State question 3: Energy choice

Shall Article 1 of the Nevada Constitution be amended to require the Legislature to provide by law for the establishment of an open, competitive retail electric energy market that prohibits the granting of monopolies and exclusive franchises for the generation of electricity?

Yes

No

Explanation

This ballot measure proposes to amend the Nevada Constitution to require the Legislature to provide by law for an open, competitive retail electric energy market by July 1, 2023. The law passed by the legislature must include, but is not limited to, provisions that reduce costs to customers, protect against service disconnections and unfair practices, and prohibit the granting of monopolies and exclusive franchises for the generation of electricity.

The law would not have to provide for the deregulation of the transmission or distribution of electricity.

Approval of this ballot measure would add a new section to the Nevada Constitution establishing that every person, business, association of persons or businesses, state agency, political subdivision of the State of Nevada, or any other entity in Nevada has the right to choose the provider of its electric utility service, including but not limited to, selecting providers from a competitive retail electric market, or by producing electricity for themselves or in association with others, and shall not be forced to purchase energy from one provider. The proposed amendment does not create an open and competitive retail electric market, but rather requires the Legislature to provide by law for such a market by July 1, 2023. The law passed by the Legislature cannot limit a person’s or entity’s right to sell, trade, or otherwise dispose of electricity. Pursuant to Article 19, Section 2, of the Nevada Constitution, approval of this question is required at two consecutive general elections before taking effect.

“Yes” vote

A “Yes” vote would amend Article 1 of the Nevada Constitution so that the Legislature would be required to pass a law by July 1, 2023, that creates an open and competitive retail electric market and that includes provisions to reduce costs to customers, protect against service disconnections and unfair practices, and prohibit the granting of monopolies and exclusive franchises for the generation of electricity.

“No” vote

A “No” vote would retain the provisions of Article 1 of the Nevada Constitution in their current form. These current provisions do not require the Legislature to pass a law that creates an open and competitive retail electric market and that includes provisions to reduce costs to customers, protect against service disconnections and unfair practices, and prohibit the granting of monopolies and exclusive franchises for the generation of electricity.

Argument for passage

The Energy Choice Initiative

Vote YES on Question 3, the Energy Choice Initiative.

Nevada has some of the highest electricity rates in the West.

In addition, as ratepayers, we are limited in the types of renewable energy we can purchase because most of us are forced to buy energy from a monopoly.

Many businesses, including those who would relocate here and create new jobs, want more renewable energy.

The problems with the current energy policy are:

The electricity rates we pay are largely dictated by the Public Utilities Commission, not the free market. And those rates provide for a guaranteed return (profit) for the utility company.

There is a legal monopoly in most of Nevada’s electricity market and the rates charged to customers are not subject to pressure from competition.

Without an open market, it is difficult for Nevadans to take advantage of new technologies in energy generation.

Nevada residents and businesses often cannot choose the specific type of electricity they want — that fueled by renewable resources.

Question 3 is a constitutional amendment that would create a right for Nevadans to purchase energy from an open electricity market. Residents and businesses will be allowed to purchase electricity from a provider of their choice.

A YES vote on Question 3 means you support:

Eliminating the monopoly on retail power sales.

Creating a new marketplace where customers and energy providers come together.

Preserving the utility, whether it’s NV Energy or another utility, as the operator of the electric distribution grid.

Protecting consumers by requiring the Nevada Legislature to enact laws that entitle Nevadans to safe, reliable, and competitively priced electricity that protects against service disconnections and unfair practices.

Paying rates for electricity that are set by an open and competitive market, not an appointed government agency.

Allowing energy providers to offer electricity from any source — including renewable sources — without needing the approval of the Commission.

Keeping Nevada’s renewable energy portfolio standard in place, along with Nevada’s other renewable policies.

Allowing the Commission to continue to regulate Nevada’s electricity market, but instead of regulating a single provider, they regulate the competitive market.

Many people believe that competition in the electricity market drives prices down and provides more resource options for residents and businesses.

To date, 24 states have passed legislation or regulatory orders that will allow some level of retail competition.

It’s time for Nevadans to have a choice.

Vote YES on Question 3.

Argument against passage

Deregulation of the energy market means a loss of control by Nevada’s citizens. We allowed the airlines to be deregulated, and today air travel is a nightmare.

We allowed the banking system to be deregulated, and the housing and financial crisis followed.

It was deregulation of energy markets in California that allowed the Enron disaster.

In fact, Nevadans considered deregulating the energy market in the 1990s, but the rolling blackouts and power shortages of the Enron crisis taught us that deregulation was too risky.

We should not forget those lessons now, and this initiative should be defeated.

In state after state over the last three decades, proponents of deregulation across the country have promised that “energy choice” would mean lower costs, but the results have been ever-higher prices for energy, charged by private companies outside the control of state agencies.

In deregulated New York, residential customers wound up paying energy costs 70 percent above the national average.

In Texas, retail consumers pay fifteen percent higher electricity bills after deregulation than before it.

And in Connecticut, customers of deregulated energy providers saw uncontrollable price jumps with little or no warning, increases the state was unable to stop or limit.

Even this initiative’s proponents agree that Nevada will no longer be able to set or secure any certain price or rate structure, and therefore will not be able guard against the same thing happening here. Deregulation of the energy market was supposed to offer consumer choice and better pricing and services, but it did not, and there is no way to guarantee it will provide any benefit at all to Nevadans.

Currently, Nevada’s utility companies are regulated by the state, which approves or rejects any changes to rates and ensures that utilities cannot gouge Nevada customers.

Recent studies show that Nevada consumers enjoyed the second-lowest rates of energy price increase in the country, largely due to the prudent management of the market by public agencies.

By contrast, U.S. Department of Energy data shows that electricity prices have risen more steeply in states with energy deregulation programs similar to that proposed by this initiative than in those without.

Nevada’s energy is too important of a public resource to permit the unpredictable and uncontrollable cost increases that this market deregulation initiative would threaten. We should vote “No” on this very flawed ballot measure, and ensure Nevadans can maintain control over the state’s energy market.

The above arguments were submitted by the Ballot Question Committee composed of citizens as provided for in NRS 293.252.