MINUTES OF THE
SENATE Committee on Natural Resources
Seventy-First Session
April 6, 2001
The Senate Committee on Natural Resourceswas called to order by Chairman Dean A. Rhoads, at 1:30 p.m., on Friday, April 6, 2001, in Room 2144 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Senator Dean A. Rhoads, Chairman
Senator Lawrence E. Jacobsen, Vice Chairman
Senator Mike McGinness
Senator Mark A. James
Senator Raymond C. Shaffer
Senator Maggie Carlton
COMMITTEE MEMBERS ABSENT:
Senator Bob Coffin (Excused)
STAFF MEMBERS PRESENT:
Fred W. Welden, Committee Policy Analyst
Heather Miller, Committee Secretary
OTHERS PRESENT:
Julie A. Wilcox, Lobbyist, Southern Nevada Water Authority
Charles K. Hauser, Lobbyist, Las Vegas Valley Water District, and Southern Nevada Water Authority
George Caan, Director, Colorado River Commission
Fred J. Schmidt, Lobbyist, Southern Nevada Water Authority
Daniel C. Musgrove, Lobbyist, City of Las Vegas
Colleen A. Wilson-Pappa, Lobbyist, Clark County
Kimberly J. McDonald, Lobbyist, Management Analyst, City of North Las Vegas
Richard W. Wilkie, Lobbyist, City of Henderson
Robert L. Crowell, Lobbyist, Sierra Pacific Power Company, and Nevada Power Company
Joyce A. Newman, Lobbyist, President, Utility Shareholders Association of Nevada
Bryan Gresh, Lobbyist, Clark County Regional Flood Control District
Gale Fraser, II, P.E., General Manager and Chief Engineer, Clark County Regional Flood Control District
Carole Vilardo, Lobbyist, Nevada Taxpayers Association
Irene E. Porter, Lobbyist, Executive Director, Southern Nevada Home Builders Association
Tom Stephens, Director, Nevada Department of Transportation
Chairman Rhoads opened the hearing on Senate Bill (S.B.) 211.
SENATE BILL 211: Expands authority of Colorado River commission to provide electric services to political subdivisions. (BDR 58-633)
Julie A. Wilcox, Lobbyist, Southern Nevada Water Authority (SNWA), testified in support of S.B. 211 since the SNWA had sponsored it. She asked that some of her colleagues come forward to explain some of the implications of S.B. 211 should it pass.
Charles K. Hauser, Lobbyist, Las Vegas Valley Water District, and Southern Nevada Water Authority (SNWA), testified on the amount of energy needed to pump water. He explained it is not possible to have serviceable water utilities without a great deal of power behind the pump. He then explained how problematic it is to extract water from Lake Mead. He said 95 percent of the water Southern Nevada uses comes from the Colorado River, and must be pumped 1000 feet up from this water source to the residential areas. He stressed the key issue is reliability, and that power must be available at all times to ensure constant water access. Mr. Hauser explained the SNWA chose the Colorado River Commission (CRC) over all of the other power suppliers because it is a loop system that offers the most reliability. He mentioned the SNWA saved $13 million in buying power from the CRC last year, versus a lower savings earned had they chosen the (Nevada Power Company) power company. He said the SNWA wants to let the Las Vegas Valley Water District pump in the Las Vegas Valley and other political subdivisions, if it wants to buy its power from the CRC.
George Caan, Director, Colorado River Commission, testified in support of S.B. 211 and gave a brief background on the CRC and how this issue has evolved. He reiterated that power reliability for the SNWA is essential and the CRC was capable of providing such. He said one of the benefits of the process, with respect to the local governments, is that the review process is open to public scrutiny. He gave an example of the SNWA board, which is composed of all of the purveyor members, which sees all the power procurement deals and has to ratify and approve them. During these deal appraisals, the CRC board would also get a chance to peruse and discuss them, as would the public, he said. Mr. Caan said he came before the committee for the review of the CRC’s budget and for the authority for the commission to spend.
