Customers could face bill for $1 billion NV Energy transmission line

CARSON CITY — Energy consumers in Nevada could be on the hook for a $1 billion transmission line project to carry electricity they don’t need under a bill rushed through the state Legislature early Tuesday.

Assembly Bill 416 would allow NV Energy to build a transmission line to export power from rural Nevada to customers in California without getting advance permission from the Public Utilities Commission.

After frantic last-minute lobbying by NV Energy, the bill won final Senate approval in a 16-5 vote at 12:39 a.m., 21 minutes before the 120-day legislative session concluded.

Gov. Brian Sandoval’s office has not indicated whether he will sign the bill .

"If it doesn’t pan out, the ratepayers will end up paying the bill," said Eric Witkoski, consumer advocate in the attorney general’s Bureau of Consumer Protection.

AB416 would make it easier for NV Energy to strike deals between developers of potential renewable energy projects in rural Nevada and consumers in California. The company would charge money to move the power. It would help NV Energy develop the 570-mile line, which the consumer advocate said could cost $2 million a mile to build.

"It basically gives the (Public Utilities Commission) the authority to approve transmission projects for renewable energy export," said Jennifer Schurict, a spokeswoman for NV Energy. Schurict said the price of the transmission line would vary depending on length and other factors, and the PUC would need to approve rate changes to cover the cost.

Proponents say costs passed along to Nevada ratepayers would be recouped through sales to California.

"Nevada ratepayers don’t just buy the line and then they are out forever," said Sen. Mike Schneider, D-Las Vegas, who voted in favor of the bill. "They buy the line, and they are paid back."

That’s not how critics see it.

Opponents say that under the plan, NV Energy would be allowed to speculate in the electricity market and put the burden of risk on the ratepayer.

"It really is speculative," said Witkoski, who added that companies under NV Energy already generate more power than in-state customers demand.

"There are independent competitors out there who will take the risk and build this, so the ratepayer doesn’t have to," he said.

Critics also were dismayed by the last-minute nature of the approval.

The language NV Energy wanted had been included in another bill, Senate Bill 488, which was approved 21-0 in the Senate on April 22 but stalled in committee in the Assembly.

When it became clear SB488 wasn’t moving, backers amended the important parts to AB416 that already had passed the Assembly.

That meant it needed only approval in the Senate and concurrence on amendments to get out of the Legislature.

"This was patched together last night," Witkoski said. "The first time we got wind of it was at midnight when they were sending it through."

Pete Ernaut, a lobbyist for NV Energy and president of government and public affairs for the influential political consulting firm R&R Partners, defended the last-minute maneuvering.

Ernaut said the fact the language was included in SB488 for months showed there was time for lawmakers and the public to give input.

"The transmission language we worked on all session, we just made a simple amendment to put it in (AB416)," Ernaut said. "We certainly don’t like to have to have something come at the very last second, but when you have a hard deadline, that is the nature of the beast."

Ernaut also defended the policy, saying the ratepayers would benefit as would the renewable energy industry in Nevada.

He said Nevada citizens and lawmakers have stated clearly in recent years they favor the development of cleaner alternatives to coal and other nonrenewable energy.

The bill, he said, is an important step to turning that vision into reality.

"Nevada made a public policy statement in the last few sessions that the development of solar energy was important," Ernaut said. "That construction is going to be done with risk to developers and ratepayers but ultimately accrue to the benefit of the ratepayer."

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.