Introduced by Democratic Sen. Chris Brooks on Wednesday, SB547 would substantially alter the state’s so-called 704B law for the first time since it was created in 2001, adding numerous new restrictions and requirements — including a new licensing structure, additional payments and more requirements for a departure — for businesses that already have or are in the process of departing NV Energy’s electric service.
Notably, the bill would now require any business applying to leave the utility prove that such an exit would be “in the public interest” — raising the current bar of only having to prove an exit isn’t “contrary” to the public interest.
Current 704B structure allows for large electric customers of the utility to file an application with the Public Utilities Commission (PUC) to obtain power from another source, as long as the commission determines the exit isn’t contrary to the public benefit and the departing business agrees to pay a typically sizable “impact” fee to offset any financial burden that other customers would have to pay.
The law was put in place in 2001 amid questions related to the ability of NV Energy to meet energy supply needs in the aftermath of the Western U.S. energy crisis of 2000 and 2001, and it was used by mining giants Barrick and Newmont to leave the utility and construct their own power plants. After a dormant period, the process was dusted off in 2014 and 2015 and used by large companies including Switch, MGM Resorts, Wynn Resorts and Las Vegas Sands to apply to leave the utility, but to do so by purchasing power from a third-party wholesaler as opposed to constructing their own power plants.
The number of exit applications swelled during the last two years — 13 companies filed to leave in 2018 and 2019, including the Grand Sierra Resort, SLS Las Vegas, Boyd Gaming, MSG Las Vegas, a building supplies company north of Las Vegas, the under-construction Raiders stadium, Atlantis Casino Resort Spa, Fulcrum Sierra BioFuels and Station Casinos.
But under SB547, exits would be much more limited and require several more steps before they take place.
The bill first requires that NV Energy include in its Integrated Resource Plan — filed every three years and detailing the utility’s expected electric supply and demand — details on the total amount of energy that departed customers can purchase from outside providers.
It requires the utility to use a “sensitivity analysis” in developing its plan, one that addresses load growth, import capacity, potential strain on existing infrastructure and the projected effect of customers purchasing less electricity than the maximum outlined in the plan. It also requires the plan to calculate impact fees applicable to electricity costs paid for by end-use customers of the utility.
Under the bill, the PUC would need to determine several factors — including renewable energy development and furthering “safe, economic, efficient and reliable electric service” — when considering the utility’s plan for how much electricity should be made available for outside providers to sell to departed customers.
The bill would also restrict the submittal of new exit applications to a 30-day period between Jan. 2 and Feb. 1 of every year, setting a 280-day period in which the commission would either approve the exit application. If no approval is granted, the business would receive an automatic denial; current law sets a 180-day review period and requires the application be granted if the commission takes no action.
It’s in this section that the bill makes some of the most dramatic changes to the 704B process. The bill reverses current law — requiring the commission to grant an application if it is found “contrary” to the public interest — to requiring the commission to determine whether the application is in the public interest; a minor tweak in wording that raises and asks companies to prove that their exits benefit the public, as opposed to not actively harming the existing system…
This article was originally written by Riley Snyder and published on thenevadaindependent.com
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