Assembly Bill No. 429–Assemblymen Hettrick, Hardy, Geddes, Knecht, Beers, Brown, Goicoechea, Grady, Griffin, Gustavson, Mabey, Marvel and Sherer

 

March 17, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes relating to net metering and renewable energy. (BDR 58‑779)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to energy; making various changes relating to net metering and renewable energy; authorizing the Director of the Office of Energy within the Office of the Governor to develop a program to distribute money in the form of grants, incentives or rebates to pay or defray the costs for persons to acquire, install or improve net metering systems; revising provisions governing the regulation of net metering; revising the definition of renewable energy to include waterpower for the purposes of the portfolio standard for renewable energy for certain providers of electric service and for net metering and optional pricing; revising the provisions governing the portfolio standard to include energy from a qualified energy recovery process; transferring money from the Public Utilities Commission Regulatory Fund to the Office of Energy; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. Chapter 701 of NRS is hereby amended by adding

1-2  thereto the provisions set forth as sections 2 and 3 of this act.

1-3  Sec. 2.  “Net metering system” has the meaning ascribed to it

1-4  in NRS 704.771.

2-1  Sec. 3.  1.  The Director shall develop a program to

2-2  distribute money, within the limits of legislative appropriation, in

2-3  the form of grants, incentives or rebates to persons to pay or

2-4  defray, in whole or in part, the costs for those persons to acquire,

2-5  install or improve net metering systems, if the Director determines

2-6  that the distribution of money to a person for that purpose will

2-7  encourage, promote or stimulate:

2-8  (a) The development or use of sources of renewable energy in

2-9  the State or the development of industries or technologies that use

2-10  sources of renewable energy in the State;

2-11      (b) The conservation of energy in the State, the diversification

2-12  of the types of energy used in the State or any reduction in the

2-13  dependence of the State on foreign sources of energy;

2-14      (c) The protection of the natural resources of the State or the

2-15  improvement of the environment;

2-16      (d) The enhancement of existing utility facilities or any other

2-17  infrastructure in the State or the development of new utility

2-18  facilities or any other infrastructure in the State; or

2-19      (e) The investment of capital or the expansion of business

2-20  opportunities in the State or any growth in the economy of the

2-21  State.

2-22      2.  The Director may adopt any regulations that are necessary

2-23  to carry out the provisions of this section.

2-24      3.  The Director shall not distribute money to any person

2-25  pursuant to this section unless:

2-26      (a) The person complies with any requirements that the

2-27  Director adopts by regulation; and

2-28      (b) The distribution of the money is consistent with one or

2-29  more of the public purposes set forth in paragraphs (a) to (e),

2-30  inclusive, of subsection 1.

2-31      4.  As used in this section, “person” includes, without

2-32  limitation, any state or local governmental agency or entity.

2-33      Sec. 4.  NRS 701.020 is hereby amended to read as follows:

2-34      701.020  As used in this chapter, unless the context otherwise

2-35  requires, the words and terms defined in NRS 701.030 to 701.090,

2-36  inclusive, and section 2 of this act have the meanings ascribed to

2-37  them in those sections.

2-38      Sec. 5.  NRS 701.380 is hereby amended to read as follows:

2-39      701.380  1.  The Task Force shall:

2-40      (a) Advise the Office of Energy in [the] :

2-41          (1) The development and periodic review of the

2-42  comprehensive state energy plan with regard to the use of renewable

2-43  energy and the use of measures which conserve or reduce the

2-44  demand for energy or which result in more efficient use of energy.

3-1       (2) The distribution of money to persons pursuant to

3-2  section 3 of this act to pay or defray, in whole or in part, the costs

3-3  for those persons to acquire, install or improve net metering

3-4  systems.

3-5  (b) Coordinate its activities and programs with the activities and

3-6  programs of the Office of Energy, the Consumer’s Advocate and the

3-7  Public Utilities Commission of Nevada and other federal, state and

3-8  local officers and agencies that promote, fund, administer or operate

3-9  activities and programs related to the use of renewable energy and

3-10  the use of measures which conserve or reduce the demand for

3-11  energy or which result in more efficient use of energy.

3-12      (c) Spend the money in the Trust Fund for Renewable Energy

3-13  and Energy Conservation to:

3-14          (1) Educate persons and entities concerning renewable

3-15  energy and measures which conserve or reduce the demand for

3-16  energy or which result in more efficient use of energy.