Chairman Rhoads asked Mr. Caan how long the CRC has been selling power. Mr. Caan answered the CRC has been selling power for over 50 years. Chairman Rhoads asked if the SNWA has always saved money dealing with the CRC, as opposed to the Nevada Power Company. Mr. Caan answered that the $13 million (and the $20 million this year) savings for the SNWA is based on several things. Chairman Rhoads asked what percentage the CRC serves now. Mr. Caan responded that between all available types of power, about 750 megawatts of power are available for delivery. Chairman Rhoads asked how much power was necessary to service the Clark County area. Mr. Caan deferred the question to another colleague.
Fred J. Schmidt, Lobbyist, Southern Nevada Water Authority, testified the power necessary for Nevada is comprised of a variety of sources. He said the entire load of power distributed to Nevada, including all suppliers, equals about 4500 megawatts. He explained what has happened in the last several years is the relationship between water and power has been better understood and the state decided to open the market to competition. He said it would be beneficial for the consumer if the water and power industries can work together to create a collective lower cost. He said another thing S.B. 211 states is that the deal would not be under the jurisdiction of the Public Utilities Commission of Nevada (PUCN). He also mentioned the CRC was not under the jurisdiction of the PUCN, but under that of the committee and other elected boards.
Chairman Rhoads asked if S.B. 211 were to pass, if they would allow Nevada Power Company to continue to get 50 percent of the total. Mr. Caan answered the contract they had with Nevada Power Company will last until the year 2017, under current law, which also entitles each utility company with this contract the right to renew once. Chairman Rhoads then asked where they plan to get new power for customers since it sounds as though the current source is maxed out. Mr. Caan answered the SNWA has over a dozen enabling agreements with power companies throughout the western states. Chairman Rhoads verified if S.B. 211 passed, the SNWA could sell power to anyone in the state. Mr. Caan affirmed any political subdivision would have the ability to procure power, if they so chose.
Mr. Schmidt offered clarification on the matter, stating the amount of load that could be sold to political subdivisions would not be that great. He also added it would be a gradual process.
Daniel C. Musgrove, Lobbyist, City of Las Vegas, also testified in support of S.B. 211, stating Las Vegas is required to secure and provide affordable energy. He said last year the city spent about $7.5 million for electrical, with the largest use being the wastewater treatment plant. He stated the Nevada Power Company has been an outstanding provider for Las Vegas, but he said the city might have problems in the future securing power at affordable rates. He said the city was committed to looking for the best and most reasonable price on the market, which may or may not be Nevada Power Company, but the option should stay open.
Colleen A. Wilson-Pappa, Lobbyist, Clark County, testified in favor of S.B. 211, echoing Mr. Musgrove’s testimony that this is enabling legislation. She said it would provide Las Vegas with the option of finding the most reasonable provider.
Kimberly J. McDonald, Lobbyist, Management Analyst, City of North Las Vegas, testified in support of S.B. 211, also stating it was enabling legislation. She echoed the bill would provide local governments with options to work with the CRC to provide electric services.
Richard W. Wilkie, Lobbyist, City of Henderson, testified in support of S.B. 211.
Robert L. Crowell, Lobbyist, Sierra Pacific Power Company, and Nevada Power Company, testified in opposition to S.B. 211, stating this legislation carries long-range policy implications. He then read from a prepared testimony provided for the committee (Exhibit C).
Senator James mentioned he had some concerns that he wanted answered by the testifiers.
Joyce A. Newman, Lobbyist, President, Utility Shareholders Association of Nevada, responded to Senator James’ questions, informing him S.B. 211 would allow the SNWA and the CRC to engage in a competitive market. She also answered Senator James’ concern if this would permit a government agency to compete with a private business. She said shareholders have a special interest in S.B. 211 and what it will do to the stock market. She asked the committee to consider the impact on the people she represents when discussing S.B. 211. She echoed similar concerns of Mr. Crowell about S.B. 211 overturning previous legislation.
Chairman Rhoads asked Mr. Schmidt if there were many government utilities in other states that compete with private companies. Mr. Schmidt answered about 28 percent of customers nationwide are served by public power. Mr. Schmidt also addressed Senator James’ concerns. He said the SNWA is trying to work with the power company, not against it.
