Nevada Week S1 Ep5 | Question 3: The Future of Energy in Nevada

♪ SUPPORT FOR "NEVADA WEEK" IS PROVIDED BY SENATOR WILLIAM H HERNSTADT, CASHMAN EQUIPMENT, DE CASTROVERDE LAW GROUP, VALLEY ELECTRIC ASSOCIATION, AND ADDITIONAL SUPPORTING SPONSORS

>> WELCOME TO "NEVADA WEEK" I'M YOUR HOST CASEY SMITH THANK YOU SO MUCH FOR JOINING US IT IS PROBABLY HARD TO FIND SOMEONE IN SOUTHERN NEVADA WHO HASN'T HEARD OF QUESTION 3 THE PROPOSED CONSTITUTIONAL AMENDMENT CALLED THE ENERGY CHOICE INITIATIVE IT IS PROBABLY HARDER TO FIND SOMEONE WHO REALLY UNDERSTANDS IT AND WHAT IT IS AND HOW IT COULD CHANGE NEVADA'S ENERGY MARKET IF VOTERS APPROVE IT COME NOVEMBER

THAT'S WHAT THE SHOW IS ALL ABOUT, WHAT COULD HAPPEN IF QUESTION 3 PASSES WE HAVE REPRESENTATIVES OF BOTH PERSPECTIVES JOINING US TO DISCUSS WHAT PASSAGE OF QUESTION 3 COULD MEAN FOR ENERGY CUSTOMERS IN THE SILVER STATE AS WELL AS A NEUTRAL, INDEPENDENT THIRD PARTY WHO HAS STUDIED WHAT DE REGULATING WHAT NEVADA'S ENERGY MARKET COULD MEAN FOR ALL OF US JON WELLINGHOFF IS WITH THE FEDERAL ENERGY REGULATORY COMMISSION HE'S SPOKEN ON QUESTION 3 AND SUPPORTS THE CAMPAIGN MEREDITH LEVINE IS THE DIRECTOR OF ECONOMY POLICY AT THE KENNY GUINN CENTER AND AUTHOR OF A COMPREHENSIVE REPORT ON THIS ISSUE AND STUDIED HOW SIMILAR ENERGY DEREGULATION PLAYED OUT IN OTHER STATES

SHE IS THE NEUTRAL INDEPENDENT PARTY IN THIS DISCUSSION SPEAKING ON BEHALF OF THE CAMPAIGN IS NEVADA DISTRICT ASSEMBLYMAN CHRIS BROOKS, THE MANAGING PRINCIPLE OF BROOKS CONSULTING AND FORMER VICE PRESIDENT OF VALLEY ELECTRIC ASSOCIATION AND FOUNDER OF LAS VEGAS SOLAR ELECTRIC WE WILL BE DISCUSSING WHAT COULD HAPPEN IF NEVADA VOTERS VOTE IN QUESTION 3 IF THEY VOTE IT DOWN NOTHING CHANGES THAT'S THE WAY IT WORKS LET'S START WITH MEREDITH

IF YOU COULD DESCRIBE THE ISSUE TELL US WHAT IS AT STAKE AND WHAT IT MEANS FOR ALL OF NEVADA? >> THANK YOU FOR HAVING US HERE FROM THE GUINN CENTER WHAT I WOULD SAY IS THIS QUESTION IS ASKING SPECIFICALLY IF NEVADIANS WANT TO RESTRUCTURE THE ELECTRICITY MARKET WHAT THE STAKES ARE IS THAT IT WOULD MEAN A DIFFERENT TYPE OF ENERGY MARKET IN THE STATE AND A NEW WAY OF DOING BUSINESS THEN, ABOUT 90 PERCENT OF THE CUSTOMERS ARE FAMILIAR WITH >> SO JOHN, WHY DO YOU THINK IT IS A GOOD IDEA FOR NEVADA ENERGY CUSTOMERS? >> THANK YOU AGAIN CASEY FOR HAVING US ON THE SHOW I THINK IT IS ALL ABOUT CUSTOMER'S BILLS, LOWERING BILLS AND PROVIDING THEM WITH CHOICE

CHOICE WHICH INCLUDES THE OPPORTUNITY TO DO WHAT MOST CUSTOMERS SAY THEY WANT TO DO AND THAT'S HAVE MORE RENEWABLE ENERGY LOOK ACROSS THE SPECTRUM OF DEMOCRATS, INDEPENDENTS, REPUBLICANS, POLL AFTER POLL SHOWS THOSE CONSUMERS WANT MORE RENEWABLE ENERGY, BUT YET NB ENERGY HAS THE MAJORITY OF THE ENERGY THEY SUPPLY TO US FROM FOSSIL FUEL IF WE CAN OPEN UP THE MARKET, PROVIDE CHOICE, WE CAN REDUCE COSTS AND ALSO GIVE CONSUMERS THE CHOICE THEY WANT TO HAVE CLEAN, RENEWABLE ENERGY >> CHRIS, YOU OPPOSE THIS WHY? >> I THINK LIKE JON SAID, MOST CONSUMERS WANT TO SEE MORE RENEWABLE ENERGY

