MINUTES OF THE meeting
of the
ASSEMBLY Committee on Natural Resources, Agriculture, and Mining
Seventy-Second Session
April 9, 2003
The Committee on Natural Resources, Agriculture, and Miningwas called to order at 1:39 p.m., on Wednesday, April 9, 2003. Chairman Tom Collins presided in Room 3161 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
Note: These minutes are compiled in the modified verbatim style. Bracketed material indicates language used to clarify and further describe testimony. Actions of the Committee are presented in the traditional legislative style.
COMMITTEE MEMBERS PRESENT:
Mr. Tom Collins, Chairman
Mr. Jerry D. Claborn, Vice Chairman
Mr. Kelvin Atkinson
Mr. John C. Carpenter
Mr. Chad Christensen
Mr. Marcus Conklin
Mr. Jason Geddes
Mr. Pete Goicoechea
Mr. John Marvel
Mr. Bob McCleary
Mr. Harry Mortenson
Ms. Genie Ohrenschall
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
Mr. Lynn Hettrick, Assemblyman, District No. 39
STAFF MEMBERS PRESENT:
Linda Eissmann, Committee Policy Analyst
Erin Channell, Committee Secretary
OTHERS PRESENT:
Pam Wilcox, Administrator, State Lands Registrar, Division of State Lands, Division of Conservation Districts, Nevada Department of Conservation and Natural Resources
James Settelmeyer, Settelmeyer Ranches Inc.; Carson Valley Conservation District; Chairman, Nevada State Conservation Commission
Kevin Piper, District Manager, Dayton Valley Conservation District
Paul Pugsley, Carson Valley Conservation District
Doug Hunt, Chief, Habitat Bureau, Division of Wildlife, Nevada Department of Conservation and Natural Resources
Tim Carlson, President, Carlson and Associates; Global Renewable Energy Partners
Judy Stokey, Director, Public Policy, Nevada Power™ and Sierra Pacific™ Power
Dave Noble, Assistant General Counsel, Public Utilities Commission, State of Nevada
Mark Harris, Staff, Public Utilities Commission, State of Nevada
Joe Johnson, Government Affairs Consultant Sunrise Sustainable Resources; Toiyabe Chapter, Sierra Club
Ellen Allman, Caithness Energy Operating Company
Alfredo Alonso, Government Affairs Manager, Lionel Sawyer & Collins, representing Caithness Energy Operating Company
Chairman Collins:
The Assembly Committee on Natural Resources, Agriculture, and Mining is now called to order. [Roll was called.] We do have a quorum; we can start this meeting. We have five outstanding bills that we have not taken action on or have not been withdrawn. This is our last meeting before the April 11, 2003, deadline; barring any kind of emergency we might have to call. We’re going to open the hearing on the most simple, confusing bill, sponsored by Minority Leader Hettrick, A.B. 215.
Assembly Bill 215: Revises provisions governing conservation districts. (BDR 49-780)
Chairman Collins:
Would you like to come forward? [Comments about the availability of copies of Assemblyman Hettrick’s proposed amendments.] Do you want Ms. Wilcox to come up with you? I understand there are two amendments and both are necessary.
Assemblyman Lynn Hettrick, District No. 39 (Douglas County and portions of Carson City and Washoe County):
[Introduced himself] I apologize for being late. You‘ll shortly have a copy of the amendment (Exhibit C) that was agreed to. There was some question about what it did, but I think the parties are now comfortable with the language and what it does. The only other request was the request you had the first time, which was to add the words “in furtherance of the purposes and provisions of this chapter,” under Section 1, where it says “Chapter 548 of NRS.” (Exhibit D provided by Pam Wilcox) The new language is “In addition to other powers . . .” we would just add that language (Exhibit C); it’s a simple change you requested the first time.
Chairman Collins:
Where are you putting “other powers”?
Assemblyman Hettrick:
“. . . in furtherance of the purposed and provisions of this chapter . . .”
Chairman Collins:
All you wanted to add were just more words? We’re only hurrying because we have two days; then we have to make sure it gets printed.
Assemblyman Hettrick:
What this amendment does is what Assemblyman Carpenter questioned and we decided we should make clear. The counties can decide whether or not land owned by the conservation districts is indeed going to be tax-free or they would be asked or required to pay taxes. This leaves it to the counties to decide that. I spoke with Douglas County this morning; they have looked at it and are perfectly happy with it. They said, frankly, that if we were going to do a “payment in lieu of,” we’d probably say to keep the weeds off and that’s your “payment in lieu of,” because it’s a lot cheaper if you do it than if we have to do it. They said they were perfectly satisfied with the language and that they were comfortable with the amended bill.
Chairman Collins:
That’s in Section 3, the “in lieu of . . .”?
Assemblyman Hettrick:
Correct.
Chairman Collins:
That’s why you say you thought it might be confusing, because it’s a whole page to say one thing?
Assemblyman Hettrick:
Basically, that’s what it is, how it works.
Chairman Collins:
Pay the bill by mail; “payments in lieu . . .” are due . . . It’s a lot about making payments, Assemblyman Hettrick.
Assemblyman Hettrick:
We need to make sure they pay if we’re going to collect the tax. Since Assemblyman Carpenter walked in, I would just repeat for the record and his benefit, we’ve done what his concern was and what he questioned when he looked at this bill the first time. We made it so the county can decide whether or not a conservation district would pay property taxes. It would be in the form of “payment in lieu of taxes,” but it would still be a payment and they could decide whether or not it had to be met.
