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.

 

 

 

 

Study: Renewable energy requirement will cost Nevada money and jobs

A new analysis unsurprisingly reports — as has been found in every other state — that the legislative mandate for renewable electricity capacity will cost Nevadans money and jobs.

The analysis is based on the current law that requires NV Energy to obtain 25 percent of its power from “green” sources — such as wind, solar, biomass, geothermal, hydropower — by 2025, otherwise known as the renewable portfolio standard or RPS.

But Senate Bill 252 (SB_252_with_Amendments), which is being amended every time someone touches it, could make things even worse by tightening the requirement for expensive renewable energy. It first proposed to raise the RPS to 35 percent, but has been amended back to 25 percent. It first sought to eliminate efficiency efforts as a means of compliance, but apparently that is now being phased out, along with a multiplier giving double credit for solar power generation. It is hard to tell what the bill says because it looks like an explosion in a paint factory, with lines crossed out and underlined in various colors.

Reid Gardner plant would close early. (Sun photo)

Nevada Policy Research Institute commissioned Beacon Hill Institute of Suffolk University, which has performed similar analyses in several other states, including Oregon with a similar RPS, to look at Nevada’s RPS requirement. The report is titled RPS: A Recipe for Economic Decline. Fortunately, due to the state’s unique access to geothermal sources, one of the cheapest “green” generation sources, Nevada is not as bad off as other states.

One of the big selling points touted by Sen. Harry Reid and other “green” energy cronies is “green” jobs. But seldom do they weigh those new jobs against the jobs lost due to the higher cost of electricity. Using a range of estimates from low to high, Beacon Hill estimates the current RPS could cost Nevada between 590 and 3,070 jobs by 2025.

This is because power bills would increase from less than 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 better than the average salary in Nevada.

But those costs are outweighed when you calculate all the pollutants and greenhouse gases that won’t be poured into the air and cause the planet to overheat, some will argue.

“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 reports. “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.

Strangely enough, there is no appetite at the Legislature to simply repeal the RPS, not even among fiscal conservatives.

Add in the cost for NV Energy to shut down its coal-fired power plants early, as NVisioned in Senate Bill 123, and the costs just keep on mounting.