MOST CONSUMERS WANT SAFE, AFFORDABLE, RELIABLE ELECTRICITY I FEEL THAT BY PUTTING INTO A CONSTITUTIONAL AMENDMENT A AMENDMENT THAT WOULD COMPLETELY UPEND OUR CURRENT ELECTRICITY MARKETS, WE DON'T ACHIEVE THOSE GOALS, AS A MATTER OF FACT WE SET THEM BACK >> MEREDITH WHO IS BEHIND THIS? HOW DID THIS GET STARTED? >> I BELIEVE THERE WAS SOME DISCUSSION AROUND THIS IN CERTAIN LEGISLATIVE SESSIONS, BUT IN TERMS OF WHO IS BEHIND IT, I THINK THERE WAS BIPARTISAN SUPPORT IN THE 2016 CAMPAIGN CYCLE, AND THAT THERE HAS BEEN SOME IDEA THAT RESTRUCTURING MIGHT BE SOMETHING THAT WOULD BE SUITABLE FOR THE NEVADA MARKET >> YOU STUDIED A LOT OF STATES THAT HAVE TRIED THIS HOW DOES IT WORK IN THOSE STATES? >> IT DEPENDS ON WHICH DIMENSION OF THE QUESTION YOU ARE ASKING ABOUT

IF WE WERE TALKING, FOR EXAMPLE, ABOUT THE BEHAVIOR OF RATES OR ELECTRICITY BILLS, THERE HAVE BEEN MIXED OUTCOMES IN THAT SO AGAIN IT WOULD REALLY DEPEND ON WHICH PART OF THIS THIS IS A VERY BIG ISSUE WITH A LOT OF MOVING PARTS >> LET'S START WITH ONE OF THE MOVING PARTS AND THAT'S CHOICE JON WOULD WE REALLY HAVE CHOICE? WOULD WE BE ABLE TO PICK OUR SUPPLIER OF EBB GEE OR WOULD WE BE, FOR INSTANCE IF IT IS ZIP CODE 89121 DO WE HAVE TO TAKE WHAT COMPANY IS ASSIGNED TO US? >> YOU WOULD HAVE COMPLETE CHOICE OF YOU ARE ENERGY PROVIDER

IF YOU LOOK AT TEXAS FOR EXAMPLE WHICH HAS HAD AN OPEN COMPETITIVE SYSTEM THAT IS COMPLETELY TRANSPARENT TO THE CONSUMER WHERE THERE'S A WEBSITE YOU CAN GO ON AND IT IS PUT UP BY THE STATE TO PROVIDE COMPARISON SHOPPING FROM 20 OR MORE DIFFERENT RETAIL PROVIDERS YOU COULD HAVE A PLAN WHERE YOU HAD SAY 100 PERCENT RENEWABLES AND BE ON SAY A THREE-YEAR PROGRAM WHERE YOU HAD A FLAT RATE AND YOUR NEIGHBOR COULD BE ON A PLAN WHERE THEY DECIDED TO GO MONTH TO MONTH AND ONLY 50 PERCENT RENEWABLES OR THE LOWEST PRICE THEY COULD GET WHATEVER THEY WANTED TO DO SOMEBODY RIGHT ACROSS THE STREET OR RIGHT NEXT DOOR CAN DO SOMETHING COMPLETELY DIFFERENT THAT'S WHAT'S SO POWERFUL ABOUT THIS

IT GIVES CONSUMERS THE CHOICE THAT THEY ACTUALLY WANT AND CAN HAVE WITH THIS KIND OF SYSTEM >> CHRIS, MANY ECONOMISTS AND POLITICIANS WILL SAY MONOPOLIES ARE NOT GOOD ECONOMIC THEORY SAYS IT'S NOT GOOD BECAUSE IT LEADS TO LESS COMPETITION AND A NON MONOPOLY IS BETTER PRICING YOU ARE FOR MONOPOLY IN THE ENERGY WHY? >> FOR ME THIS ISN'T ABOUT A MONOPOLY AND IT ISN'T ABOUT ENERGY