Senator James suggested clarifying the language to avoid any competitive wording. Mr. Schmidt replied that might not be necessary. A discussion ensued between Senator James and Mr. Schmidt on the relationship between the water and power companies. Mr. Schmidt explained the relationship between the SNWA and the CRC is more than just a necessity, but is highly beneficial to each company.
Ms. Wilcox said language could be added based on documents and language formulated by the SNWA. She also reiterated this was an enabling act. Mr. Schmidt said he understood Senator James’ concern, and believed S.B. 211 could be consistent with improving the situation through competition.
Senator McGinness asked about the prior mention of reliability, and asked if the Nevada Power Company had given notice to any political entity in Southern Nevada that it would not be able to serve this summer. Mr. Schmidt replied reliability is an issue of critical importance to water supply. He said last summer SNWA was curtailed in its operation 27 different days. He said that type of problem becomes difficult to manage.
Mr. Caan said the CRC has not indicated an issue related to reliability. He said the CRC has kept an open dialogue with the water purveyors, should a reliability problem surface. Mr. Caan answered Senator McGinness that reliability has not been raised as a problem to date. Senator McGinness asked if that meant there would be no rolling blackouts. Mr. Caan responded no such guarantee could be made in the electrical field, and gave a brief explanation on why. Senator McGinness asked if the $13 million and $20 million savings were products of not having to meet some of the responsibilities the private companies do because of regulation. Mr. Schmidt answered the calculation on the savings is stimulated by the planning and partly due to the joint efforts of the CRC and the SNWA. Senator McGinness and Mr. Schmidt discussed power supplies and sales.
Chairman Rhoads asked about needing no renewable energy for the public company versus the private company having 1 percent. Mr. Schmidt answered there had not been any new renewables built. He said renewables are essential for power diversity and important to the future.
Chairman Rhoads stated S.B. 211 would be transferred to a work session on Wednesday, April 11. Chairman Rhoads closed the hearing on S.B. 211 and opened the hearing on S.B. 267.
SENATE BILL 267: Makes various changes regarding flood control and local drainage. (BDR 48-1117)
Bryan Gresh, Lobbyist, Clark County Regional Flood Control District, testified in support for S.B. 267, reading from a prepared statement (Exhibit D).
Gale Fraser, II, P.E., General Manager and Chief Engineer, Clark County Regional Flood Control District, testified in support of S.B. 267, stating he and Mr. Gresh had several amendments the committee might want to consider (Exhibit E).
Carole Vilardo, Lobbyist, Nevada Taxpayers Association, testified in support of S.B. 267, as amended.
Irene E. Porter, Lobbyist, Executive Director, Southern Nevada Home Builders Association, testified in support of S.B. 267, as amended. She said she and Ms. Vilardo had shared concerns over the original bill, but the combined efforts with Mr. Gresh and Mr. Fraser produced an acceptable revision.
Tom Stephens, Director, Nevada Department of Transportation (NDOT), testified S.B. 267, as amended, would not require any fiscal note from the NDOT, or have any impact on the state. He said if S.B. 267 was not amended he would vigorously oppose it.
Chairman Rhoads closed the hearing on S.B. 267 and asked for a motion.
SENATOR JAMES MOVED TO AMEND AND DO PASS S.B. 267.
SENATOR JACOBSEN SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Rhoads opened the work session on S.B. 358.
SENATE BILL 358: Revises provisions relating to lease of state land for residential purposes. (BDR 26-396)
Fred W. Welden, Committee Policy Analyst, gave a brief overview of S.B. 358 and its goal. He said the bill would authorize the administrator of the Division of State Lands (of the State Department of Conservation and Natural Resources) to lease residential property owned by the state to state officers at less than fair market value in certain circumstances.
SENATOR JAMES MOVED TO DO PASS S.B. 358.
SENATOR MCGINNESS SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
*****
Chairman Rhoads adjourned the meeting at 2:50 p.m.
Heather Miller,
Committee Secretary
APPROVED BY:
Senator Dean A. Rhoads, Chairman
DATE: