Utility NV Energy Says Implementing Electric Choice In Nevada Would Cost $5-7 Billion

An "initial" estimate of "some" of the costs of implementing a proposed Constitutional Amendment to institute electric choice in Nevada range from $5 billion to $7 billion, NV Energy said in comments to the Nevada PUC

"Forcing a transition and adding other entities and participants will necessarily add transactions and costs that do not exist in the current provision of electric service to Nevadans. The Company has identified several categories of costs associated with the opening and operation of an unregulated retail market in Nevada. Below the Company provides a description of the following seven categories of costs: (1) stranded costs, (2) workforce impacts, (3) establishment of an ISO, (4) data clearing house and customer switch platform, (5) customer education programs, (6) investment to remove reliability must run conditions, and (7) impact to Sierra's gas customers," NV Energy said

"Should Nevadans abandon a regulated system designed to protect all electricity customers while providing solid reliability and well-below average prices and, instead, create an experimental market following a five-year transition that is by all accounts complex, costly and uncertain? While much is uncertain about this experiment, one thing is not. NV Energy will not be an option, as the Company will no longer sell electricity or provide related services to consumers," NV Energy said

"Nevada also would be the first state to open an unregulated retail market before the State is participating in a properly structured wholesale electric market," NV Energy said

"In short, Nevadans are being asked to constitutionally undo Nevada's regulated electric industry system that has reliably and efficiently served the State for more than a century in favor of an uncertain outcome. Nevadans thus face a critical choice -- to abandon the system that has provided a reliable and low-cost service that is essential to the health, safety and welfare of Nevadans, or undertake an undefined and risky experiment with a key input to the State's economy. There is a better way to advance the State's goal of providing low-cost electricity and adding renewable energy. As explained in more detail below, NV Energy is currently providing low cost electricity, with prices that are 17.1 percent below the national average. And, the Company is delivering more renewable energy to customers; indeed, NV Energy has developed a plan that, over the next few years would double renewable energy capacity while lowering overall costs," NV Energy said

"NV Energy also plans to add significant amounts of renewable energy in a way that helps the Company continue to diversify its generation portfolio to control costs, contributes to Nevada's economic growth, and improves Nevada's tax base. Important to this push for more renewable energy is the positive physical hedge these resources play," NV Energy said

NV Energy's plan to continue as the monopoly provider and double renewable energy capacity, "provides a less risky and lower cost approach lowering electricity costs, to advancing renewable energy, supporting the State's economic growth, and meeting consumer needs in Nevada," NV Energy said