IT IS ABOUT THE PLAIN LANGUAGE OF THE CONSTITUTIONAL AMENDMENT BEING PROPOSED BY THIS CAMPAIGN IN THAT IT HAS US HAVING TO LIQUIDATE ALL OF THE STRANDED ASSETS OF THE MONOPOLY UTILITY AND PAY FOR THAT AS RATE PAIRS IT HAS CREATING A WHOLESALE MARKET THAT WE ARE NOT CURRENTLY IN, AND IT HAS US TAKING AWAY A LOT OF THE REGULATION ON THE PRICING, ALL OF THE REGULATION ON THE PRICING OF THE RETAIL ELECTRICITY THAT OUR CONSUMERS, NEVADIANS, MY CONSTITUENTS PAY EVERY DAY AND PUTTING THAT IN THE HANDS OF THE MARKETS WHAT I AM THE MOST CONCERNED ABOUT IS EXACTLY WHAT THIS CONSTITUTIONAL AMENDMENT DOES AND THE ENERGY IS NOT ON THE BALLOT

WHAT SUSPECT ON THE BALLOT IS A CONSTITUTIONAL AMENDMENT AND THAT'S WHAT CONCERNS ME MOST >> LET'S TALK PRICING JOHN CAN YOU GUARANTEE THE RATES WILL BE LOWER OR STABLE IF QUESTION 3 PASSES? >> WE DID A STUDY WE HIRED ONE OF THE MOST FOREMOST UTILITY ANALYSTS, THE GARRETT GROUP MARK GARRETT TESTIFIED MANY TIMES IN THE STATE OF NEVADA ON BEHALF OF A NUMBER OF VERY LARGE CUSTOMERS, AND MARK GARRETT IS FAMILIAR WITH THE DETAILS OF THE BOOKS AND RECORDS OF THE UTILITY COMPANY

FROM THAT HE WAS ABLE TO DETERMINE THAT CONSUMERS IN NEVADA COULD SEE AS MUCH AS $11 BILLION IN SAVINGS OVERALL THAT DOES NOT ACCOUNT FOR THE SAVINGS THAT WOULD ACCRUE FROM THE COMPETITIVE PROVISIONS FROM THE VARIOUS RETAIL PROVIDERS THESE SAVINGS COME FROM MONEY THAT HAS BEEN COLLECTED MY NV ENERGY THAT WOULD COME BACK TO US ONCE IT GOES INTO PLACE >> THE WAY IT WORKS RIGHT NOW THE PUBLIC UTILITIES COMMISSION BASICALLY CONTROLS RATES OR KEEPS AN EYE ON IT

WOULD THEY STILL BE IN PLAY IF THIS PASSES OR WOULD THEY BE MEANINGLESS TO THIS SUBJECT I GUESS? >> THEY WOULD HAVE A NUMBER OF ROLES WHEN I WAS AT FERC, WE WERE AN INITIAL ECONOMIC REGULATOR WE WERE DOING WHAT THE PUBLIC UTILITIES DOES RIGHT NOW THAT IS SET PRICES WE MOVED TO A COMPETITIVE MARKET WE SAW A COMPETITIVE MARKET THAT FERC WAS OVER

IT WAS MORE BENEFICIAL TO CONSUMERS WE WERE A MARKET REGULATOR THEY WILL BE A MARKET REGULATOR AND SET MARKET RULES LIKE THE PC IN THE STATE OF TEXAS PROVIDE FOR THE LICENSING OF THE ENERGY SERVICE REPRESENTATIVES THAT PROVIDE COMPETITIVE SERVICES TO CONSUMERS THEY WILL SET UP THE PROTECTIONS TO MAKE SURE CONSUMERS ARE PROTECTED WHEN THE COMPETITORS COME FORWARD AND PROVIDE SERVICES TO CONSUMERS IN THE STATE OF NEVADA

>> THEY STARTED A WHILE BACK WHEN NV SWITCHED THEY DECIDED TO TRY TO GET ELECTRICITY OFF THE OPEN MARKET AND THEY DIDN'T WANT TO BE PART OF THIS GRID WHY WOULDN'T CONSUMERS BENEFIT FROM THE SAME TYPE OF PRINCIPLE? >> WHEN LARGE CONSUMERS TAKE ADVANTAGE OF CURRENT STATUTES THAT ALLOW THEM TO LEAVE, TO GO OUT AND PROCURE THEIR OWN ENERGY ON THE OPEN MARKET THEY PAY A SUBSTANTIAL COMPONENT, A SUBSTANTIAL FEE THAT MAKES THE REST OF THE RATE PAYERS WHOLE THAT IS THE CONCEPT BEHIND WHAT THEY DO WITH 304B WHAT THIS IS DOING IS TAKING THAT SAME PROCESS, THAT MGM FOR INSTANCE OR SWITCH OR CAESARS HAVE GONE THROUGH SUCCESSFULLY AND THEY ARE SPREADING THAT FEE ACROSS THE RATE PAYERS OF THE STATE OF NEVADA