3-17          (2) Create incentives for investment in and the use of

3-18  renewable energy and measures which conserve or reduce the

3-19  demand for energy or which result in more efficient use of energy.

3-20          (3) Distribute grants and other money to establish programs

3-21  and projects which incorporate the use of renewable energy and

3-22  measures which conserve or reduce the demand for energy or which

3-23  result in more efficient use of energy.

3-24          (4) Conduct feasibility studies, including, without limitation,

3-25  [a feasibility study] any feasibility studies concerning the

3-26  establishment or expansion of [an incentive fund,] any grants ,

3-27  incentives, rebates or other programs to enable or assist [residential,

3-28  small commercial and agricultural customers] persons to reduce the

3-29  cost of purchasing on-site generation systems, net metering systems

3-30  and distributed generation systems that use renewable energy.

3-31      (d) Take any other actions that the Task Force deems necessary

3-32  to carry out its duties, including, without limitation, contracting with

3-33  consultants, if necessary, for the purposes of program design or to

3-34  assist the Task Force in carrying out its duties.

3-35      2.  The Task Force shall prepare an annual report concerning its

3-36  activities and programs and submit the report to the Legislative

3-37  Commission and the Governor on or before January 30 of each year.

3-38  The annual report must include, without limitation:

3-39      (a) A description of the objectives of each activity and program;

3-40      (b) An analysis of the effectiveness and efficiency of each

3-41  activity and program in meeting the objectives of the activity or

3-42  program;

3-43      (c) The amount of money distributed for each activity and

3-44  program from the Trust Fund for Renewable Energy and Energy

4-1  Conservation and a detailed description of the use of that money for

4-2  each activity and program;

4-3  (d) An analysis of the coordination between the Task Force and

4-4  other officers and agencies; and

4-5  (e) Any changes planned for each activity and program.

4-6  3.  As used in this section[:

4-7  (a) “Distributed] , “distributed generation system” means a

4-8  facility or system for the generation of electricity that is in close

4-9  proximity to the place where the electricity is consumed.

4-10      [(b) “Net metering system” has the meaning ascribed to it in

4-11  NRS 704.771.]

4-12      Sec. 6.  Chapter 704 is hereby amended by adding thereto a

4-13  new section to read as follows:

4-14      1.  “Qualified energy recovery process” means a system with a

4-15  nameplate capacity of not more than 15 megawatts that converts

4-16  the otherwise lost energy from:

4-17      (a) The heat from exhaust stacks or pipes used for engines or

4-18  manufacturing or industrial processes; or

4-19      (b) The reduction of high pressure in water or gas pipelines

4-20  before the distribution of the water or gas,

4-21  to generate electricity if the system does not use additional fossil

4-22  fuel or require a combustion process to generate such electricity.

4-23      2.  The term does not include any system that uses energy, lost

4-24  or otherwise, from a process whose primary purpose is the

4-25  generation of electricity, including, without limitation, any process

4-26  involving engine-driven generation or pumped hydrogeneration.

4-27      Sec. 7.  NRS 704.771 is hereby amended to read as follows:

4-28      704.771  “Net metering system” means a facility or energy

4-29  system for the generation of electricity that:

4-30      1.  Uses renewable energy as its primary source of energy to

4-31  generate electricity;

4-32      2.  Has a generating capacity of not more than [10] 30

4-33  kilowatts;

4-34      3.  Is located on the customer-generator’s premises;

4-35      4.  Operates in parallel with the utility’s transmission and

4-36  distribution facilities; and

4-37      5.  Is intended primarily to offset part or all of the customer-

4-38  generator’s requirements for electricity.

4-39      Sec. 8.  NRS 704.7801 is hereby amended to read as follows:

4-40      704.7801  As used in NRS 704.7801 to 704.7828, inclusive,

4-41  and section 6 of this act, unless the context otherwise requires, the

4-42  words and terms defined in NRS 704.7805 to 704.7818, inclusive,

4-43  have the meanings ascribed to them in those sections.

 

 

5-1  Sec. 8.5.  NRS 704.7805 is hereby amended to read as follows:

5-2  704.7805  “Portfolio standard” means a portfolio standard for

5-3  renewable energy and energy from a qualified energy recovery

5-4  process established by the Commission pursuant to NRS 704.7821.

