Question 3 Pahrump forum offers insight on choice market

Updated September 14, 2018 - 9:10 am

Editor’s note: This is Part 2 of the coverage on an energy choice forum focusing on energy choice. Watch for additional coverage of the forum in coming editions.

A forum was held in September at Valley Electric Association’s conference center that brought information about a measure on the November ballot about energy choice (Question 3).

A panel filled with representatives from the yes and no camps, along with a neutral party, spent more than an hour on concerns and topics surrounding a decision in the hands of voters across the state.

At issue is whether to amend the state’s Constitution to require the “Legislature to provide by law for an open, competitive retail electricity market in Nevada” by July 1, 2023, documents with the secretary of state’s website show.

The passage would bring about the end of monopolies in the state such as NV Energy and prohibit the “grant of monopolies and exclusive franchises for the generation of electricity,” the documents at the secretary of state’s office stated.

This is the second iteration of coverage on the Sept. 6 forum that was part of a quarterly Valley Electric Ambassadors meeting. This portion of a series focusing on that forum centers on a question of, from a provider’s perspective, how energy choice would affect providers in the state, though other information from the event may been added for context.

Questions asked of panelists were formed by Valley’s Ambassador Legislative Committee on a ballot measure known as the “Energy Choice Initiative.”

Arguments pulsed across to the dozens seated from the panelists; and for more than an hour, ambassadors and others were poised to listen to Dave Chase, executive director of the Nevadans for Affordable, Clean Energy Choices, for the yes side, and Devlin Daneshforouz, outreach director for the Coalition to Defeat Question 3, with the no camp, hash it out on stage.

Meredith Levine, director of economic policy for the Kenny Guinn Center for Policy Priorities, who was the primary author of a report surrounding Question 3, “Restructuring the Electricity Market in Nevada? Possibilities, Prospects and Pitfalls,” for the center, explained why it’s hard to ascertain what would happen in the rural parts of the state if Question 3 were to pass and later was implemented by state regulators during the forum.

“The answer that I’m here to tell you that is we’ve absolutely no idea,” she said.

Looking to Texas

Levine used Texas, where the state’s Legislature voted to restructure its energy market in 1999, as a comparison to what is happening in Nevada. Texas exempted municipally-owned utilities and cooperative utilities, according to Levine.

“In Texas, again, there’s that carve out, so the law applies differently,” she said. “What is different with this constitutional amendment is that it enshrines a right to the provision of electricity service. That means everyone can be his or her own generator of electricity. That means a person can make a choice about electricity providers.”

Levine said there were concerns raised in the rural communities in Nevada that there could be a chance rates could rise if there was a loss in “provider base,” which would cause fixed energy rates to rise. She cautioned that this was not included in the Guinn Center’s report because they couldn’t make a verified claim of that, though it was still a concern that was raised.

“We, again, do not know that answer as to what would happen,” she said. “It’s something that would be worked out in the implementation phase. It could work out very beneficially. It could work out very negatively. We have to wait, should this pass, for the Legislature to make a determination.”

Levine’s response stemmed from statements made by the no camp’s Daneshforouz, who was expressing some concerns he said he had heard from other rural co-ops in the state.

“Again, one of the big issues there is how can they plan when they’re not sure what their market base or what the member-owners will look like,” he said. “If the fixed cost is passed along to member-owners; again, if member-owners leave, those costs have to get passed along to a smaller base—increasing costs.”

With the implementation of energy choice, there is a possibility of multiple providers to come into Valley’s market territory and compete with the co-op, he pointed out.

Chase, who was representing the yes camp, didn’t see much of a possibility of Valley’s number of member-owners declining if Question 3 were to pass, and called Daneshforouz’s statements a scare tactic.

A closer look

During a question and answer session, Angela Evans, interim CEO of Valley Electric, stated the co-op foresees the opposite occurring if the initiative were to pass: “Valley Electric doesn’t see that the energy choice initiative would take business away from the cooperative, but we see it as an opportunity for us to provide energy beyond our service territory.”

Valley Electric, and one of its subsidiaries, have given a total of $100,000 in monetary contributions to Nevadans for Affordable, Clean Energy Choices, a political action committee in support of Question 3’s passage, according to campaign finance records with the secretary of state’s office.

Other backers of Nevadans for Affordable, Clean Energy Choices include Las Vegas Sands Corp. and Switch.

Daneshforouz also raised a concern on how Energy Choice was being put forth, as a constitutional amendment.

“They’re asking voters to vote on something before the plan is even finalized—before we actually know what the Legislature is going to implement,” he said. “That’s a big problem.”

Chase, who again is on the yes side, said it would be difficult to get legislation passed on energy choice due to the lobbying power of NV Energy, which is also the main backer of a political action committee, the Coalition to Defeat Question 3, which is fighting against the measure’s passage.

“What Question 3 does is guarantee your right to energy providers and leaves the details to the Legislature, as frankly, it should be, but you’ve got to remove the enormous amount of power that NV Energy has to get it done,” Chase said.

Election of 2016

The measure was passed by the electorate in 2016 by more than 72 percent of the voters on the yes side. Since Question 3 is a constitutional amendment, the measure must pass through two election cycles before being enshrined into the state’s Constitution.

Daneshforouz pushed back on some of Chase’s statements over the need for a constitutional amendment because of NV Energy’s lobbyists making it difficult to get legislation passed.

Daneshforouz said Chase stated “that we have to do it through a constitutional amendment because NV Energy’s lobbyists control the Legislature; we can’t trust the Legislature. And in the same breath, he’s telling us that the Legislature is going to get this right and none of these problems that we’ve seen in other states will occur in Nevada or for Valley Electric Association member-owners or for the co-op and northern Nevada rural areas.”

Daneshforouz went on to argue that many of the state’s rural electric cooperatives, a large majority of them are against Question 3’s passage, are taking that position “because it affects the way they can run their business.”

The Pahrump Valley Times is an affiliate publication of the Las Vegas Review-Journal, which is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.

Contact reporter Jeffrey Meehan at jmeehan@pvtimes.com

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