THEY ALREADY GO OUT AND DO HAVE CHOICES, AND WHAT I THINK WE HAVE HERE IS A PRETTY DANGEROUS SOLUTION IN SEARCH OF A PROBLEM RIGHT NOW OTHER STATES THAT HAVE DONE THIS, JON MENTIONS TEXAS, TEXAS HAS A HIGHER AGGREGATE ENERGY COST THAN THE STATE OF NEVADA DOES HE MENTIONS TEXAS TEXAS IS REGULATED A LARGE PART OF THE STATE IS STILL REGULATED IN THE SAME MANNER THAT WE HAVE IS LOWER COST THAN THE UNREGULATED SIDE OF THE STATE

I THINK AFTER SITTING THROUGH MONTHS AND MONTHS OF HEARINGS ON THE GOVERNOR'S HEARING ON ENERGY CHOICE, CHAIRING THE ENERGY SUBCOMMITTEE AND ASSEMBLY AND SITTING ON THE ENERGY COMMITTEE, I HAVE HEARD HUNDREDS OF HOURS OF TESTIMONY AND POURED THROUGH THOUSANDS OF PAGES OF DOCUMENTS FOR EVERY SUCCESS STORY THERE ARE TEN IN MY OPINION, TEN FAILURES THAT TOOK PLACE ALONG THE PATH OF DE REGULATING CERTAIN STATES >> MEREDITH YOU SINGLED OUT TEXAS IN YOUR STUDY WHAT'S YOUR TAKE ON WHAT HAPPENED TO TEXAS? >> TEXAS IS ACTUALLY, IF YOU WANT TO THINK ABOUT RETAIL ENERGY CHOICE TEXAS IS PROBABLY THE MODEL THAT IS MOST USED OR MOST CONSIDERED WHEN THINKING ABOUT IT, BECAUSE THEY DID MAKE A LOT OF DECISIONS THAT WERE BENEFICIAL IN THE IMPLEMENTATION PHASE

THE ASSEMBLYMAN IS NOT INCORRECT BUT THERE HAVE BEEN STUDIES THAT SHOW IN AREAS THAT HAVE MOVED TO THE CHOICE MODEL, THERE ARE SOME HIGHER PRICING IN THOSE AREAS WE WOULD CAUTION WITH OTHER CITIES THAT PROVIDE CONTRADICTORY EVIDENCE BEHIND THAT I THINK THE QUESTION COMES BACK TO IMPLEMENTATION WHAT DOES THAT LOOK LIKE? AGAIN THE TEXAS — I CERTAINLY AGREE WITH MR

WELLINGHOFF AS WELL WITH THE NUMBER OF SUPPLIERS IN THE MARKET THERE IS ABOUT 200, 250 FOR EACH RESIDENT SAY OR BUSINESS IN THE STATE YOU GO TO POWERTOCHOOSEORG YOU CAN SEE WHAT THE CONTRACTS LOOK LIKE THAT'S SOMETHING FOR NEVADIANS TO CONSIDER >> PULLING FROM YOUR STUDY SOME 22 STATES HAVE TRIED THIS WHAT IMPACT DID IT HAVE ON THOSE STATES? >> THERE IS THE MIXED EVIDENCE PROBLEM

WHAT AFFECT HAS IT HAD ON RATES? WELL IN THE EARLY STAGES OF IMPLEMENTATION IN THESE STATES, WHAT WE SEES THAT MANY STATES HAVE RATE CAPS THE RATE CAPS HELD PRICES LOW IN THE INITIAL STAGES WHEN YOU LOOK AT IT A LOT OF STUDIES END AT THE POINT WHERE RAPE CAPS ENDED IT IS HARD TO KNOW BECAUSE THEY LOOKED LOWER IN THE PERIOD SINCE THEN WE HAVE HAD EVIDENCE THAT SHOW RATES HAVE GONE UP AND GONE DOWN

IT IS A MIXED BAG THERE'S NOTHING CONCLUSIVE TO SAY THIS WILL HAPPEN TO YOUR RATES >> YOU MENTION MB ENERGY IS NOT ON THE BALLOT THERE ARE A LOT OF PEOPLE THAT THINK NV ENERGY STOPPED THE SOLAR MOVEMENT IN NEVADA AT LEAST FOR A WHILE THAT MAY BE WHY SO MANY PEOPLE VOTED FOR QUESTION 3 THE FIRST TIME AROUND TWO YEARS AGO