5-5  Sec. 9.  NRS 704.7811 is hereby amended to read as follows:

5-6  704.7811  1.  “Renewable energy” means:

5-7  (a) Biomass;

5-8  (b) Geothermal energy;

5-9  (c) Solar energy; [and]

5-10      (d) Waterpower; and

5-11      (e) Wind.

5-12      2.  The term does not include coal, natural gas, oil, propane or

5-13  any other fossil fuel, or nuclear energy.

5-14      3.  As used in this section, “waterpower” means power derived

5-15  from standing, running or falling water which is used for any

5-16  plant, facility, equipment or system to generate electricity if the

5-17  generating capacity of the plant, facility, equipment or system is

5-18  not more than 30 megawatts. Except as otherwise provided in this

5-19  subsection, the term includes, without limitation, power derived

5-20  from water that has been pumped from a lower to a higher

5-21  elevation if the generating capacity of the plant, facility,

5-22  equipment or system for which the water is used is not more than

5-23  30 megawatts. The term does not include power:

5-24      (a) Derived from water stored in a reservoir by a dam or

5-25  similar device, unless:

5-26          (1) The water is used exclusively for irrigation;

5-27          (2) The dam or similar device was in existence on

5-28  January 1, 2003; and

5-29          (3) The generating capacity of the plant, facility, equipment

5-30  or system for which the water is used is not more than 30

5-31  megawatts;

5-32      (b) That requires a new or increased appropriation or

5-33  diversion of water for its creation; or

5-34      (c) That requires the use of any fossil fuel for its creation,

5-35  unless:

5-36          (1) The primary purpose of the use of the fossil fuel is not

5-37  the creation of the power; and

5-38          (2) The generating capacity of the plant, facility, equipment

5-39  or system for which the water is used is not more than 30

5-40  megawatts.

5-41      Sec. 10.  NRS 704.7815 is hereby amended to read as follows:

5-42      704.7815  “Renewable energy system” means:

5-43      1.  A facility or energy system that:

5-44      (a) Uses renewable energy or energy from a qualified energy

5-45  recovery process to generate electricity; and

6-1  (b) Transmits or distributes the electricity that it generates from

6-2  renewable energy or energy from a qualified energy recovery

6-3  process via:

6-4       (1) A power line which is dedicated to the transmission or

6-5  distribution of electricity generated from renewable energy or

6-6  energy from a qualified energy recovery process and which is

6-7  connected to a facility or system owned, operated or controlled by a

6-8  provider of electric service; or

6-9       (2) A power line which is shared with not more than one

6-10  facility or energy system generating electricity from nonrenewable

6-11  energy and which is connected to a facility or system owned,

6-12  operated or controlled by a provider of electric service.

6-13      2.  Asolar [thermal] energy system that reduces the

6-14  consumption of [electricity.] electricity, natural gas or propane.

6-15      3.  A net metering system used by a customer-generator

6-16  pursuant to NRS 704.766 to 704.775, inclusive.

6-17      Sec. 11.  NRS 704.7821 is hereby amended to read as follows:

6-18      704.7821  1.  For each provider of electric service, the

6-19  Commission shall establish a portfolio standard for renewable

6-20  energy [.] and energy from a qualified energy recovery process.

6-21  The portfolio standard must require each provider to generate or

6-22  acquire electricity from renewable energy systems in an amount that

6-23  is:

6-24      (a) For calendar years 2003 and 2004, not less than 5 percent of

6-25  the total amount of electricity sold by the provider to its retail

6-26  customers in this state during that calendar year.

6-27      (b) For calendar years 2005 and 2006, not less than 7 percent of

6-28  the total amount of electricity sold by the provider to its retail

6-29  customers in this state during that calendar year.

6-30      (c) For calendar years 2007 and 2008, not less than 9 percent of

6-31  the total amount of electricity sold by the provider to its retail

6-32  customers in this state during that calendar year.

6-33      (d) For calendar years 2009 and 2010, not less than 11 percent

6-34  of the total amount of electricity sold by the provider to its retail

6-35  customers in this state during that calendar year.

6-36      (e) For calendar years 2011 and 2012, not less than 13 percent

6-37  of the total amount of electricity sold by the provider to its retail

6-38  customers in this state during that calendar year.

