Nevada lawmakers mandate renewable energy even if we choke on the cost

Gov. Steve Sisolak signs legislation requiring electricity companies to get half of their energy from renewable sources by 2030. (AP pix via Elko Daily Free Press)

Gov. Steve Sisolak signs legislation requiring electricity companies to get half of their energy from renewable sources by 2030. (AP pix via Elko Daily Free Press)

Earth Day in Nevada, where never is heard a discouraging word.

On Monday Gov. Steve Sisolak signed a bill that will require 50 percent of Nevada’s electricity to be generated by renewable sources — such as wind, solar and geothermal — by 2030. The bill passed both the Senate and Assembly unanimously. The current renewable portfolio standard (RPS) is 25 percent by 2025.

No one deigned to mention and apparently no one bothered to ask just what this requirement will cost Nevada ratepayers. Clean air at any price, right?

A study released Monday by the Energy Policy Institute at the University of Chicago report found RPS programs significantly increase average retail electricity prices, with prices increasing 17 percent 12 years after passage.

As for cleaning the air, the study found that RPS programs did indeed reduce carbon emissions, but at a high cost.  The study found the cost to be more than $130 per metric ton of carbon-dioxide and as much as $460 per metric ton. “This is several times higher than conventional estimates of the benefits of reducing a metric ton, or the social cost of carbon (SCC),” the report said. “The Obama Administration’s central estimate of the SCC is roughly $50 per ton in today’s dollars.”

That’s like killing a gnat with an anvil.

Did anyone bother to read a 2013 study by the Beacon Hill Institute at Suffolk University, which was commissioned by the Nevada Policy Research Institute?

Beacon Hill estimated the current RPS could cost Nevada between 590 and 3,070 jobs by 2025. This is because power bills would increase from somewhere around 2 percent to nearly 11 percent due to the RPS. While the residential power user’s bill might increase anywhere between $20 and $130 a year, an industrial ratepayer could expect power bills to increase from nearly $7,000 to more than $47,000 a year — that’s higher than the average salary in Nevada.

“One could justify the higher electricity costs if the environmental benefits — in terms of reduced greenhouse gases (GHGs) and other emissions — outweighed the costs,” Beacon Hill reported. “However, it is unclear that the use of renewable energy resources — especially wind and solar — significantly reduces GHG emissions. Due to their intermittency, wind and solar require significant conventional backup power sources that are cycled up and down to accommodate the variability in the production of wind and solar power. A 2010 study found that wind power actually increases pollution and greenhouse gas emissions.

“Thus, there appear to be few, if any, benefits to implementing RPS policies based on heavy uses of wind.”

The bottom line, according to the analysis, is higher power costs will make Nevada less competitive and drive away potential job creating businesses without doing anything whatsoever to reduce global emissions.

NV Energy produces the majority of power in Nevada and its president and CEO, Doug Cannon, was on hand at the bill signing to say, “We announced our support of the renewable standard increase in 2018 and are honored to have worked closely with Governor Sisolak, Senator Chris Brooks, who was instrumental in leading this effort; and other stakeholders to accomplish this so early in the legislative session.”

A futile gesture.





12 comments on “Nevada lawmakers mandate renewable energy even if we choke on the cost

  1. Joe Duke says:

    Excellent points regarding the ridiculously high cost to clean the air. And the strong likelihood that this will affect the job market, decrease jobs. But your comment on NVE earning a rate of 10% return on investments for renewable energy is way off the mark. If NVE were to build their own renewable projects, or build a conventional natural gas power plant, they would earn 10% on it. But NVE is increasing to 50% renewable energy by 2030 entering into PPAs (power purchase agreements). NVE does NOT EARN ANY RATE OF RETURN on a PPA. ZERO. They just pay for the energy from projects built by a third party. And the energy price on new projects has dropped significantly recently. So to imply that NVE has an interest in increasing renewable energy since they get a guaranteed profit on it is simply not true and misleading. #fakenews.

  2. They currently say they are planning PPAs, but that could change.

  3. Joe Duke says:

    Currently the PUCN will not allow NVE to build renewable projects. PPAs are the only option for added renewable energy to their system. Might that change in the future? Sure. Anything can happen. But your statement that they WILL earn a rate of return by adding renewable energy is not correct now, and may never be unless things change.

  4. I stand corrected. Was not aware of the PUC dictate. Edited.

  5. Anonymous says:

    And don’t forget Thomas, according to the scientician in the White House, wind causes cancer.

    So, there’s that.

  6. Steve says:

    The law remains flawed because it failed to include carbon capture/recycling into synthetic fuels coupled with sequestration of the carbon in pellet form.

    The state of Nevada has let go a totally viable industry currently in its infancy but fully functional now.
    Audi is making synthetic gasolene and diesel and carbon capture is fully functional and growing fast.
    (When they go public, it’s a buy)

  7. WhatMe Worry says:

    Does this mean the NPUC will compel NV Energy to buy individually produced solar energy at the rate they buy other power and make home based PV and other power produced at the individual level a norm or continue to drive individuals away from production after the current amnesty expresses?

  8. Your guess is as good as mine.

  9. Rincon says:

    The point of your article is well taken, Thomas. There are far better ways to accomplish the goal, but unfortunately, Conservatives are doing a very good job of blocking any and all attempts to reduce greenhouse gas emissions, so much of the water has already flowed under the bridge. Emission portfolio standards are some of the few measures to get past the gauntlet, despite their inefficiency. Better ways, such as removing fossil fuel subsidies (and special tax treatment) have been successfully blocked by these same Conservatives. They’re really not for free markets after all, are they?

  10. HighflyinBrien says:

    This is utter insanity based on bullsh*t science. And of course…the progressives will have to subsidize all of the freeloaders in their political base, as well as the low or no income poor and truly indigent – who will suffer the most! They will do this by sharply increasing the taxes of those who actually work for a living and the job creating small businesses. So much for defenders of the middle class. Instead of letting the innovators and the Tesla’s & Edison’s of tomorrow transition us to cleaner, renewable and more sustainable sources and forms of energy…they choose to use the political billy club. Mark my words, all of Nevada will pay a hefty ransom for this madness in the form of extreme economic slow downs and regulated foolishness. The Green New Deal for Nevada!

  11. HighflyinBrien says:

    AOC-SS…two peas in a green pod. The Green New Deal of Nevada has been christened.

  12. […] 2013 study by the Beacon Hill Institute at Suffolk University, which was commissioned by the Nevada Policy […]

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