WE HAVE TO VOTE ON IT TWICE BECAUSE IT IS A CONSTITUTIONAL AMENDMENT WHAT IS THE FUTURE OF SOLAR ENERGY IF QUESTION 3 PASSES, AND IF IT DOESN'T PASS, EXCUSE ME IF IT DOESN'T PASS AND THE MONOPOLY FOR ENERGY CONTINUES >> THERE'S UTILITY SCALE SOLAR THE LARGE PROJECTS AND THE ROOFTOP SOLAR THE SOLAR YOU AND I INVEST IN FOR OUR OWN HOME

THE UTILITIES SOLAR SPACE HAS BEEN DRIVEN BY A PORTFOLIO STANDARD THAT SAYS THE UTILITY YOU MUST BUY A CERTAIN AMOUNT OF RENEWABLES IT IS A TREMENDOUS CLEAN ENERGY REVOLUTION IT HAS CREATED TENS OF THOUSANDS OF HIGH PAYING JOBS OVER THE YEARS AND IT IS POSSIBLE, BECAUSE WE ARE ABLE TO AMORTIZE THOSE COSTS OVER A 20, 25 YEAR INVESTMENT AND PUT IT IN THE RATES RENEWABLE ENERGY IS AT AN ALL TIME LOW

WE SHOULD BE TAKING ADVANTAGE OF THAT WHEN WE PUT IT INTO THE MARKETS, AND WE LET THESE LARGE CONSUMERS ARE GOING OUT THERE TO DECIDE IF THEY ARE GOING TO PROCURE ENERGY OR NOT, THEY DON'T HAVE THE SAME RATE RECOVERY METHOD THAT WE CURRENTLY HAVE I THINK IT SLOWS DOWN THE DEVELOPMENT WE HAVE ALREADY SEEN IT HAPPEN SLOWS DOWN THE DEVELOPMENT OF RENEWABLE ENERGY ON THE STATE

THE ROOFTOP SOLAR SIDE THE DEAL YOU HAVE THE UTILITY ON THE OTHER SIDE OF YOUR METER WILL TAKE YOUR ENERGY AND TAKE IT AT A CERTAIN RATE THAT'S CURRENTLY IN OUR STATUTE THERE IS NOTHING IN THIS CONSTITUTIONAL AMENDMENT — I WOULD ARGUE THE LANGUAGE IN THE CONSTITUTIONAL AMENDMENT THAT WOULD MAKE THAT TIME OF NET PARADIGM IMPOSSIBLE >> NUMBER ONE, CHRIS KNOWS WELL BECAUSE HE AUTHORED AND PASSED THE BILL AB405, THERE'S A SECTION I THINK IT IS 28

07 IT SPECIFICALLY SAYS IF WE GO TO A RETAIL CHOICE SITUATION, THESE RETAIL PROVIDERS WILL BE UNDER THE METERING SYSTEM THEY ARE PROTECTED CONSUMERS ARE PROTECTED BY THE SAME LANGUAGE CHRIS PUT IN HIS BILL WE ARE HAPPY HE DID THAT WE ARE PLEASED THAT THAT'S THE CASE

AS FAR AS THE RENEWABLE PORTFOLIO STANDARD, THE NO ON 3 CAMPAIGN HASN'T SUPPORTED QUESTION 6 WHICH IS THE INCREASE OF THE RENEWABLE PORTFOLIO STANDARD THE CAMPAIGN IS FULLY IN SUPPORT OF QUESTION 6, WHICH IS INCREASING RENEWABLE PORTFOLIO STANDARD TO 50 PERCENT IF YOU COMPARED THE TWO WHO IS REALLY IN FAVOR OF THE RENEWABLES I THINK YOU WILL SEE THE QUESTION 3 PEOPLE HAVE PUT OUR MONEY WHERE OUR MOUTH IS, OR AT LEAST ON THE LINE SAYING WE SUPPORT THE INCREASED RENEWABLE PORTFOLIO STANDARD IN QUESTION 6 >> CHRIS? >> I WOULD AT THE LEGISLATIVE SESSION I ACTUALLY WAS — I WAS THE AUTHOR OF THAT BILL

AS CLEVER AS I THINK I AM AND AS GOOD AS I THINK OF A BILL THAT WAS, THE CONSTITUTION STILL SUPERCEDES IT IF SOMETHING COMES UP IN THE CONSTITUTION, AND I BELIEVE THAT THE LANGUAGE OF THIS BALLOT INITIATIVE DOES MAKE IT IMPOSSIBLE FOR US TO HONOR NET METERING AGREEMENTS WE CAN SAY ANYTHING WE WANT IN EXISTING STATUTE, THAT WILL BE ONE OF THE 2,000 STATUTES THAT WILL BE TOUCHED AM BY THIS CONSTITUTIONAL AMENDMENT >> MEREDITH ANY SIMILAR SITUATIONS WITH RESTRUCTURING TO INCREASED RENEWABLES? >> THERE WASN'T WE FOUND IN THE STUDY THAT RELATIONSHIP ISN'T ONE THAT NECESSARILY EXISTS IN TERMS OF, CAN YOU TRACE A DIRECT CAUSE FROM RESTRUCTURING TO INCREASED RENEWABLE ENERGIES