6-39      (f) For calendar year 2013 and for each calendar year thereafter,

6-40  not less than 15 percent of the total amount of electricity sold by the

6-41  provider to its retail customers in this state during that calendar year.

6-42      2.  In addition to the requirements set forth in subsection 1, the

6-43  portfolio standard for each provider must require that:

6-44      (a) Of the total amount of electricity that the provider is required

6-45  to generate or acquire from renewable energy systems during each

7-1  calendar year, not less than 5 percent of that amount must be

7-2  generated or acquired from solar renewable energy systems.

7-3  (b) If the provider acquires electricity from a renewable energy

7-4  system pursuant to a renewable energy contract with another party:

7-5       (1) The term of the renewable energy contract must be not

7-6  less than 10 years, unless the other party agrees to a renewable

7-7  energy contract with a shorter term; and

7-8       (2) The terms and conditions of the renewable energy

7-9  contract must be just and reasonable, as determined by the

7-10  Commission. If the provider is a public utility and the Commission

7-11  approves the terms and conditions of the renewable energy contract

7-12  between the provider and the other party, the renewable energy

7-13  contract and its terms and conditions shall be deemed to be a

7-14  prudent investment and the provider may recover all just and

7-15  reasonable costs associated with the renewable energy contract.

7-16      3.  If, for the benefit of one or more of its retail customers in

7-17  this state, the provider has subsidized, in whole or in part, the

7-18  acquisition or installation of a solar [thermal] energy system which

7-19  qualifies as a renewable energy system and which reduces the

7-20  consumption of electricity, the total reduction in the consumption of

7-21  electricity during each calendar year that results from the solar

7-22  [thermal] energy system shall be deemed to be electricity that the

7-23  provider generated or acquired from a renewable energy system for

7-24  the purposes of complying with its portfolio standard.

7-25      4.  The Commission may adopt regulations that establish a

7-26  system of renewable energy credits that may be used by a provider

7-27  to comply with its portfolio standard.

7-28      5.  Except as otherwise provided in subsection 6, each provider

7-29  shall comply with its portfolio standard during each calendar year.

7-30      6.  If, for any calendar year, a provider is unable to comply with

7-31  its portfolio standard through the generation of electricity from its

7-32  own renewable energy systems or, if applicable, through the use of

7-33  renewable energy credits, the provider shall take actions to acquire

7-34  electricity pursuant to one or more renewable energy contracts. If

7-35  the Commission determines that, for a calendar year, there is not or

7-36  will not be a sufficient supply of electricity made available to the

7-37  provider pursuant to renewable energy contracts with just and

7-38  reasonable terms and conditions, the Commission shall exempt the

7-39  provider, for that calendar year, from the remaining requirements of

7-40  its portfolio standard or from any appropriate portion thereof, as

7-41  determined by the Commission.

7-42      7.  The Commission shall adopt regulations for the

7-43  determination of just and reasonable terms and conditions for the

7-44  renewable energy contracts that a provider of electric service must

7-45  enter into to comply with its portfolio standard.

8-1  8.  As used in this section:

8-2  (a) “Renewable energy contract” means a contract to acquire

8-3  electricity from one or more renewable energy systems owned,

8-4  operated or controlled by other parties.

8-5  (b) “Terms and conditions” includes, without limitation, the

8-6  price that a provider of electric service must pay to acquire

8-7  electricity pursuant to a renewable energy contract.

8-8  Sec. 11.5. NRS 704B.320 is hereby amended to read as

8-9  follows:

8-10      704B.320  1.  For eligible customers whose loads are in the

8-11  service territory of an electric utility that primarily serves densely

8-12  populated counties, the aggregate amount of energy that all such

8-13  eligible customers purchase from providers of new electric

8-14  resources before July 1, 2003, must not exceed 50 percent of the

8-15  difference between the existing supply of energy generated in this

8-16  state that is available to the electric utility and the existing demand

8-17  for energy in this state that is consumed by the customers of the

8-18  electric utility, as determined by the Commission.