Chairman Collins:
Assemblyman Hettrick, in Section 3, subsection 3(b), it says “Mail . . .” They can’t e-mail or electronic mail – they have to mail. Do we need to make sure we say “mail”? Are we going to get into that, or is that going to be taken care of somewhere else?
Assemblyman Hettrick:
Ms. Wilcox pointed out, it says, “in the same manner as required for . . . an individual tax bill.” If we have an allowance due, everything else should be covered.
Chairman Collins:
Do you want to be on the record about your amendment?
Pam Wilcox, Administrator, State Lands Registrar, Division of State Lands, Division of Conservation Districts, Nevada Department of Conservation and Natural Resources:
We have reviewed the amendment and while we would still rather not have districts have to pay anything, this is a fair way to do it. It’s up to the counties; the two amendments (Exhibit C and Exhibit D) work well together and we’re ready to go.
Chairman Collins:
Committee, do you have any questions? We have a couple of conservation district people here, and I’d like them to be on the record as supporting this, just for legislative history.
James Settelmeyer, Settelmeyer Ranches Inc.; Carson Valley Conservation District; Chairman, Nevada State Conservation Commission:
[Introduced himself] I think we’ve accomplished all the goals that have been directed about the idea of setting forth the ability to pay taxes. We’re completely in support of this. We feel that the opportunity for conservation districts to own real property or interests in real property is very beneficial for the conservation and protection of the natural resources of the state of Nevada.
Kevin Piper, District Manager, Dayton Valley Conservation District:
[Introduced himself] On behalf of the Dayton Valley Conservation District, I’d like to convey to you and your Committee that we support the proposed amendments (Exhibit C) to A.B. 215 along with the amendments provided by Ms. Wilcox today (Exhibit D). We’re ready to go on with this.
Paul Pugsley, Carson Valley Conservation District:
[Introduced himself] We’re in support.
Assemblyman Carpenter:
Assemblyman Hettrick, I was wondering about the amendment, Section 4, subsection 2, where it talks about the real property acquired after July 1 is exempt from taxation. How does that work in with Section 3, which talks about the county commissioners and they can do an “in lieu of taxes” on it?
Assemblyman Hettrick:
What we’re saying here is that the districts are exempt from taxes, but in Section 3 we say the county commissioner can pay “in lieu of . . .” That’s what we’re doing.
ASSEMBLYMAN MARVEL MOVED TO AMEND AND DO PASS A.B. 215.
ASSEMBLYMAN CARPENTER SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Claborn was absent for the vote.)
Chairman Collins:
Thank you very much; we are working to get this bill going. The next bill we’re going to have will start at two o’clock; we’ll recess until then. [Recessed at 1:49 p.m. Reconvened at 2:27 p.m.] Assembly Natural Resources, Agriculture, and Mining is back in session. We’re going to open the hearing on A.B. 372.
Assembly Bill 372: Requires person who develops or operates renewable energy generation project to obtain permit from Division of Wildlife of State Department of Conservation and Natural Resources under certain circumstances. (BDR 45-908)
Chairman Collins:
Do we need to hand out the amendment? [It was indicated to do so.] Then you can discuss the changes? It’s my understanding that you want to amend it to take out the mil tax; it’s only renewable energy, only after next October, and that you want to keep in the permit process and have either a one-time assessment or an annual assessment, depending on what that is by regulation. Anything else?
Doug Hunt, Chief, Habitat Bureau, Division of Wildlife, Nevada Department of Conservation and Natural Resources:
[Introduced himself] That’s correct. It also has a mechanism to exempt commercial use less than five megawatts, to answer the concerns over the small hydroelectrics. We would also like to delete under Section 2, subsection 1(b) (Exhibit E provided by Tim Carlson), the language “or may cause” relative to the death of any wildlife in this state as was expressed by Assemblyman Carpenter.
Chairman Collins:
In Section 2, subsection 1(b), “causes or may cause . . .” you want to remove lines 34 through 37, or just “may cause”? [Mr. Hunt indicated removal of “may cause.”] Just those two words?
Doug Hunt:
Correct. Of Section 2, subsection 7, “annual assessment” would read “one time assessment.” Line 4-34 . . .
Chairman Collins:
Instead of annual, it would be one-time?
Doug Hunt:
Correct. And then at line 4-36, instead of the mil tax, it would read, “not to exceed $100 for each megawatt . . .”
Chairman Collins:
“. . . for each megawatt hour of net energy . . .” The first part is on the front page that “initiates production on or after October 1, 2003” of renewable energy – “The Commission shall establish broad policies . . .” and that’s existing proposed language – permits required – on line 3-30 we are keeping “initiates production on or after October 1, 2003.” I have a question on “initiates productions.” Some of these plants could be in process?
Doug Hunt:
Yes, sir.
Chairman Collins:
Are you going after them with this?
Doug Hunt:
Not under this, if they’re in production prior to October 1, 2003, and then they have a year to obtain a permit, if that’s the case, to 2004. This is only on renewables.
Chairman Collins:
Only on renewables that have broken ground on construction?
Doug Hunt:
If they’re producing energy prior to October 1, 2003, then they would not fall under this legislation. If they come into production after October 1, 2003, then they would fall under this regulation.
Chairman Collins:
Are there any plants scheduled to open by then?
Doug Hunt:
I don’t believe so, but I could check; I have a list from the PUC (Public Utilities Commission). There are no plants scheduled to open on the list I got from Mr. Mark Harris, PUC, yesterday.
Chairman Collins:
Five megawatts is a good number? We don’t need to be at six, three, or eight?
Doug Hunt:
Five is a good number.
Chairman Collins:
Line 4-34, we went to a one-time assessment; line 4-36 went to “not to exceed $100 for each megawatt/hour of net energy . . .”