THERE IS A REASON FOR THAT THE BOTTOM LINE IS THEY DON'T SEEM TO RELATE TO ONE ANOTHER AND WHAT TENDS TO MATTER MORE IS THE RENEWABLE PORTFOLIO STANDARD >> I HAVE A QUESTION FOR A VIEWER ONCE AGAIN IF YOU WOULD LIKE TO ASK THE QUESTION WHERE YOU HAVE A SHOW SUGGESTION WRITE TO US AT NEVADAWEEKINVEGAS@PBS

ORG IS THERE AN OPTION FOR PEOPLE TO MOVE ENTIRELY OFF THE GRID AND ON TO SOLAR AND BATTERY? >> ABSOLUTELY THERE'S A RIGHT TO SELF GENERATE IT'S IN THE LAW AB405 THIS CONSTITUTIONAL AMENDMENT ENABLES IT TO BE PUT IN THE CONSTITUTION

THERE IS NO GENERATION MONOPOLY CONSUMERS COULD DO THAT UNDER THIS CHOICE INITIATIVE >> COULD THEY DO THAT WITHOUT IT? >> THEY CERTAINLY CAN >> SERVICE BECAUSE THAT'S PROBABLY THE NUMBER THREE ISSUE BEHIND RATES AND RENEWABLES

ANOTHER QUESTION IS, THE INFRASTRUCTURE IN PLACE NOW, WILL IT STILL BE IN PLACE OR ONCE THIS GETS ROLLING, WILL THERE BE MORE INFRASTRUCTURE OF WHICH THE COST WILL BE PLACED ON THE CONSUMER? >> THE INFRASTRUCTURE WILL REMAIN IN PLACE NV ENERGY WILL LIKELY CONTINUE TO BE THE OWNER AND OPERATOR IN MAINTAINING THE INFRASTRUCTURE OF THE LINES AND WIRES I BELIEVE THE HEAD OF NV ENERGY HAS SAID PUBLICALLY HE SEES NO RELIABILITY ISSUES IF QUESTION 3 GOES INTO PLAY >> BUT THE NO ON 3 SUGGESTS THERE WILL BE INCONSISTENCIES IN POWER AND RELIABILITY AND POSSIBLY BLACKOUTS AND BROWNOUTS YOU THINK THAT'S THE CASE? >> IT DEPENDS, QUITE FRANKLY, IF THIS BALLOT INITIATIVE PASSES AND WE HAVE A CONSTITUTIONAL AMENDMENT THAT TELLS THE LEGISLATURE THAT IN THE NEXT TWO SESSIONS, THEY NEED TO PUT IN PLACE A COMPLETELY FROM SCRATCH ENERGY MARKET, IF WE DO THAT RIGHT, WE WOULD HOPEFULLY MAINTAIN THE SAFETY AND RELIABILITY OF THE SYSTEM WE CURRENTLY HAVE

IF WE DO THAT WRONG WE WILL NOT KNOW UNTIL WE HAVE BLACKOUTS, BROWNOUTS, LACK OF AVAILABILITY OR HIGH PRICES SO THAT — IN THAT IS WHERE I HAVE THE MOST DISCOMFORT IN WHY ARE WE DOING THIS? >> I HAVE EVERY CONFIDENCE IN CHRIS THAT HE CAN DO IT RIGHT >> GIVEN THE INFRASTRUCTURE WE HAVE NOW IT IS FAIRLY UP TO DATE DID YOU FIRST SEE A PROBLEM THAT WILL BE DOWN THE ROAD? CERTAINLY THERE'S OBSOLESCENCE INVOLVED DOWN THE ROAD >> I DON'T SEE A PROBLEM WITH THE DISTRIBUTION SYSTEM AND TRANSMISSION SYSTEM

TRANSMISSION SYSTEM IS THE REGULATORY COMMISSION I CHAIRED FOR 4 AND A HALF YEARS THE DISTRIBUTION SYSTEM WILL BE IS NOW AND WILL CONTINUE TO BE EVEN UNDER ENERGY CHOICE, UNDER THE JURISDICTION OF THE NEVADA PUBLIC UTILITIES COMMISSION THEY WILL IN FACT SET A RATE, THEY WILL SET PRICES ON THE DISTRIBUTION PORTION OF THE SYSTEM THEY WILL DETERMINE THAT AND THAT WILL CONTINUE ON I DON'T THINK WE WILL SEE ANY CHANGES THERE SUBSTANTIALLY AT ALL

