Assembly Bill No. 429–Assemblymen Hettrick, Hardy, Geddes, Knecht, Beers, Brown, Goicoechea, Grady, Griffin, Gustavson, Mabey, Marvel and Sherer

 

CHAPTER..........

 

AN ACT relating to energy; making various changes relating to net metering and renewable energy; authorizing the Director of the Office of Energy within the Office of the Governor to develop a program to distribute money in the form of grants, incentives or rebates to pay or defray the costs for persons to acquire, install or improve net metering systems; revising provisions governing the regulation of net metering; revising the definition of renewable energy to include waterpower for the purposes of the portfolio standard for renewable energy for certain providers of electric service and for net metering and optional pricing; revising the provisions governing the portfolio standard to include energy from a qualified energy recovery process; transferring money from the Public Utilities Commission Regulatory Fund to the Office of Energy; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

    Section 1. Chapter 701 of NRS is hereby amended by adding

thereto the provisions set forth as sections 2 and 3 of this act.

    Sec. 2.  “Net metering system” has the meaning ascribed to it

in NRS 704.771.

    Sec. 3.  1.  The Director shall develop a program to

distribute money, within the limits of legislative appropriation, in

the form of grants, incentives or rebates to persons to pay or

defray, in whole or in part, the costs for those persons to acquire,

install or improve net metering systems, if the Director determines

that the distribution of money to a person for that purpose will

encourage, promote or stimulate:

    (a) The development or use of sources of renewable energy in

the State or the development of industries or technologies that use

sources of renewable energy in the State;

    (b) The conservation of energy in the State, the diversification

of the types of energy used in the State or any reduction in the

dependence of the State on foreign sources of energy;

    (c) The protection of the natural resources of the State or the

improvement of the environment;

    (d) The enhancement of existing utility facilities or any other

infrastructure in the State or the development of new utility

facilities or any other infrastructure in the State; or

    (e) The investment of capital or the expansion of business

opportunities in the State or any growth in the economy of the

State.

    2.  The Director may adopt any regulations that are necessary

to carry out the provisions of this section.

    3.  The Director shall not distribute money to any person

pursuant to this section unless:

    (a) The person complies with any requirements that the

Director adopts by regulation; and

    (b) The distribution of the money is consistent with one or

more of the public purposes set forth in paragraphs (a) to (e),

inclusive, of subsection 1.

    4.  As used in this section, “person” includes, without

limitation, any state or local governmental agency or entity.

    Sec. 4.  NRS 701.020 is hereby amended to read as follows:

    701.020  As used in this chapter, unless the context otherwise

requires, the words and terms defined in NRS 701.030 to 701.090,

inclusive, and section 2 of this act have the meanings ascribed to

them in those sections.

    Sec. 5.  NRS 701.380 is hereby amended to read as follows:

    701.380  1.  The Task Force shall:

    (a) Advise the Office of Energy in [the] :

        (1) The development and periodic review of the

comprehensive state energy plan with regard to the use of renewable

energy and the use of measures which conserve or reduce the

demand for energy or which result in more efficient use of energy.

        (2) The distribution of money to persons pursuant to

section 3 of this act to pay or defray, in whole or in part, the costs

for those persons to acquire, install or improve net metering

systems.

    (b) Coordinate its activities and programs with the activities and

programs of the Office of Energy, the Consumer’s Advocate and the

Public Utilities Commission of Nevada and other federal, state and

local officers and agencies that promote, fund, administer or operate

activities and programs related to the use of renewable energy and

the use of measures which conserve or reduce the demand for

energy or which result in more efficient use of energy.

    (c) Spend the money in the Trust Fund for Renewable Energy

and Energy Conservation to:

        (1) Educate persons and entities concerning renewable

energy and measures which conserve or reduce the demand for

energy or which result in more efficient use of energy.

        (2) Create incentives for investment in and the use of

renewable energy and measures which conserve or reduce the

demand for energy or which result in more efficient use of energy.

        (3) Distribute grants and other money to establish programs

and projects which incorporate the use of renewable energy and

measures which conserve or reduce the demand for energy or which

result in more efficient use of energy.

        (4) Conduct feasibility studies, including, without limitation,

[a feasibility study] any feasibility studies concerning the

establishment or expansion of [an incentive fund,] any grants ,

incentives, rebates or other programs to enable or assist [residential,

small commercial and agricultural customers] persons to reduce the

cost of purchasing on-site generation systems, net metering systems

and distributed generation systems that use renewable energy.