Doug Hunt:
That should be “megawatt” only not “megawatt/hour” scratch “hour.”
Chairman Collins:
“. . . developing or operating a renewable energy generation project . . . October 1, 2003,” that’s when it takes effect.
Doug Hunt:
That’s correct.
Assemblyman Geddes:
Pardon me if I’m being redundant on something that was testified to on Monday. As I understand all the funding now, if you were going to build a ten‑megawatt wind facility in Ely, it would cost a $500 application fee and $1000 to cover the costs of the NDOW (Nevada Division of Wildlife) evaluation for the first-time review. That would be it, correct?
Doug Hunt:
Correct.
Assemblyman Geddes:
Why is it just renewable, not any project? Are standard energy projects – if I wanted to put in a natural gas plant, would that be covered elsewhere? Is that why it’s not here?
Tim Carlson, President, Carlson and Associates; Global Renewable Energy Partners:
[Introduced himself] At the request of the Chairman, we had discussions with fossil fuel generating companies. They had a real problem with being included at this time. I think we need to set up a pattern or process for renewable industries, which are fairly new in the state. We need to have some formation and formulation of the process; this is what we’re trying to accomplish. I think in the future it behooves the Division to come back and explore that in some form or another. They are impacting the wildlife of this state and they are affecting the activities of the Division. Right now, in order to get consensus, this is what we’re proposing.
Assemblyman Geddes:
You’re a renewable energy developer, Mr. Carlson. Do you see this being cost prohibitive for you to move forward on your projects?
Tim Carlson:
No, I don’t. As a matter of fact, I think this is why we have been working with the Division (Nevada Division of Wildlife), in regards to this issue, in formulating and creating the partnership. It’s much better to have a state agency as your partner than as a state agency that’s separate from it, we’re bringing together, in the process, and this allows us to do that. They become a partner, they get a return on this, and we work together to make this thing happen.
Assemblyman Geddes:
Relating to the five megawatts, and in looking at some other alternative energy bills – I’ve been looking at one project that’s been hanging out there, and that’s the Barrick [Mining] project to put in hydro in their dewatering line. I know they’re looking at around eight to ten megawatts for their project. They would be installing this into an existing dewatering line that they have for a pit. Would that fall into this category then, if they haven’t already initiated that process? I think they were waiting for some definitions out of this Legislature to go forward. I know they were in the eight-megawatt range, but they already have existing facilities they’re going to install into. Would they be covered or not?
Doug Hunt:
I believe that process you’re talking about is covered under our artificial pond permitting process, so would not fall under this.
Assemblyman Geddes:
If they were going to put a drop into an existing water line – if they were going to put a generator into a water line, you wouldn’t have to do the assessment?
Doug Hunt:
Correct.
Tim Carlson:
I would add to that that if an application is filed, which I think would be the appropriate way of going, then the Division would review that application, see that it’s not a problem to wildlife because it’s going into an existing pipe, and that there are no adverse activities going on around it. They would rule and return the fee amount to the developer.
Assemblyman Geddes:
In an eight-megawatt facility, they would pay the $800 and $500 application fee, you would assess it and give them back the $800? Is that what you said?
Doug Hunt:
We would probably review that process, and however the regulations were finalized, we would follow those regulations so that we would only have one process in place for each operation. We wouldn’t charge them for an industrial artificial pond permit and also for an addition to that, as you indicated.
Assemblyman Geddes:
So you believe they would already be covered and they wouldn’t have to go through this process.
Doug Hunt:
I believe so.
Assemblyman Goicoechea:
I would argue, Assemblyman Geddes, that the language is pretty explicit. If they aren’t in production by October 1, 2003 – they clearly wouldn’t be in production unless they were going to hurry it along. The question I had, Mr. Hunt or Mr. Carlson, under Section 2, subsection 8, it says, “If the holder of a permit issued pursuant to this section is required by law or regulation of this state or the Federal Government to mitigate . . .” those impacts to wildlife – What gives me heartburn with the bill, is that, technically, especially on public lands, it’s the federal agencies that will regulate. I still don’t see how we’re avoiding that duplication.
Another thing that really gives me heartburn is NDOW (Nevada Division of Wildlife) regulating on private property. I guess that covers it. I have a hard time with the bill. I do appreciate your efforts to take it up to the five megawatts. It probably will address most small ventures, especially in rural Nevada. Even to the extent you’re talking of Barrick, it’s very close. It’s not a lot of money, it’s just that I’m concerned about another level of bureaucracy that we’re putting in place with this legislation.
Assemblyman Carpenter:
Do you believe that this does affect private property, if this project is all on private property?
Doug Hunt:
Yes.
Chairman Collins:
To the limits that you’re allowed to go?
Doug Hunt:
Just to the limits under this permitting process.
Assemblyman Goicoechea:
Technically, what it would require is that if the facility was on private property, it would require the permit.
Chairman Collins:
Just like a building permit or anything else you would do.
Doug Hunt:
Right, or an NDEP (Nevada Department of Environmental Protection) permit, or any other type of permit.
Assemblyman Goicoechea:
I don’t mind going to the county for the building permit; I have a little trouble going to NDOW (Nevada Division of Wildlife).
Judy Stokey, Director, Public Policy, Nevada Power™ and Sierra Pacific™ Power:
[Introduced herself] I know you’re in work session. Is it appropriate for me to make a statement? I signed in neutral to the bill. My testimony is just going to focus mainly on the permitting process. Last session, we worked with Senator Titus on an expediting bill, S.B. 362 of the Seventy-first Legislative Session, that basically she wanted to make sure we could expedite the permitting of facilities but at the same time making sure we took care of all the environmental concerns. That bill passed, and I think this bill might harm that to a certain degree.