>> IF THIS GOES THROUGH AND IT BECOMES A WHOLESALE MARKET, AND MEREDITH YOU POINTED OUT THIS IN YOUR STUDY YOU SAY THE FOUR COMPONENTS OF THIS ARE GENERATION, TRANSMISSION, DISTRIBUTION AND RETAILING WHICH NV ENERGY DOES IT ALL NOW IF QUESTION 3 PASSES THOSE ARE FOUR CATEGORIES THAT WOULD PROBABLY BE EXCLUSIVE TO EACH OTHER IN DIFFERENT PHASES OF THE OPERATION CORRECT? >> TRANSMISSION AND DISTRIBUTION WILL CONTINUE TO BE BUNDLED AND CONTINUE TO BE UNDER NV ENERGY IN ESSENCE >> MAYBE YOU HAVE THREE ELEMENTS OR TWO INSTEAD OF FOUR

WOULDN'T THAT CREATE MORE MIDDLE MEN AND THEREFORE RAISE THE PRICE EVENTUALLY WHEN IT GETS TO THE CONSUMER? >> NO, IT WON'T AGAIN YOU WILL HAVE COMPETITION ON THE IMPORTANT SIDE OF IT, WHICH WILL BE THE DELIVERY OF ENERGY SERVICES, AND THOSE ENERGY SERVICES WILL TAKE MANY FORMS ULTIMATELY THEY COULD TAKE THE FORM OF PROVIDING ROOFTOP SOLAR THEY COULD TAKE THE FORM OF PROVIDING STORAGE IN THE HOME TO TAKE THE FORM OF PROVIDING ALL KINDS OF CONTROLS FOR YOUR BUSINESS AND HOME WITH RESPECT TO YOUR HVAC SYSTEM ULTIMATELY YOU CAN CONTROL YOUR COSTS

THOSE WILL BE COMPETITIVE OFFERINGS MUCH LIKE THEY ARE IN TEXAS NOW THAT CAN BE PROVIDED TO CONSUMERS THAT WE DON'T HAVE THOSE OPTIONS NOW >> YOU WANT TO RESPOND? >> YOU KNOW, IT WILL BE SEVERAL DIFFERENT COMPONENTS THREE OR FOUR DIFFERENT COMPONENTS WITH DIFFERENT BUSINESS INTERESTS, WITH DIFFERENT REGULATORY BODIES LOOKING OUT OVER THOSE DIFFERENT BUSINESS INTERESTS, AND, YOU KNOW, THEY WILL BE COMPETING FOR THEIR OWN PROFITS AND WITHOUT A STRONG REGULATORY AGENCY THAT IS LOOKING EXACTLY JUST AT THE RETAIL SIDE OF IT AND WHAT'S BEST FOR CONSUMERS, I AM AFRAID THE CONSTITUTIONAL AMENDMENT TIES THE HANDS OF THE LEGISLATURE AND PUBLIC UTILITIES COMMISSION IN BEING ABLE TO LOOK OUT FOR THE RETAIL SIDE OF THAT DISTRIBUTION TRANSMISSION IS NOT ADDRESSED IN THIS CONSTITUTIONAL AMENDMENT

IT TALKS ABOUT THE WHOLESALE AND RETAIL SIDE OF THIS THERE HAS BEEN NOTHING IN ANY OF THE DATA PRESENTED BOTH TO THE PEOPLE OF NEVADA THAT GUARANTEES OR EVEN ELUDES TO THE FACT THAT WE WOULD BE HAVING A SAVINGS ON EITHER SIDE OF THOSE TWO COMPONENTS THAT WOULD BE CHANGED >> WHEN YOU SPEAK ABOUT GENERATION YOU ARE TALKING ABOUT ANOTHER COMMODITY INVOLVED, PARTICULARLY NATURAL GAS >> IT IS THE GENERATION OF ELECTRICITY POWER PLANTS IS PROBABLY OUR BEST EXAMPLE

WHEN WE TALK ABOUT THAT, WHAT IT DOES IS THE BIG CHANGE HERE IS CURRENTLY CONSUMERS HAVE EXPOSURE TO NATURAL GAS THROUGH THE WHOLESALE PRICE WHEN THEY NEED IT AND THAT DOES GET PASSED ON TO THE CONSUMER WITHOUT THE ABILITY TO TAKE PROFIT PER LAW WHAT WOULD CHANGE HERE IS THERE WOULD BE MORE EXPOSURE IN TERMS OF NATURAL GAS PRICING, BECAUSE IT OPENS UP INTO THE WHOLESALE MARKET >> VARIABLE COST IS WHAT YOU ARE SAYING >> IT IS A VARIABLE COST SO WHEN IT GOES DOWN THAT CAN BE BENEFICIAL

