Nevada works on renewable energy

As lawmakers rush through the final weeks of their 2009 session, they're working out details on several bills to help Nevada overcome obstacles to realizing its full potential as a renewable energy leader.

Nevada's ample wind, sun and hot springs have put the state in a favorable position to develop renewable energy resources, earning it the nickname the "Saudi Arabia of alternative energy."

But the state lacks transmission lines to connect northern and southern power grids, a critical piece of infrastructure needed to export energy to California and other states.

And since 86 percent of the state is federal land, the process for leasing and developing land is more cumbersome.

"You can have all the abatements in the world, but unless you have a system where you can move the projects forward smoothly, and without transmission lines, there's no way," said Alfredo Alonso, lobbyist for Ausra Solar.

AB522, heard in Assembly Ways and Means on Friday, would help streamline the process by creating a state energy commissioner to help developers work with the federal Bureau of Land Management to get leases and permits, teach the public about energy conservation and collect information about the companies to ensure they meet requirements for tax abatements.

Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, set out early in the session to examine the state's tax abatements used to attract businesses.

"We have to stay competitive, stay on the cutting edge," Kirkpatrick said Friday. "But at the same time we have to make sure that Nevada workers are part of the process."

Current tax abatement policies expire in June. AB522 would strengthen the requirements to qualify for the abatements. For large counties, a company would have to create 75 jobs in the second quarter of its construction phase, and those jobs would have to pay 110 percent of the statewide wage average of about $19 an hour. Companies also would have to make a capital investment of $10 million, up from the current requirement of $1 million.

Kirkpatrick also said the new commissioner would collect data to track companies' compliance with those requirements.

"There's an accountability measure now, so we can go back and track them, and they're not necessarily guaranteed the abatement unless they follow the rules," Kirkpatrick said.

Under the bill, the abatement for sales taxes would change so that companies would have to pay local school support taxes. Property tax abatements wouldn't include any part of the sales tax that supports education.

Not all renewable energy companies would enjoy property tax abatements under AB522. Currently, geothermal plants are excluded from that benefit.

Assemblyman Tom Grady, R-Yerington, said that during the last special session, the Legislature took one-third of Churchill County's budget away.

"It's a great industry, and it's been great for Churchill County, but they can't give everything away and still maintain a county," Grady said. "And I don't think Churchill county or any other county can keep getting hit with these cuts."

"Other renewables can go to other places. As far as geothermal, they go where the hot water is, be it Churchill County, be it Idaho, wherever it might be," Grady added.

Paul Thomsen of Ormat, which owns nine geothermal power plants in Nevada and is one of the largest developers of geothermal energy plants in the country, said he thinks geothermal companies should be given the same treatment as other renewable energy companies.

"We're treated like a mining establishment," Ormat said. "We do competitive leasing for geothermal lands, pay a royalty rate, and now they're trying to exclude us from abatements."

Thomsen said Ormat spent $8.5 million in 2007 procuring leases in Nye, Churchill, Humboldt and Washoe counties. But those initial research expeditions don't "represent a future power plant per se," Thomsen said.

"You should have your law for geothermal on par with all other renewables, because that's what other states are doing," said Fred Schmidt, representing Ormat Technologies.

Several legislators would favor leaving geothermal out of property tax abatements, but the issue is not resolved.

"We're still working that out," said Assemblyman Chad Christensen, R-Las Vegas, who helped craft the bill. "I would like to see geothermal included, because Nevada is the place to put a geothermal project."

Many in the business community supported the idea.

"All the other state legislatures are watching what we're doing right now," said Mike Skaggs, director of the Commission on Economic Development. "Right now we're competitive, and this bill keeps that."

SB358, sought by Senate Majority Leader Steven Horsford, D-North Las Vegas, also seeks to streamline the process by creating a commissioner, and would offer more generous tax abatements, such as property tax breaks of up to 75 percent would extend for 20 years.

Horsford's "green jobs" initiative, SB152 would use federal stimulus money to create renewable energy jobs. Horsford's bills also address building transmission lines and training a work force.

Gov. Jim Gibbons proposed SB395, which also proposes to abate property taxes of renewable energy producers for 10 years. The tax break also would help developers of transmission lines for such projects. Gibbons' bill would increase the percentage of electricity that NV Energy must obtain from renewable sources to 25 percent by 2025.