It currently takes 24-36 months for us to permit a new facility and we do work with many agencies while we’re doing that, including NDOW, federal and state agencies, and the PUC (Public Utilities Commission) extensively (Exhibit F). There’s a representative here who can address that. These agencies all play a significant role in our permitting process, and we do do mitigation and deal with them extensively while we’re going through this process.
In regards to the tax issue in the bill, we’ve always been a very reliable tax collector from our customers for things that the state has needed, and we’ll continue to do that if that’s what you want to do, but our main concern with this bill is the permitting. We don’t want to add an extra step to any of the people who are building facilities in the state. We want to get them up and running. We’re already dealing with these agencies in our EIS (environmental impact statement) and EA (environmental assessment) permitting process.
Chairman Collins:
If you don’t like it, you don’t care if it’s fossil fuel or just renewable?
Judy Stokey:
We don’t like it at all. We don’t want it on fossil fuels; we don’t want it on renewables either.
Assemblyman Mortenson:
Ms. Stokey, I think we heard testimony before that this process is really all settled, working, and doing fine. It’s subject to the jurisdiction of the PUC (Public Utilities Commission); the PUC works with NDOW (Nevada Division of Wildlife) when they’re doing their EIS and NEPA (National Environmental Policy Act) process. I guess I can’t understand why we even have this bill in here. It looks like it’s a method of getting money to NDOW, but whenever you give money to NDOW, you take it out of somebody else’s pocket. I understand NDOW probably needs some additional money, but I don’t see the need for this bill. Maybe somebody could explain it to me.
Chairman Collins:
Mr. Hunt, could you explain that last question to Assemblyman Mortenson?
Assemblyman Mortenson:
It seems to me that this process, the process for permitting these facilities, exists already. It is run, essentially, by the PUC. The PUC goes, jumps over the hoops to make sure they take care of environmental concerns and everything. Why do we have this bill and why do we need it? I don’t understand.
Doug Hunt:
The PUC does have a process in place. In our experience in dealing with the process, it leaves much to be desired. The mitigation package leaves wildlife out, in a lot of cases. We feel that this would solidify wildlife’s needs in dealing with these projects.
Assemblyman Mortenson:
Ms. Stokey, do you feel the process leaves mitigation of wildlife problems out?
Judy Stokey:
In dealing with our facilities we’ve had good luck with the PUC in mitigating most of those problems, but we also deal with other federal and state agencies in dealing with that mitigation. We’re happy with the process.
Assemblyman Mortenson:
Those federal agencies mandate all kinds of care for wildlife and so on?
Judy Stokey:
I’m not sure specifically what they do. In our mitigation process we deal with them and try to address all of their concerns.
Chairman Collins:
Who is “them” and some of these agencies? Who are these agencies and how much do they cover? Also, Mr. Hunt, maybe you can tell us how much deals with wildlife and how much doesn’t.
Judy Stokey:
The agencies we deal with on the state and federal levels are numerous. I’d have to get you a whole list. Our main one is the PUC (Public Utilities Commission). We go through our EIS (environmental impact statement) situation, then we deal with all the conservation groups, and everyone has a process to submit their comments and concerns. We mitigate with that.
Chairman Collins:
Maybe we need the PUC to address wildlife. Mr. Noble, PUC, in your process, how do you address wildlife? Or do you? It’s an open question. Assemblyman Mortenson, here’s the Public Utilities Commission to tell you what they do with wildlife.
Dave Noble, Assistant General Counsel, Public Utilities Commission, State of Nevada:
[Introduced himself] We’re basically the clearinghouse for the construction permits. We don’t actually go out and do the environmental assessments; we depend on the various state agencies. I have Mr. Harris here who deals with the UEPA (Utility Environmental Protection Act) process in particular. We are basically the clearinghouse for the construction permits. The utility goes out, goes through the whole permitting process with the various other state and federal agencies, and local governments. We make sure they have got all their “Ps, Qs, and ducks in line.” [Chairman Collins said they just wanted to hear about the ducks.]
Judy Stokey:
I do have that list, if you want a list of all the different departments that we deal with.
Chairman Collins:
Who wants to tell us about ducks?
Assemblyman Goicoechea:
Sierra Pacific is presently building the Falcon/Gonder transmission line; it’s a 345 line.
Chairman Collins:
“345” means what?
Assemblyman Goicoechea:
345 kV (kilovolt) line – It’s the 345 kV line from Falcon to Gonder and Ely. The original alignment of that project was through McClusky Summit. They moved it because of sage grouse issues. There was a rancher in Diamond Valley that couldn’t get it moved off his property. He said they would move it a hundred miles for a chicken but they won’t move it a quarter of a mile for my house. The process does work for wildlife.
Chairman Collins:
They built a power line over the guy’s house? That’s illegal. [Assemblyman Goicoechea clarified it was not over his house.]
Assemblyman Goicoechea:
He only had 160 acres, and it was through the middle of 160 acres. I will say they did move that with pressure from the county commissioners.
Chairman Collins:
We’ve seen that happen a few times.
Assemblyman Goicoechea:
It was easier to move it for the chicken than it was for the house.
Chairman Collins:
That’s a federal endangered species. How about the duck? That’s one of the sensitive birds that we are developing more concern for.
