Whither future power bills if voters approve Energy Choice Initiative?

Will power bills go up or down, if voters approve the Energy Choice Initiative on the November ballot? Depends on whose assumptions you believe.

The Nevada Public Utilities Commission, in a 109-page report recently released, claimed passage would cause electricity rates to rise $24.91 a month in Southern Nevada and $6.52 Northern Nevada residential customers, because NV Energy  has threatened to sell off its power generation plants at a loss — even though there is nothing in the initiative requiring such a move.

But a report by the Garrett Group presented to the Governor’s Committee on Energy Choice on Wednesday said such a sell off should be profitable, and, when coupled with the recent tax law changes, should cause power bills to drop by $11.16 a month.

The Garrett report noted that one can’t use current market power plant sales to make projections, because current sales reflect the fact that all retail customers are captive customers of NV Energy. Market sales, if the initiative passes, would change to reflect the fact that customers no longer would be captive customers.

We suspect NV Energy has threatened to sell off generating plants because under the competitive market the initiative would create the company would no longer be guaranteed a 10 percent rate of return on investments and might have to settle for a smaller profit margin unsatisfactory to billionaire company owner Warren Buffett.

Under the initiative the company or some other entity probably would still maintain a monopoly over transmission and distribution along with a guaranteed return on investment.

In 2016 voters approved the Energy Choice Initiative by an overwhelming 72.4 percent to 27.6 percent. Because the measure would amend the state Constitution it is back on the ballot this fall for final voter approval, but this time around a coalition headed by the state’s largest power monopoly, NV Energy, has vowed to spend $30 million to defeat it.

Voters will have decide who they believe and what is in their best interests. Capitalism or monopoly?

8 comments on “Whither future power bills if voters approve Energy Choice Initiative?

  1. Forbes:

    Texas produces more than double the amount of wind, solar and other renewable electricity as California while California’s retail electric rates were 89 percent higher than Texas’ in 2017.

    California heavily regulates electricity, while Texas allows free market competition in most of the state.

    Since 2008, California’s inflation-adjusted retail price of electricity has increased 13 percent in the state, while the Western region saw its electrical prices rise 8 percent in tandem.

    Meanwhile, Texas saw retail inflation-adjusted electricity prices decline by 32 percent from 2008.

    https://www.forbes.com/sites/chuckdevore/2018/05/07/texas-produces-double-the-renewable-power-as-california-at-almost-half-the-price-blame-regulation/#133611511b86

    Thanks for the Facebook posting, Dave.

  2. Anonymous says:

    According to this study, Texas had the 5th highest electric bills in the country in 2017, and California had the 45th.

    Overall energy costs (which included gas for driving, gas for heating, and other energy costs had California ranked 42nd and Texas 22nd.

    “Rates” don’t mean as much at the end of the day when the “bills” are what you pay so whatever Texas may claim about their rates being low, when their customers get their bills, those bills are among the highest in the country (like 5th highest).

    And sure, free markets and such. Ask the consumers in California if they’d prefer the higher bills associated with that free market stuff (and the dirty air, and water, and earth) and I’m guessing they say no thank you.

    https://wallethub.com/edu/energy-costs-by-state/4833/

  3. Steve says:

    Both sides are hyping this so heavily it’s really difficult to dig out some truth.

    Some looking at chooseenergy.com reveals 40 different plans for one zip code in Texas. And they expect rates to climb a lot this summer if the plan isn’t “fixed rate”. It gets really confusing from a quick look at it. And TX average rate did go down over last year but TX and NV were about the same in 2017.

  4. Hint: It is hotter in Texas and Nevada. Imagine the costs of the rates were the same?

  5. Anonymous says:

    Yes I understand that Thomas, and I suppose IF the rates remained the same in Texas and in California while it got hotter in California, THEN maybe that would make a difference.

    Maybe the rates charged in these two states have something to do with the fact that Californians use less electricity and energy than Texans right?

    And I saw another study done that showed how much more “efficient” California was relative to Texas in that with less energy, they significantly outproduce Texas in GDP. The study concluded that the amount California saved, in energy costs, added a huge amount ($65 billion dollars since the 70’s) to their overall economy relative to Texas.

    https://www.nrdc.org/sites/default/files/ca-success-story-FS.pdf

  6. Bill says:

    Up, down or sideways? Which way will the rates go? I mistrust studies unless I know all of the parameters. There is some merit in the predictability of rates and delivery under a regulated monopolistic provider and while free market solutions are usually my preference, there are still unanswered questions that I have. I am in fora lot of reading between now and the election.

  7. […] a report by the Garrett Group presented to the Governor’s Committee on Energy Choice recently on behalf of […]

  8. […] a report by the Garrett Group presented to the Governor’s Committee on Energy Choice recently on behalf of […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s