    (d) Take any other actions that the Task Force deems necessary

to carry out its duties, including, without limitation, contracting with

consultants, if necessary, for the purposes of program design or to

assist the Task Force in carrying out its duties.

    2.  The Task Force shall prepare an annual report concerning its

activities and programs and submit the report to the Legislative

Commission and the Governor on or before January 30 of each year.

The annual report must include, without limitation:

    (a) A description of the objectives of each activity and program;

    (b) An analysis of the effectiveness and efficiency of each

activity and program in meeting the objectives of the activity or

program;

    (c) The amount of money distributed for each activity and

program from the Trust Fund for Renewable Energy and Energy

Conservation and a detailed description of the use of that money for

each activity and program;

    (d) An analysis of the coordination between the Task Force and

other officers and agencies; and

    (e) Any changes planned for each activity and program.

    3.  As used in this section[:

    (a) “Distributed] , “distributed generation system” means a

facility or system for the generation of electricity that is in close

proximity to the place where the electricity is consumed.

    [(b) “Net metering system” has the meaning ascribed to it in

NRS 704.771.]

    Sec. 6.  Chapter 704 is hereby amended by adding thereto a

new section to read as follows:

    1.  “Qualified energy recovery process” means a system with a

nameplate capacity of not more than 15 megawatts that converts

the otherwise lost energy from:

    (a) The heat from exhaust stacks or pipes used for engines or

manufacturing or industrial processes; or

    (b) The reduction of high pressure in water or gas pipelines

before the distribution of the water or gas,

to generate electricity if the system does not use additional fossil

fuel or require a combustion process to generate such electricity.

    2.  The term does not include any system that uses energy, lost

or otherwise, from a process whose primary purpose is the

generation of electricity, including, without limitation, any process

involving engine-driven generation or pumped hydrogeneration.

    Sec. 7.  NRS 704.771 is hereby amended to read as follows:

    704.771  “Net metering system” means a facility or energy

system for the generation of electricity that:

    1.  Uses renewable energy as its primary source of energy to

generate electricity;

    2.  Has a generating capacity of not more than [10] 30

kilowatts;

    3.  Is located on the customer-generator’s premises;

    4.  Operates in parallel with the utility’s transmission and

distribution facilities; and

    5.  Is intended primarily to offset part or all of the customer-

generator’s requirements for electricity.

    Sec. 8.  NRS 704.7801 is hereby amended to read as follows:

    704.7801  As used in NRS 704.7801 to 704.7828, inclusive,

and section 6 of this act, unless the context otherwise requires, the

words and terms defined in NRS 704.7805 to 704.7818, inclusive,

have the meanings ascribed to them in those sections.

    Sec. 8.5.  NRS 704.7805 is hereby amended to read as follows:

    704.7805  “Portfolio standard” means a portfolio standard for

renewable energy and energy from a qualified energy recovery

process established by the Commission pursuant to NRS 704.7821.

    Sec. 9.  NRS 704.7811 is hereby amended to read as follows:

    704.7811  1.  “Renewable energy” means:

    (a) Biomass;

    (b) Geothermal energy;

    (c) Solar energy; [and]

    (d) Waterpower; and

    (e) Wind.

    2.  The term does not include coal, natural gas, oil, propane or

any other fossil fuel, or nuclear energy.

    3.  As used in this section, “waterpower” means power derived

from standing, running or falling water which is used for any

plant, facility, equipment or system to generate electricity if the

generating capacity of the plant, facility, equipment or system is

not more than 30 megawatts. Except as otherwise provided in this

subsection, the term includes, without limitation, power derived

from water that has been pumped from a lower to a higher

elevation if the generating capacity of the plant, facility,

equipment or system for which the water is used is not more than

30 megawatts. The term does not include power:

    (a) Derived from water stored in a reservoir by a dam or

similar device, unless:

        (1) The water is used exclusively for irrigation;

        (2) The dam or similar device was in existence on

January 1, 2003; and

        (3) The generating capacity of the plant, facility, equipment

or system for which the water is used is not more than 30

megawatts;

    (b) That requires a new or increased appropriation or

diversion of water for its creation; or

    (c) That requires the use of any fossil fuel for its creation,

unless:

        (1) The primary purpose of the use of the fossil fuel is not

the creation of the power; and

        (2) The generating capacity of the plant, facility, equipment

or system for which the water is used is not more than 30

megawatts.

