because of environmentalist activism. Natural gas is a clean alternative to coal…but it’s still a fossil fuel and thus anathema to the tree and cactus huggers. Yes the Casino’s and large corporations would benefit from some form of competition…but the lowly homeowners would see very little change after the charges for wheeling power over existing lines are figured in. I’m voting NO on 1, NO on 2, NO on 3, YES on 4 and NO on 5…but that’s just me.

  2. Rincon says:

    According to http://www.electricitylocal.com/states/nevada/, “Residential electricity rates in Nevada average 11.83¢/kWh, which ranks the state 18th in the nation”, so it’s possible that Nevada has “some of the highest electricity rates in the west.”, but it’s nowhere near the most expensive nationally. Looking it up, I found that 10 states in the west have lower rates and 5 have higher than Nevada, unless we count Alaska and Hawaii as western states, then it’s 10 to 7, but either way, it’s doubtful that solar has a lot to do with it. 7 of the top 8 hydroelectric power producers are in the west and hydro is generally cheap. http://www.eia.gov/energyexplained/index.cfm?page=hydropower_where

  3. Hydroelectric and natural gas keep prices down in the West.

    August figures from EIA: https://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_6_a

    Nevada has been lower than national average for sometime.

    It also appears from today’s R-J story that Nevada has been doing a better job of late compared to others:

    “Recent testimony from Anne-Marie Cuneo, director of the regulatory operations staff for the PUC, also suggests Nevada rates are low.

    “In a filing on the rooftop solar grandfathering issue, Cuneo said that when adjusted for inflation, the Sierra Pacific Power Company’s rates are 38 percent lower now than in 1985, and Nevada Power’s rates are only 8 percent higher over the same period. Sierra Pacific is NV Energy’s Northern Nevada electricity provider.”

    I could not find the story online.

  4. According to that chart above only Idaho is lower in the Mountain West now than Nevada, due to sharp price drop in the past year.

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