Mark Harris, Staff, Public Utilities Commission, State of Nevada:
[Introduced himself] In the UEPA (Utility Environmental Protection Act) process, all of the intervening agencies that have comments come to us with them. Normally, in their comments there are all the different permits that are required by those agencies for the project to go forward. In that process there are usually extensive mitigation plans covering most of the wildlife species that are found in an environmental assessment (EA) or an environmental impact statement (EIS) that’s done for the project. All of those become compliance items that the PUC (Public Utilities Commission) puts forward in a compliance order. There’s no permit to construct, a UEPA permit, given until all those compliance items are fulfilled and completed. In other words, all the permit requirements for each of the agencies that have come forward on the project with –
Chairman Collins:
Which agency addresses the duck?
Mark Harris:
That would be NDOW (Nevada Division of Wildlife).
Chairman Collins:
They are currently in the process?
Mark Harris:
I know that in some BLM (Bureau of Land Management) permitting, they have had other types of wildlife, usually not the migratory waterfowl. I’m speaking of projects that have taken place in southern Nevada.
Judy Stokey:
I have a list of agencies and departments that we deal with; I will give this to your secretary (Exhibit F). It also gives you a chart on how long it takes us to permit facilities. Some of the list includes: Nevada Division of Environmental Protection, Nevada Division of Water Resources, Nevada Division of Wildlife, Nevada Division of State Lands, Nevada State Historical Preservation Office, Nevada Public Utilities Commission, all local governments, health departments, planning commissions, county commissioners, Bureau of Land Management, U.S. Fish and Wildlife Service, Army Corp of Engineers, and the U.S. Environmental Protection Agency.
Chairman Collins:
You said USFWS (U.S. Fish and Wildlife Service)? [She indicated that was correct.] On your list is the Nevada Division of Wildlife. Do you have them on your chart that shows how many days they take?
Judy Stokey:
They’re probably lumped in with some of the others.
Chairman Collins:
“Lumped in” meaning combined with?
Judy Stokey:
Exactly.
Chairman Collins:
You have to keep the Committee’s attention with some of the things said. How long do they take? [She asked if he wanted her to go through each one.] Go through the ones that deal with ducks. [She clarified the information he wanted was on the ones that were combined.]
Judy Stokey:
The federal environmental review process takes 12-18 months; that’s where a lot of those are combined. I do not have those broken down.
Chairman Collins:
You can’t tell me when a utility has applied to the Division of Wildlife and when they responded, or have any documentation of a response?
Judy Stokey:
I can go back and find a specific project and give you those dates. For this chart, we only have 12-18 months for all of that. Working with Senator Titus, we wanted them all to be going on at the same time so we didn’t take four or five years to build a plant.
Chairman Collins:
Their involvement doesn’t delay the process; it’s part of the process.
Judy Stokey:
It’s part of the process.
Chairman Collins:
If they were allowed, through this bill, to request a permit that would already be in the process, so they could be – why do they want to be funded for doing that process? Do you pay them a fee? Do you have it in your records that you already paid the Division of Wildlife for the permit process?
Judy Stokey:
I do not believe we pay them. I’d have to check. After the 12-18 months, then we go into the UEPA (Utility Environmental Protection Act) process. We file that and it takes quite a few months, but at the same time we’re going through our use permit at the local level, and then we go through our regional permitting process. Then we get our UEPA process about five months later, after all of those things have been approved. It takes a total of 24-36 months depending on the project.
Chairman Collins:
Do those projects include renewables?
Judy Stokey:
We have not personally built a renewable project. I would have to check on the renewables.
Chairman Collins:
So all of that is for fossil fuels. It doesn’t address at all what the time frame is for renewables, which is under a different bill.
Judy Stokey:
This is the UEPA (Utility Environmental Protection Act) process, for all utilities.
Chairman Collins:
For all of them or for private generators?
Judy Stokey:
I believe so.
Chairman Collins:
Which is not a utility.
Judy Stokey:
PUC (Public Utility Commission) would have to address that.
Chairman Collins:
A private generator is not a utility.
Mark Harris:
The time periods would be about the same for a private generator.
Chairman Collins:
That’s what I was looking for.
Joe Johnson, Government Affairs Consultant, Sunrise Sustainable Resources; Toiyabe Chapter, Sierra Club:
[Introduced himself] We supported the bill with amendment to include fossil fuels, or all generators. I think one of the reasons why we supported the bill was that clearly this is a money-generating process. When we supported S.B. 362 of the Seventy-first Legislative Session, we paid particular attention to environmental concerns, including NDOW (Nevada Division of Wildlife) in the process. The permit process is pancaked so that passing this bill will not facilitate or speed up the process. They can go to NDOW under the utility siting act. The siting act also includes all the ancillary services like Gonder/Falcon, where I believe there is some question whether this bill is expansive enough to cover transmission lines and other service facilities, which would be an issue.
Chairman Collins:
Transmission line meaning the 345 line?
Joe Johnson:
I wouldn’t put size on it. Our case would simply be from the producing facility to the nearest point of intertie with a main transmission facility. [Chairman Collins brought up generating facilities.] Our generating facility as the renewable. I’ve expressed, in the initial comments, the concern that the differential treatment for renewables, particularly one that’s assessing a fee, is something that we oppose. We do support that NDOW (Nevada Division of Wildlife) receive additional funding. That is what this bill essentially would do, in the process, unless it includes the fossil fuel people. I understand they would like to be left out. I think the renewables would like to be left out also.
Representing environmental groups, we are comfortable with the present UEPA (Utility Environmental Protection Act) process. We would encourage you, if you wish to support additional funding, to deal with that as a separate issue. It should be for all generating facilities, as well as for existing facilities, that have an impact on wildlife, particularly fossil fuel facilities, like coal plants, that emit mercury or other hazardous or semi-hazardous materials that are of concern, and that do have, under the strict liability that was included in the original bill, an ability to impact wildlife.