    Sec. 10.  NRS 704.7815 is hereby amended to read as follows:

    704.7815  “Renewable energy system” means:

    1.  A facility or energy system that:

    (a) Uses renewable energy or energy from a qualified energy

recovery process to generate electricity; and

    (b) Transmits or distributes the electricity that it generates from

renewable energy or energy from a qualified energy recovery

process via:

        (1) A power line which is dedicated to the transmission or

distribution of electricity generated from renewable energy or

energy from a qualified energy recovery process and which is

connected to a facility or system owned, operated or controlled by a

provider of electric service; or

        (2) A power line which is shared with not more than one

facility or energy system generating electricity from nonrenewable

energy and which is connected to a facility or system owned,

operated or controlled by a provider of electric service.

    2.  Asolar [thermal] energy system that reduces the

consumption of [electricity.] electricity, natural gas or propane.

    3.  A net metering system used by a customer-generator

pursuant to NRS 704.766 to 704.775, inclusive.

    Sec. 11.  NRS 704.7821 is hereby amended to read as follows:

    704.7821  1.  For each provider of electric service, the

Commission shall establish a portfolio standard for renewable

energy [.] and energy from a qualified energy recovery process.

The portfolio standard must require each provider to generate or

acquire electricity from renewable energy systems in an amount that

is:

    (a) For calendar years 2003 and 2004, not less than 5 percent of

the total amount of electricity sold by the provider to its retail

customers in this state during that calendar year.

    (b) For calendar years 2005 and 2006, not less than 7 percent of

the total amount of electricity sold by the provider to its retail

customers in this state during that calendar year.

    (c) For calendar years 2007 and 2008, not less than 9 percent of

the total amount of electricity sold by the provider to its retail

customers in this state during that calendar year.

    (d) For calendar years 2009 and 2010, not less than 11 percent

of the total amount of electricity sold by the provider to its retail

customers in this state during that calendar year.

    (e) For calendar years 2011 and 2012, not less than 13 percent

of the total amount of electricity sold by the provider to its retail

customers in this state during that calendar year.

    (f) For calendar year 2013 and for each calendar year thereafter,

not less than 15 percent of the total amount of electricity sold by the

provider to its retail customers in this state during that calendar year.

    2.  In addition to the requirements set forth in subsection 1, the

portfolio standard for each provider must require that:

    (a) Of the total amount of electricity that the provider is required

to generate or acquire from renewable energy systems during each

calendar year, not less than 5 percent of that amount must be

generated or acquired from solar renewable energy systems.

    (b) If the provider acquires electricity from a renewable energy

system pursuant to a renewable energy contract with another party:

        (1) The term of the renewable energy contract must be not

less than 10 years, unless the other party agrees to a renewable

energy contract with a shorter term; and

        (2) The terms and conditions of the renewable energy

contract must be just and reasonable, as determined by the

Commission. If the provider is a public utility and the Commission

approves the terms and conditions of the renewable energy contract

between the provider and the other party, the renewable energy

contract and its terms and conditions shall be deemed to be a

prudent investment and the provider may recover all just and

reasonable costs associated with the renewable energy contract.

    3.  If, for the benefit of one or more of its retail customers in

this state, the provider has subsidized, in whole or in part, the

acquisition or installation of a solar [thermal] energy system which

qualifies as a renewable energy system and which reduces the

consumption of electricity, the total reduction in the consumption of

electricity during each calendar year that results from the solar

[thermal] energy system shall be deemed to be electricity that the

provider generated or acquired from a renewable energy system for

the purposes of complying with its portfolio standard.

    4.  The Commission may adopt regulations that establish a

system of renewable energy credits that may be used by a provider

to comply with its portfolio standard.

    5.  Except as otherwise provided in subsection 6, each provider

shall comply with its portfolio standard during each calendar year.

    6.  If, for any calendar year, a provider is unable to comply with

its portfolio standard through the generation of electricity from its

own renewable energy systems or, if applicable, through the use of

renewable energy credits, the provider shall take actions to acquire

electricity pursuant to one or more renewable energy contracts. If

the Commission determines that, for a calendar year, there is not or

will not be a sufficient supply of electricity made available to the

provider pursuant to renewable energy contracts with just and

reasonable terms and conditions, the Commission shall exempt the

provider, for that calendar year, from the remaining requirements of

its portfolio standard or from any appropriate portion thereof, as

determined by the Commission.

    7.  The Commission shall adopt regulations for the

determination of just and reasonable terms and conditions for the

renewable energy contracts that a provider of electric service must

enter into to comply with its portfolio standard.

    8.  As used in this section:

    (a) “Renewable energy contract” means a contract to acquire

electricity from one or more renewable energy systems owned,

operated or controlled by other parties.

