Nevada Public Utilities Commission staff members Thursday said they are unsure if parts of the Carson City's unique proposal to introduce the renewable energy industry in the city is possible under state regulations.
Carson City officials delayed signing an agreement Thursday with a California developer but said they supported the agreement and will reconsider it in a few weeks after working out some details.
The commission will research whether city's plan to build a project for the purpose of buying energy and removing itself and several partners from Sierra Pacific Co. service will fall under the agency's jurisdiction for regulation.
No other government agency in the state has proposed a project like Carson's and it is uncertain whether the price of the power produced or building the project could be protected by the state regulatory agency, said commission spokesman David Chairez.
Beyond that, under state regulations, the city may not be able to group together with Washoe County, for instance, Chairez said.
"We have to research this and see what city would need to do," Chairez said after first hearing the plan Thursday. "There are a lot of issues involved with this. We're not aware of any other municipality in Nevada that has proposed this type of thing."
Carson City supervisors considered signing an agreement with Princeton Development Corp. Thursday that would give the company sole rights for the development of renewable energy projects within city limits for the next two to five years and beyond.
"Carson City has a great opportunity before it to grow its economy," said Steve Taber, chairman of the board for Princeton. "We're planning to go full-speed on this. The burden will be on us to prove to you it makes sense to buy renewable energy."
Potential partners have expressed interest in joining Carson in the project include the state, Washoe and Churchill counties, Carson City School District, Western Nevada Community College and Washoe County Regional Transportation Commission. The total energy load could be as high as 12 megawatts, making the partnership group marketable for industry.
By drawing alternative energy industry to the area, the city is also looking to provide opportunities for jobs and economic stabilization and possibly sell power back to Sierra Pacific or other utilities.
The city's proposal was given a letter of endorsement by Carl Linvill, director of the Nevada State Office of Energy Wednesday and energy adviser to Gov. Kenny Guinn.
Some city supervisors were reluctant to sign the pre-development contract before clarifying the city's financial obligation and ability to opt out of the contract.
Though all supervisors were eager to pursue the deal, the contract as written "really gives them a carte blanche and holds us somewhat of a hostage," supervisor Richard Staub said.
Princeton was selected as the most desirable renewable energy developer from a group of 14 who submitted bids for the project. The city advertised for bids across the country and selected Princeton because they were the "most qualified and had a proposal with the most potential," said Andy Burnham, Carson City Director of Development Services.
In the contract presented to the board Thursday, Princeton would be entitled to recover costs to develop renewable energy projects within five years of the completion of the contract if the city elected to instead contract with another developer for the same types of projects.
The city will not be obligated to pay back any costs if it does not pursue any projects presented by the developer. But if a project is built, like a wind farm, the city and partners would be obligated to purchase power from the project at whatever cost it required, plus a surcharge to Princeton for each kilowatt to pay back investment costs.
Officials don't yet know exactly how much that might be. Some supervisors said they would be willing to pay a little more for energy if it meant more jobs and industry for the city and region.
"I think there is potential to bring a number of companies to the region," said Supervisor Shelly Aldean. "I think if you don't put your toe in the water, you're not going to find the current."
Supervisor Pete Livermore agreed.
"The risk is very minimal and the outcome is huge and substantial," Livermore said.
Staub, also an attorney, said he supported the deal "110 percent" but had concerns about contract language.
"We are very much for the process but a good idea does not always support a bad agreement," Staub said. "All terms (regarding compensation to Princeton) are gray and in some ways opaque."
Representatives from the public also asked the board to support the project but asked members to look over the contract before moving forward.
The board directed staff to work with Princeton for the next week and fine-tune the agreement that will be considered again Aug. 21.