WHEN IT GOES UP THERE HAVE BEEN INSTANCES WHERE CONSUMERS ARE UNHAPPY WITH THAT >> WE ARE RUNNING OUT OF TIME I WANT TO TOUCH ON TWO THINGS THIS IS A CONSTITUTIONAL AMENDMENT HAS THAT EVER BEEN TRIED ANYWHERE ELSE? >> IT IS NOT

>> WHY ARE WE DOING IT THAT WAY HERE? >> I THINK ALL YOU HAVE TO DO IS WALK DOWN THE HALLS OF THE LEGISLATURE AND COUNT HOW MANY LOBBYISTS NV ENERGY HAS TO KNOW YOU WANT TO ENSURE THE PEOPLE HAVE THEIR CHOICE PUT OUT THERE IN THE CONSTITUTION WHEN I WAS AT FERC IN WASHINGTON, DC THERE'S A UTILITY COMPANY THAT HAS MOST OF THE ENERGY CALLED SOUTHERN COMPANY WE USED TO CALL THEM A LOBBYING COMPANY THAT USED TO SUPPLY ENERGY

THEY HAD 60 LOBBYISTS IN DC YOU HAVE TO MAKE SURE THE PEOPLE'S WILL, WE HAVE 780,000 PEOPLE THAT VOTED IN FAVOR OF THIS THE PEOPLE'S WILL IN FACT IS PUT IN THAT CONSTITUTION IT IS A VERY SIMPLE FORM THAT GIVES CHRIS AND HIS FELLOW LEGISLATURES THE OPPORTUNITY TO ULTIMATELY PUT THE STRUCTURE AROUND THAT AND MAKE THE WHOLE THING WORK >> THAT'S MY NEXT QUESTION

YOU HAVE TO HAVE SOME SORT OF A BILL PASSED BY JULY 1ST, 2023 THE LEGISLATURE HAS A LOT ON ITS PLATE CAN THAT BE DONE? >> IT IS ABOUT 1200 BILLS A SESSION THEY PASS ABOUT 500 THIS COVERS 2,000 STATUTES IN THE STATE OF NEVADA

WE WOULD HAVE TO START FROM SCRATCH ON A WHOLESALE ENERGY MARKET WE CHANGE HOW CUSTOMERS TAKE THE ENERGY RIGHT NOW AND HOW WE GOVERN THAT IT IS AWE LOT OF WORK, AND WHAT I WANT TO KNOW IS WHAT DO WE NOT GET DONE WHILE GETTING THIS DONE AS FAR AS LOBBYISTS ROAMING THE HALLS, JOHN REGISTERED AS A LOBBYIST SO HE KNOWS THERE ARE ATE LOT OF LOBBYISTS IN THAT BUILDING IF ANY ONE HAS DOUBT ABOUT ME TAKING ON NV ENERGY — >> I DON'T

>> I STILL DON'T THINK THIS IS THE BEST IDEA >> I THINK CHRIS CAN TAKE THEM ON WITH THIS PUT IN PLACE I THINK IT WILL PASS IN NOVEMBER THAT WE CAN COUNT ON THE LEGISLATURE TO DO THE RIGHT THING THAT END WE ARE NOT STARTING FROM SCRATCH IN 99 WE STARTED DOWN THIS ROAD THERE WAS A HUGE REPORT THEY DID THEN AND THE GOVERNOR'S TASK FORCE HAS PUT OUT A 52 PAGE REPORT ON RECOMMENDATIONS

WE HAVE LOTS OF INFORMATION TO START WITH THEY ARE NOT STARTING FROM ZERO THEY HAVE HUGE AMOUNTS OF DATA >> WE WILL HAVE TO HAVE ANOTHER SHOW ON IT I HOPE YOU WILL ALL THREE COME BACK SO WE CAN EXPLORE THIS

WE WOULD LIKE TO THANK OUR GUESTS JON WELLINGHOFF, FEDERAL ENERGY REGULATORY COMMISSION, MEREDITH LEVINE DIRECTOR OF ECONOMIC POLICY OF THE GUINN CENTER AND OF COURSE CHRIS BROOKS, THE MANAGING PRINCIPLE OF BROOKS CONSULTING AND FORMER EXECUTIVE VICE PRESIDENT OF VALLEY ELECTRIC ASSOCIATION IF YOU WOULD LIKE TO LEARN MORE ABOUT WHAT WE TALKED ABOUT GO TO VEGASPOORG IF YOU HAVE A QUESTION E-MAIL US AT NEVADAWEEK@VEGASPBSORG

THAT'S IT FOR THIS WEEK'S "NEVADA WEEK" I AM CASEY SMITH THANK YOU FOR SPENDING PART OF YOUR NEVADA WEEK WITH US

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