    (b) “Terms and conditions” includes, without limitation, the

price that a provider of electric service must pay to acquire

electricity pursuant to a renewable energy contract.

    Sec. 11.5. NRS 704B.320 is hereby amended to read as

follows:

    704B.320  1.  For eligible customers whose loads are in the

service territory of an electric utility that primarily serves densely

populated counties, the aggregate amount of energy that all such

eligible customers purchase from providers of new electric

resources before July 1, 2003, must not exceed 50 percent of the

difference between the existing supply of energy generated in this

state that is available to the electric utility and the existing demand

for energy in this state that is consumed by the customers of the

electric utility, as determined by the Commission.

    2.  An eligible customer that is a nongovernmental commercial

or industrial end-use customer whose load is in the service territory

of an electric utility that primarily serves densely populated counties

shall not purchase energy, capacity or ancillary services from a

provider of new electric resources unless, as part of the proposed

transaction, the eligible customer agrees to:

    (a) Contract with the provider to purchase:

        (1) An additional amount of energy which is equal to 10

percent of the total amount of energy that the eligible customer is

purchasing for its own use under the proposed transaction and which

is purchased at the same price, terms and conditions as the energy

purchased by the eligible customer for its own use; and

        (2) The capacity and ancillary services associated with the

additional amount of energy at the same price, terms and conditions

as the capacity and ancillary services purchased by the eligible

customer for its own use; and

    (b) Offers to assign the rights to the contract to the electric

utility for use by the remaining customers of the electric utility.

    3.  If an eligible customer is subject to the provisions of

subsection 2, the eligible customer shall include with its application

filed pursuant to NRS 704B.310 all information concerning the

contract offered to the electric utility that is necessary for

the Commission to determine whether it is in the best interest of the

remaining customers of the electric utility for the electric utility to

accept the rights to the contract. Such information must include,

without limitation, the amount of the energy and capacity to be

purchased under the contract, the price of the energy, capacity and

ancillary services and the duration of the contract.

    4.  Notwithstanding any specific statute to the contrary,

information concerning the price of the energy, capacity and

ancillary services and any other terms or conditions of the contract

that the Commission determines are commercially sensitive:

    (a) Must not be disclosed by the Commission except to the

regulatory operations staff of the Commission, the Consumer’s

Advocate and his staff and the electric utility for the purposes of

carrying out the provisions of this section; and

    (b) Shall be deemed to be confidential for all other purposes,

and the Commission shall take such actions as are necessary to

protect the confidentiality of such information.

    5.  If the Commission determines that the contract:

    (a) Is not in the best interest of the remaining customers of the

electric utility, the electric utility shall not accept the rights to

the contract, and the eligible customer is entitled to all rights to the

contract.

    (b) Is in the best interest of the remaining customers of the

electric utility, the electric utility shall accept the rights to

the contract and the eligible customer shall assign all rights to the

contract to the electric utility. A contract that is assigned to the

electric utility pursuant to this paragraph shall be deemed to be an

approved part of the resource plan of the electric utility and a

prudent investment, and the electric utility may recover all costs for

the energy, capacity and ancillary services acquired pursuant to the

contract. To the extent practicable, the Commission shall take

actions to ensure that the electric utility uses the energy, capacity

and ancillary services acquired pursuant to each such contract only

for the benefit of the remaining customers of the electric utility that

are not eligible customers, with a preference for the remaining

customers of the electric utility that are residential customers with

small loads.

    6.  The provisions of this section do not exempt the electric

utility, in whole or in part, from the requirements imposed on the

electric utility pursuant to NRS 704.7801 to 704.7828, inclusive, to

comply with its portfolio standard for renewable energy [.] and

energy from a qualified energy recovery process. The Commission

shall not take any actions pursuant to this section that conflict with

or diminish those requirements.

    7.  As used in this section, “Consumer’s Advocate” means the

Consumer’s Advocate of the Bureau of Consumer Protection in the

Office of the Attorney General.

    Sec. 12.  1.  Not later than 30 days after the effective date of

this act, the Public Utilities Commission of Nevada shall transfer the

sum of $250,000 from its reserve account in the Public Utilities

Commission Regulatory Fund, created by NRS 703.147, to an

account in the State General Fund for use by the Director of the

Office of Energy within the Office of the Governor to carry out the

provisions of section 3 of this act.

    2.  The Director of the Office of Energy shall use the money

transferred pursuant to this section only for the purposes set forth in

section 3 of this act.

    Sec. 13.  This act becomes effective upon passage and

approval.

 

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