Nevada Legislature Passes Bill Allowing For Caps On Competitive Supply Load

Subjects Applications For Competitive Supply To Public Interest Standard

Competitive Supply Customers Subject To New Fees

June 10, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Both houses of the Nevada legislature have passed SB547, which imposes new requirements on customers taking competitive electric supply. The bill has been enrolled and awaits action by the governor

Most notable is that the bill provides that, as part of their integrated resource planning, utilities shall include in the plan a proposal for annual limits on the total amount of energy and capacity that eligible customers (competitive supply customers) may be authorized to purchase from providers of new electric resources (competitive suppliers) through transactions approved by the Commission pursuant to an application submitted pursuant to NRS 704B.310 on or after May 16, 2019.

The utilities' proposed annual limits on competitive supply shall include, among other things, "proposals to ensure the stability of rates and the availability and reliability of electric service."

In considering whether to adopt a cap on competitive supply load, the PUC shall consider whether the proposed annual limits:

(a) Further the public interest, including, without limitation, whether the proposed annual limits promote safe, economic, efficient and reliable electric service to all customers of electric service;

(b) Align an economically viable utility model with state public policy goals; and

(c) Encourage the development and use of renewable energy resources located in this State and, in particular, renewable energy resources that are coupled with energy storage.

The annual competitive supply load limits shall not apply to energy and capacity sales to an eligible customer if the eligible customer:

(a) Was not an end-use customer of the electric utility at any time before the effective date of the bill; and

(b) Would have a peak load of 10 megawatts or more in the service territory of an electric utility within 2 years of initially taking electric service.

The law sets a new timeline for customers to file applications at the PUC to take competitive supply. The eligible customer must file an application with the Commission between January 2 and February 1 of any year, and not later than 280 days before the date on which the eligible customer intends to begin purchasing energy, capacity or ancillary services from the competitive provider

The bill modifies the standard under which the PUC shall evaluate customers applications to take competitive electric supply

Under the bill, in order for a competitive supply application to be granted, the PUC must determine that granting the application will be, "in the public interest." Under current law, competitive supply applications may be granted as long as such approval is not "contrary" to the public interest

In making a determination concerning the public interest, the PUC shall consider, among other things, whether the electric utility that has been providing electric service to the eligible customer will "experience" increased costs as a result of the customer taking competitive supply. Currently, the law only requires consideration of whether the utility will "be burdened by" any increased costs

In making a determination concerning the public interest, the PUC shall also consider whether any remaining customer of the electric utility will pay increased costs for electric service or forgo the benefit of a reduction of costs for electric service as a result of the proposed transaction

Apart from legacy customers, the bill subjects competitive supply customers to their load-ratio share of the costs associated with the electric utility’s obligations that were incurred as deviations from least-cost resource planning pursuant to various statutes including, without limitation, costs incurred to satisfy the requirements of NRS 704.7821 and implement the provisions of NRS 701B.240, 701B.336, 701B.580, 701B.670, 701B.820, 702.160, 704.773, 704.7827, 704.7836, 704.785, and Senate Bill No. 329 and Assembly Bill No. 465 of the 2019 Legislative Session.

An eligible customer who: (a) was not an end-use customer of the electric utility at any time before the effective date of this act; and (b) would have a peak load of 10 megawatts or more in the service territory of an electric utility within 2 years of initially taking electric service, is required to pay only those costs, fees, charges or rates which apply to current and ongoing legislatively mandated public policy programs, as determined by the Commission.

The bill authorizes the PUC to limit the number of times a customer may apply to take competitive supply, and to develop rates for customers seeking to return to bundled service. The Commission shall order such terms and conditions as the Commission deems necessary and appropriate to ensure that the purchase of bundled electric service from an electric utility does not harm the existing customers of the electric utility

The bill also subjects competitive suppliers to a licensing requirement at the PUC

Under the bill, competitive suppliers would also be subject to various assessments currently paid by the utilities

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