Assemblyman Mortenson:
Mr. Johnson, you represent the environmental entities. They are satisfied with the PUC (Public Utilities Commission) process; is that your statement?
Joe Johnson:
Yes, we participate extensively. The review process is adequate; we always think there are additional things that could be done. What is not addressed in the UEPA process, and you heard the representative from NDOW speak and the utility company represent is that they don’t get funded for their review and oversight. The people who do the EIS (environmental impact statement) and the studies, such as the impact of the wind, get paid and then submit the report to NDOW. NDOW has to do it out of the existing budget and staff. This bill would provide additional funding to supply staff. That’s why we supported it in the funding portion of it. As far as the overview and the ability to do things for the environment, the present process is workable.
Chairman Collins:
NDOW (Nevada Division of Wildlife), right now, does not receive funding for those processes. Other than maybe General Funds, no, they don’t get any funding, so it comes out of the fishing license tags. Is that what you said, Mr. Johnson?
Joe Johnson:
It comes out of boating and fishing licenses, trophy animals, federal funding, and a minor amount of General Fund money. This is a problem.
Assemblyman Carpenter:
I think that when any of these companies are required to do an environmental impact statement they have to hire some company to do all of those in depth analyses. A lot of that is not a true expense to NDOW because they have other people that are looking at that. They do have input but the actual on the groundwork is paid for by the company, like Sierra Pacific if they wanted to do one, or whomever.
Chairman Collins:
NDOW would just review it?
Joe Johnson:
Yes, that’s exactly correct. The major portion of the cost of an environmental study is borne by the applicant. What we’re addressing, and indeed the fairly small fee the amendment would request, is simply for the oversight and review of the studies, and perhaps defining what needs to be studied.
Chairman Collins:
You all have raised a bunch of questions. Could I get someone who would like to speak for renewable energy and someone who would speak for the current utility fossil fuel industry to come up so I can ask some more questions. I don’t know if these questions will connect to the bill or not, but I want to find out. These are just some generalized questions.
The State of Nevada has required that a percentage of energy generated in the state be renewable energy. Rather than providers of energy to our citizens being able to purely shop the world for the type of energy they want to provide, purchase, or generate, they must purchase a certain amount of renewable energy to provide. Is that correct, Ms. Stokey?
Judy Stokey:
Yes, that’s correct. We do have a renewable portfolio standard that was put into place last session that we are moving towards.
Chairman Collins:
Last session, we required a certain amount of renewable energy to be produced. If the renewable energy people build a plant in Nevada, do you have to buy it?
Judy Stokey:
No, we do not. We have an RFP (request for proposal) process and all the renewables bid into that; then we take the best contracts that we can to fit into our portfolio.
Chairman Collins:
Who provides these transmission lines? Is that borne by the utility or on the renewable energy company?
Judy Stokey:
I believe that that is part of the process in the bidding. They have to take into account getting those lines built.
Chairman Collins:
The utility has no burden or cost for a utility line from the renewable generation.
Judy Stokey:
I believe we would have a certain percentage of cost, but that’s going to be put into their price. When we bid them, it’s “apples to apples” and we have to compare them.
Chairman Collins:
With the new 500 line in southern Nevada, the utility bore the cost of that. You’re on the wrong end of this. Why don’t you charge up front for anything? Renewable energy – try to help me out on this – Order of Business 15, it looks like that’s where it’s going. From the renewable energy standpoint, would there be as much energy or impetus put into building renewable energy in Nevada without the law requiring the utilities to use renewable energy to those percentages passed by the former legislature?
Ellen Allman, Caithness Energy Operating Company:
My belief would be the answer to that would be “no.” There wouldn’t be as much impetus because renewable sells at a premium. If they didn’t have to purchase, there would be a good chance that they could find alternate sources of energy.
Chairman Collins:
Renewable energy is more expensive, is that what premium means?
Ellen Allman:
That’s correct. Typically, there is a slight premium or it is slightly more expensive. Can be, not always, but can be more expensive.
Chairman Collins:
Renewable energy can be more expensive than a traditional fossil or hydro fuel that some utilities use?
Ellen Allman:
That’s correct.
Chairman Collins:
Hydro – I’m not sure if that’s considered a renewable or not.
Ellen Allman:
It’s not at the moment. [Introduced herself as working for Caithness Energy Operating Company.]
Chairman Collins:
I’m trying to see if this has any bearing on this bill. The bill proposes a permitting process by the Division of Wildlife and a fee from renewable energy, at this point. Some people would like the fee to be on all energy.
Assemblyman Mortenson:
Mr. Alonso, do you feel comfortable with this bill or do you feel things are going fine they way they are?
Alfredo Alonso, Government Affairs Manager, Lionel Sawyer & Collins, representing Caithness Energy Operating Company:
[Introduced himself] As all of you know, we worked on the renewable energy portfolio very hard last session. I think the goal there was, in concert with the power companies, to come up with something, obviously, that did two things. One, that brought renewable energy to the forefront; and two, that helped with respect to some of the economic refortification of the rural counties. The attempt was to bring rural counties some of the benefits that renewables could bring.
Therefore I think, with respect to the public benefit, I think it was two-fold. It was enhancing the existing people, whether it be solar and other renewables like the Caithness people – geothermal – they’re obviously very involved with the rural counties. This bill adds another layer of regulation that I think hurts not only renewables, but I think it hurts the process. You already have to go through hoop after hoop after hoop. I think the goal here is to lower electricity. Basically, I think that’s the attempt. You don’t do it with this, unfortunately.