8-19      2.  An eligible customer that is a nongovernmental commercial

8-20  or industrial end-use customer whose load is in the service territory

8-21  of an electric utility that primarily serves densely populated counties

8-22  shall not purchase energy, capacity or ancillary services from a

8-23  provider of new electric resources unless, as part of the proposed

8-24  transaction, the eligible customer agrees to:

8-25      (a) Contract with the provider to purchase:

8-26          (1) An additional amount of energy which is equal to 10

8-27  percent of the total amount of energy that the eligible customer is

8-28  purchasing for its own use under the proposed transaction and which

8-29  is purchased at the same price, terms and conditions as the energy

8-30  purchased by the eligible customer for its own use; and

8-31          (2) The capacity and ancillary services associated with the

8-32  additional amount of energy at the same price, terms and conditions

8-33  as the capacity and ancillary services purchased by the eligible

8-34  customer for its own use; and

8-35      (b) Offers to assign the rights to the contract to the electric

8-36  utility for use by the remaining customers of the electric utility.

8-37      3.  If an eligible customer is subject to the provisions of

8-38  subsection 2, the eligible customer shall include with its application

8-39  filed pursuant to NRS 704B.310 all information concerning the

8-40  contract offered to the electric utility that is necessary for

8-41  the Commission to determine whether it is in the best interest of the

8-42  remaining customers of the electric utility for the electric utility to

8-43  accept the rights to the contract. Such information must include,

8-44  without limitation, the amount of the energy and capacity to be

9-1  purchased under the contract, the price of the energy, capacity and

9-2  ancillary services and the duration of the contract.

9-3  4.  Notwithstanding any specific statute to the contrary,

9-4  information concerning the price of the energy, capacity and

9-5  ancillary services and any other terms or conditions of the contract

9-6  that the Commission determines are commercially sensitive:

9-7  (a) Must not be disclosed by the Commission except to the

9-8  regulatory operations staff of the Commission, the Consumer’s

9-9  Advocate and his staff and the electric utility for the purposes of

9-10  carrying out the provisions of this section; and

9-11      (b) Shall be deemed to be confidential for all other purposes,

9-12  and the Commission shall take such actions as are necessary to

9-13  protect the confidentiality of such information.

9-14      5.  If the Commission determines that the contract:

9-15      (a) Is not in the best interest of the remaining customers of the

9-16  electric utility, the electric utility shall not accept the rights to

9-17  the contract, and the eligible customer is entitled to all rights to the

9-18  contract.

9-19      (b) Is in the best interest of the remaining customers of the

9-20  electric utility, the electric utility shall accept the rights to

9-21  the contract and the eligible customer shall assign all rights to the

9-22  contract to the electric utility. A contract that is assigned to the

9-23  electric utility pursuant to this paragraph shall be deemed to be an

9-24  approved part of the resource plan of the electric utility and a

9-25  prudent investment, and the electric utility may recover all costs for

9-26  the energy, capacity and ancillary services acquired pursuant to the

9-27  contract. To the extent practicable, the Commission shall take

9-28  actions to ensure that the electric utility uses the energy, capacity

9-29  and ancillary services acquired pursuant to each such contract only

9-30  for the benefit of the remaining customers of the electric utility that

9-31  are not eligible customers, with a preference for the remaining

9-32  customers of the electric utility that are residential customers with

9-33  small loads.

9-34      6.  The provisions of this section do not exempt the electric

9-35  utility, in whole or in part, from the requirements imposed on the

9-36  electric utility pursuant to NRS 704.7801 to 704.7828, inclusive, to

9-37  comply with its portfolio standard for renewable energy [.] and

9-38  energy from a qualified energy recovery process. The Commission

9-39  shall not take any actions pursuant to this section that conflict with

9-40  or diminish those requirements.

9-41      7.  As used in this section, “Consumer’s Advocate” means the

9-42  Consumer’s Advocate of the Bureau of Consumer Protection in the

9-43  Office of the Attorney General.

9-44      Sec. 12.  1.  Not later than 30 days after the effective date of

9-45  this act, the Public Utilities Commission of Nevada shall transfer the

10-1  sum of $250,000 from its reserve account in the Public Utilities

10-2  Commission Regulatory Fund, created by NRS 703.147, to an

10-3  account in the State General Fund for use by the Director of the

10-4  Office of Energy within the Office of the Governor to carry out the

10-5  provisions of section 3 of this act.

10-6      2.  The Director of the Office of Energy shall use the money

10-7  transferred pursuant to this section only for the purposes set forth in

10-8  section 3 of this act.

10-9      Sec. 13.  This act becomes effective upon passage and

10-10  approval.

 

10-11  H