Advocate says deregulating Nevada energy market will benefit even small customers

Despite fears to the contrary, the head of the group pushing for final passage of the Energy Choice initiative said not just big business but residential customers and small businesses will benefit from an open and competitive retail electricity market.

Jon Wellinghoff of Policy/DER (for Distributed Energy Resource technology) told a joint meeting of the Northern Nevada Development Authority and Carson Valley Chamber of Commerce even for small customers, “I think your overall total monthly bills will be less.”

Asked about what the initiative amending Nevada’s constitution to end the monopoly held by NV Energy would do to kilowatt hour rates, he said that doesn’t really matter.

“Nobody has a real interest in how much you pay per kilowatt hour,” Wellinghoff said. “They have an interest in how much you pay on your monthly bill.”

Wellinghoff, head of Policy/DER consulting, is a former member and chairman of the Federal Energy Regulatory Commission, former general counsel of the Nevada’s Public Utilities Commission and the state’s first Consumer Advocate. He said large customers like the major resorts and mines already have the ability to opt out of NV Energy and buy electric power elsewhere. He said the ballot question before voters in 2018 gives all consumers that right.

“People in Nevada will ultimately have choice for energy,” he said.

Wellinghoff said at present NV Energy is the only provider in the state other than a few tiny co-ops and city systems. He said the initiative would end that monopoly and “direct the Legislature to come up with specifics to do things that will ultimately provide for a change in the way we can receive energy services.”

Voters approved the initiative in 2016 by a 73 percent margin. Passage next year would ensure the mandate to open the energy market in Nevada’s constitution and Wellinghoff said he expects it to pass.

He said other states have already opened their electric power markets to competitive providers. He said in Texas, which started that almost 20 years ago, residential, small business and other customers have up to 15-20 different providers to choose from. He said for example, some providers will give customers free power nights and weekends because the power is so much cheaper then.

“Others will say we’ll give you a flat rate of 10 cents a kilowatt hour for the next five years,” he said.

He said customers can pick which plan works best for them instead of having to take whatever a monopoly provider offers.

One piece of the puzzle he said probably won’t change is the service that brings the power to a home or business — the distribution system of wires, poles, transformers and other equipment.

“All that will continue to be provided by a monopoly provider, I assume NV Energy,” he said.

He said the distribution charge for those services will be on the same bill the customer gets each month for all electric power services. That charge, he said, will pay to maintain, improve and expand the grid that brings power to people’s homes.

“The key is everything that can be competitive will be competitive,” he said.

He said the energy choice committee appointed by Gov. Brian Sandoval is already working on what the whole system should look like and will make recommendations to the 2019 Legislature when and if voters approve Energy Choice. He said it’s important the initiative gives lawmakers the responsibility to work out how everything will work. As for the Public Utilities Commission, he said its role would change under the initiative from setting rates to a market regulator overseeing how retail electric power retailers provide service and to prevent fraud and abuse in those markets.