Chairman Collins:
When I was asking for a disclosure, Assemblyman Mortenson was asking Mr. Alonso to answer a question, but it was actually a representative of renewable energy that was answering the question. Correct? [Mr. Alonso indicated that was correct.] I wanted to make sure we covered it all while they were up here. First of all, they probably wouldn’t be doing this if we hadn’t passed the law last session. The Division of Wildlife is already studying them, without a permit or funding. The issue comes down to Division of Wildlife funding and permitting in a formal manner instead of an informal manner.
Assemblyman Marvel:
Mr. Carlson, in all honesty, and since I’m a supporter of renewable energy, without this bill can you still proceed with your energy development?
Tim Carlson:
Absolutely. There’s no need to have this bill other than to stratify the situation. Let me give you an example of what happened to an actual project in Nevada that caused us to rethink this issue. That was the Table Mountain site, in southern Nevada just on the other side of Sandy Valley. We were moving along developing the process on BLM (Bureau of Land Management) land. They were telling us what to do and how to do it, as the BLM does so frequently, and they were telling us that, “the Division of Wildlife is just one of the elements in the process. They’ll comment and we don’t need to be bothered with them, because their comments, we listen to, and then we do what we want to anyway.”
Those were exact words from the BLM (Bureau of Land Management). I knew better, but I wasn’t working on that project on a full-time basis. I recommended that they not adhere to the BLM recommendations. The company went forward and adhered to the consultant who was giving them that information.
We had to increase our cost of energy by over $500,000 in our bid of the RFP to Nevada Power, which increased our cost of energy by at least three-quarters of a cent per kilowatt hour, in relationship to our bid process. We lost out on the bid process due to the fact that we had an extra cost that we should have not had if we had been working closer with the Division of Wildlife. What I thought we ought to be doing here and in the future is bring the Division of Wildlife into the process in the beginning. Let every developer who comes to the state of Nevada learn right from the beginning that that’s what they need to do.
All these consultants who are helping these developers ought to know better than to only do what the BLM (Bureau of Land Management) tells them to do. That’s what they’re trained to do. They ought to know that there are state agencies out there that need to have their understanding and the response back to them as well as from the federal agencies. That’s what the problem is here. We, the developers, get in between the federal agencies and the state agencies, and we’re the one to get popped. There lies the issue. If they had a format, which is outlining this process, in this bill – [Clarified for Chairman Collins what “popped” meant: when two forces go at each other and what’s in between gets pushed.]
The process needs to be identified and laid out for a state agency to be a player. The UEPA (Utility Environmental Protection Act) process is doing that, granted, but you heard the list of all those state agencies. We had one comment back from our Ely project from state agencies. They don’t have the manpower, effort, or money to be able to respond quickly, or respond to the process until it gets to the last moment and you get the rug pulled from under you, the cost goes up, and you lose the project.
There needs to be something done, and maybe it’s an interim study that solves this problem. Something has got to be done to allow the state agencies to play a bigger role in the program.
Assemblyman Marvel:
I’m sure one of the concerns of my colleagues is do we really want just one state agency that is going to make the final decision on energy development?
Doug Hunt:
I’d like to address the PUC (Public Utility Commission) process. While we’re given the opportunity to comment, as Mr. Harris indicated, his process and the UEPA process identifies permits required by agencies under the process and helps to expedite that. This would simply be another one of those permits that would simply be covered by the PUC process. Currently, we only have, through the state clearinghouse, between 30 and 60 days, typically 30 days, to respond to these major projects. It’s very difficult with a staff of 200 people statewide. To address a comment about the consultants, the consultants come to us for the information that they in turn provide to the utilities.
Chairman Collins:
Did that help you, Assemblyman Marvel? The 30-day process would be in the 18-24 month period? It would not delay a minute?
Tim Carlson:
Correct.
Chairman Collins:
For personal information, is this the Las Vegas Office of the BLM (Bureau of Land Management)? I didn’t catch it Monday, or you must have said it differently. Had the Division of Wildlife been one of the permitting agencies in the beginning of the process, there would not have been a problem at the end of the project after you had spent half of a million dollars, or whatever cost, going along and thinking everything was okay based on information from a federal agency. Is that pretty close?
Tim Carlson:
That is correct. I also added it was the consultant’s responsibility to bring the Division [of Wildlife] in and they didn’t do it. There’s a lot of fault here, and we’re putting a lot of issues on the table as to what has occurred in that one instance. It occurs frequently in my opinion.
Chairman Collins:
Mr. Harris, did you have a comment? [Mr. Harris indicated he did not.] Would the PUC (Public Utility Commission) like to comment on any of that, on how you receive – are there any questions for Mr. Carlson or Mr. Hunt? [Comments on Battle Mountain between Committee members.] For the PUC, when you collect all this data from all these agencies described by the representative from Nevada Power and Sierra Pacific, how do you verify it?
Mark Harris:
Basically, the comments we get back from the agencies have all of the requirements for the mitigation factors. Also, they state that when all those factors are met, the agency will issue a permit. In other words, if it contains a compliance item, then we keep track up until it’s completed and we receive a copy of it.
Chairman Collins:
Do you receive a compliance form from the Division of Wildlife or from a consultant?
Mark Harris:
These compliance items all pretty much come from the agency involved with the permit. They are forwarded by the applicant but they’re all signed off and certified by each agency, whether it’s NDOT (Nevada Department of Transportation), Bureau of Land Management, SHPO (State Historic Preservation Office), et cetera.
Chairman Collins:
If we went back to project “X” from last year, you would have in your files something from the Division of Wildlife?
Mark Harris:
Correct.
