It’s an electrifying issue all over the state. One can hardly watch television, listen to the radio, or even shuffle through social media without receiving a bombardment of ads touting both sides of Question 3 on the November election ballot about the future of energy choice in Nevada.
The issue came before the Mesquite City Council at its Tuesday, Aug. 28, meeting as the city’s lobbyist, Warren Hardy provided an update saying “I have no idea and no one else has any idea” what the passage of Question 3 will do to energy markets in Nevada.
Voter approval of Question 3 in November would alter the state constitution to eliminate electric monopolies and open electricity markets to competition. The issue was approved by 72 percent of voters in 2016 but requires a second round of approval in order to change the constitution.
“When you’re putting something into the constitution, it’s probably a good idea not to be too specific,” Hardy said. Although the language is “a little less specific than we would like” Hardy said the amendment would be “a general policy direction with regard to energy choice in Nevada.”
The option for consumers to choose their energy supplier from a multitude of companies has been examined by state legislators in the past “but they have not acted,” Hardy said, so proponents of choice “took it to the ballot initiative.”
“The reason I can’t tell you about [its effect] is because beyond the broad policy statement, it really doesn’t make any decisions,” Hardy continued. “Basically, it establishes an energy policy. It says, ‘It is the policy of this state that electricity markets be open and competitive so that all electricity customers are afforded meaningful choices among different providers.’ It then mandates that the legislature determine meaningful choices. I’m not sure how you mandate that other than as an aspiration.”
If the initiative passes in November, the legislature must pass appropriate laws and guidelines by 2023 in order to implement the policy.
Hardy said the Public Utilities Commission of Nevada (PUCN) would no longer be charged with setting electricity rates. That would not affect Mesquite customers of Overton Power District 5 since it is not under the purview of the PUCN. It would mostly affect Nevada Energy company customers.
Rates and resources would function exclusively on the principle of a free market although NV Energy, the largest energy supplier in the state, would operate the transmission and distribution system.
Hardy listed three groups that are working on implementation challenges should the initiative pass in November: Governor’s Committee on Energy Choice, PUCN, and the Legislature’s Interim Committee on Energy.
“Are we prepared? No. Are we moving towards preparing for implementation? Yes,” Hardy said. “I wouldn’t say we’re ahead of the game, but I also wouldn’t say we’re behind the game. We’re right where we need to be.”
Hardy said some of the challenges include determining the provider of last resort and default service, renewable policies, impact fees, and rate caps. “Each state that has previously deregulated its energy markets have also set some sort of rate cap,” he said.
Another question on the November ballot, labeled Question 6, deals with renewable energy targets in the state. Hardy said each question has significant impact on the other.
“We don’t know what we’re voting on,” Hardy said as he listed the impact passage of Question 3 may have on the city of Mesquite. As a customer, the city would have a choice in providers and resource mix, price competition and transmission distribution costs recovery.
The city could also become a potential regulator through franchise fees, business licenses and community choice aggregation. “I would advise that the city be as flexible as possible. Let’s not put ourselves under the thumb of the state or the county. Let’s maintain our autonomy so we can make a decision about whether we want to be an organized utility or a community choice aggregator. All of that has implications regarding franchise fees and licenses.”
Hardy said that one of the city’s challenges is that “because we are a small entity there’s not a focus on bringing energy here where the option to do a community utility or community choice aggregation can be a critical component.”
Keith Buchalter, Mesquite-based manager for Overton Power District, addressed the council saying his comments were personal and not sponsored by OPD. “Mr. Hardy said it best and it should be very clear. We do not know what we are voting on.”
He said that the city’s resolution passed in February regarding the issue was based on documents created by proponents of the passage of Question 3. “If you passed a resolution based only on one side, I recommend you look at all the pros and cons.” Buchalter also reminded the council and public that without adequate information from both sides, it’s better to vote no until actual data becomes available.
Councilman David Ballweg announced the Mesquite Chamber of Commerce is having a forum at its September monthly luncheon that will address all ballot initiatives in the November election. He said groups supporting and objecting to Question 3 will be available for an open discussion.
City Attorney Bob Sweetin reminded the council that the resolution they passed in February was to allow staff to take action if Question 3 was again approved by voters and made part of the state constitution.
Ballweg, who sponsored the resolution, clarified that it was a tool for the city to ensure it “had a seat at the table” if the question passed and that the city could engage in discussions on how it would be implemented. “It was not intended to be a yes or no vote on the question itself,” Ballweg said.