Chairman Collins:
Not a consultant, or the applicant, or the plant, but from the Division of Wildlife?
Mark Harris:
Correct.
Assemblyman Carpenter:
I think in any of these projects when it comes into the final determination of rate making, or whatever you want to call it, any of these expenses are going to be part of the overall rate making process. They would have to end up on the backs of the people that used that energy. Right?
Dave Noble:
That’s correct, it would be on the back of the ratepayers.
Chairman Collins:
That’s always the cost of doing business. [Commented on the different needs as seen by different Committee members.] This is our last Committee hearing before the deadline. Has everyone figured out why we would want to allow the Division of Wildlife (NDOW) to permit renewable energy?
Assemblyman Geddes:
It goes to the regulations that NDOW would do. I’m just curious if, in looking and issuing a permit, they would do anything different than they’re required to do under UEPA (Utility Environmental Protection Act) right now? It seems like the process is laid out as far as the effects on wildlife and mitigation, and everything they have to prepare as part of the permit process to comply with that. I’m not sure what the regulations NDOW would put in, beyond the impacts to wildlife, would be in this process?
Doug Hunt:
I was a little unclear as to the question.
Chairman Collins:
What would you do different?
Doug Hunt:
We would have additional personnel in place to be able to give the evaluation of the project the due that it deserves. That is something that has been difficult for us to be able to do. We’ve done that in the mining program by committing individual biologists to projects so they can do that.
Assemblyman Geddes:
The actual effects on wildlife and requirements on wildlife would be the same. This would be staff time to perform the work. What I’m looking at, frankly, is how slowly all of these renewable projects are coming on-line and what’s out there and how the process moves. I’m not sure there’s much money here at all, once we’re looking at 10 megawatts and $1500 one time. We only approved six facilities in the last go-around of the PUC (Public Utility Commission). What was the total megawatt there of the six projects?
Mark Harris:
I believe it was 227 megawatts for all six projects.
Assemblyman Geddes:
So $22,000 over two years is what’s been approved, roughly. I can see the need for the biologists and staff to perform these projects. I’m not sure this will get us there at all, except partially. A biologist with benefits and time wouldn’t quite get there. We don’t have enough on six projects to justify a full biologist. I agree with your need for funding on staff; I’m just not sure this does it. That’s a statement, I’m not sure it’s a question now.
Chairman Collins:
Do you mean that if we pass this bill would that speed up the permitting process or not? Is that where you’re going? We have about two minutes to wrap it up.
Assemblyman Marvel:
Assemblyman Geddes brought up a good point. How many more of these projects are out there?
Chairman Collins:
Also, won’t these increase because of the requirements of state law?
Dave Noble:
There are no other projects at this point that the PUC knows of. I believe that the next RFP (request for proposal) is this summer. We expect with the ratcheting up of the percentage of renewables that’s currently in the NRS (Nevada Revised Statutes) that more projects will come our way for approval. At this point, it’s just those six contracts.
Chairman Collins:
Do those six contracts meet the 15 percent?
Dave Noble:
For 2003-2004 I believe it’s 5 percent; 15 percent is a few years down the road. Because of construction time for those projects, they will not be in line to meet the levels set for 2003-2004, but it is our understanding that by 2005 the utilities will be in compliance.
Chairman Collins:
Will they be in compliance in ten years with energy being applied?
Dave Noble:
We don’t know at this point. The facilities that are being built pursuant to those contracts would not cover, to our knowledge, the 15 percent ten years from now.
Chairman Collins:
There will need to be more applications.
Dave Noble:
Yes.
Chairman Collins:
In the state of Nevada there will need to be more applications for renewable energy. The six on-line right now don’t fulfill the 15 percent figures.
Doug Hunt:
Correct.
Chairman Collins:
There’s future opportunity, if this bill passed, so you could hire a “whole” biologist.
Doug Hunt:
We have a proposed generation plants list dated March 2003. On the first page, from December 2004, there are at least ten renewable energy projects identified between 2004 and 2007.
Chairman Collins:
Some of those may not have applied yet to the PUC (Public Utilities Commission).
Dave Noble:
None of those have applied yet to the PUC.
Chairman Collins:
Those are ten beyond the six; there are ten more in the pipeline that haven’t gotten to the process period yet.
Assemblyman Geddes:
How many megawatts?
Doug Hunt:
It looks like about 327 megawatts.
Assemblyman Geddes:
What’s an NDOW (Nevada Division of Wildlife) staff biologist who reviews these projects earn, with benefits?
Doug Hunt:
Not enough. My best estimate is about $60,000 not including equipment. With equipment and so forth, it would be about $80,000 to $90,000.
Chairman Collins:
Renewable energy is the energy of the future. Any last words? We’re about to run out of time. We’ll close the hearing on A.B. 372.
Assembly Bill 72: Converts Division of Wildlife of State Department of Conservation and Natural Resources into Department of Wildlife. (BDR 45-477)
Chairman Collins:
We can get rid of A.B. 72; we can IP (indefinitely postpone) it or just leave it and just turn it in. The chair will entertain a motion to amend and do pass on A.B. 372. Hearing no motions, the Chair won’t take any motions. Is there anything a Committee member would like to bring up in general before we adjourn our last meeting before the deadline?
Assembly Bill 447: Makes various changes concerning management of solid waste. (BDR 40-492)
Chairman Collins:
We’re out of time to address A.B. 447; we are adjourned. [Adjourned at 3:32 p.m.]
RESPECTFULLY SUBMITTED:
Erin Channell
Committee Secretary
APPROVED BY:
Assemblyman Tom Collins, Chairman
DATE: