MINUTES OF THE meeting
of the
ASSEMBLY Committee on Commerce and Labor
Seventy-Second Session
April 7, 2003
The Committee on Commerce and Laborwas called to order at 2:12 p.m., on Monday, April 7, 2003. Chairman David Goldwater presided in Room 4100 of the Legislative Building, Carson City, Nevada, and, via simultaneous videoconference, in Room 4401 of the Grant Sawyer State Office Building, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
Note: These minutes are compiled in the modified verbatim style. Bracketed material indicates language used to clarify and further describe testimony. Actions of the Committee are presented in the traditional legislative style.
COMMITTEE MEMBERS PRESENT:
Mr. David Goldwater, Chairman
Ms. Barbara Buckley, Vice Chairman
Mr. Bob Beers
Mr. David Brown
Mrs. Dawn Gibbons
Ms. Chris Giunchigliani
Mr. Josh Griffin
Mr. Lynn Hettrick
Mr. Ron Knecht
Ms. Sheila Leslie
Mr. John Oceguera
Mr. David Parks
Mr. Richard Perkins
COMMITTEE MEMBERS ABSENT:
Mr. Morse Arberry Jr. (excused)
GUEST LEGISLATORS PRESENT:
Assemblyman Jason Geddes, Washoe County, District No. 24
Assemblywoman Valerie Weber, Clark County, District No. 5
STAFF MEMBERS PRESENT:
Vance Hughey, Committee Policy Analyst
Diane Thornton, Senior Research Analyst
Wil Keane, Committee Counsel
Patricia Blackburn, Committee Secretary
OTHERS PRESENT:
Ernest E. Adler, Kilpatrick, Johnston & Adler, representing IBEW
Joseph Johnson, Government Affairs Consultant, Sunrise Sustainable Resources and the Toiyabe Chapter of the Sierra Club
Stephanie Licht, Legislative Consultant, Elko County
Patrick Barney, Owner, World Renew
Jolene M. Supp, City Manager, City of Wells, Nevada
Rusty A. Tybo, Mayor, City of Wells, Nevada
Mike Nannini, County Commissioner, Elko County
Alfredo Alonso, Legislative Advocate, Nevada State Board of Optometry
Kurt Alleman, O.D., President of the Board of Optometry
Michael Alonso, Legislative Advocate, Nevada State Board of Opticians
Jeanette Belz, Legislative Advocate, Nevada Ophthalmological Society
David Stuart, President of the State Board of Dispensing Opticians
Rota Rosaschi, Chief, Employment and Support Services, State of Nevada Department of Human Resources, Welfare Division
Rose McKinney-James, Legislative Advocate, Energy Works Consulting and Power Light Solar, and Clark County School District
Thelma Clark, Citizen
Marion Barritt, Sunrise Sustainable Resources
Neena Laxalt, Government Relations Consultant, Natural Lighting Company from Glendale, Arizona
Judy Stokey, Director Public Policy, Nevada Power/Sierra Pacific
Kathleen Drakulich, Associate General Counsel, Sierra Pacific/Nevada Power
Jordan Robbins, Las Vegas Solar Electric
James Wadhams, Legislative Advocate, Nevada Rural Electric Association
Carl Linvill, Economic and Energy Advisor, Office of the Governor
Susan L. Fisher, Legislative Advocate, Barrick Goldstrike Mines
David Noble, Assistant General Counsel, State of Nevada, Public Utilities Commission
Danny Thompson, Executive Secretary/Treasurer, Nevada State AFL-CIO
George Sterzinger, Executive Director, Renewable Energy Policy Project
Chris Brooks, Las Vegas Solar Electric
Bob Cooper, Senior Regulatory Analyst, Bureau of Consumer Protection
Nancyann Leeder, State of Nevada, Nevada Attorney for Injured Workers
Barbara Gruenewald, Nevada Trial Lawyers Association
Jack Jeffrey, Legislative Advocate, Southern Nevada Builders and Construction Trades
Donald Jayne, Legislative Advocate, Nevada Self Insured Association
Leslie Bell, President, Nevada Self Insured Association
Bob Ostrovsky, Legislative Advocate, Nevada Resort Association
Christi Mosher, RN, CCM, Pro Group Management
Alice Molasky-Arman, Commissioner of Insurance, State of Nevada, Department of Business and Industry
Chairman Goldwater:
We will bring the hearing on Commerce and Labor to order. All the members are present except for Mr. Arberry who is excused; a quorum is not here so we will start as a subcommittee. As soon as we get a quorum I will announce it and we will get started. Because we have a time issue for one of the witnesses, we will start with AB 296. Mr. Geddes.
Assembly Bill 296: Excludes tires from definition of "biomass" for purposes of energy policy, public utilities, portfolio standard for renewable energy net metering and optional pricing. (BDR 58-1163)
Assemblyman Jason Geddes, District No. 22 (Clark County):
[Introduced himself] A.B. 296 is one of those very simple bills that is not simple at all. In serving on the Rural Task Force for Renewable Energy for the state, one of the things that just popped up into my head and stuck in my craw a little bit was that under the definitions that were established for [Nevada Revised Statutes] 372 and [NRS] 661 the use of biomass in the generation of electricity and green energy credits is in there and when you go into the definition of biomass, you can see municipal waste is one of the options that can count for biomass credit. In going through that process, and breaking it out, there are three different developers who are looking to develop tire facilities in the state. They have three different technologies in which they take used tires and they generate electricity. As I said, it was a personal little thing that stuck in my craw and that was the inspiration for A.B. 296, which my colleague from southern Nevada, Ms. Weber, was willing to introduce for me. She thought it was a good idea. I passed out an amendment (Exhibit C) to A.B. 296. After I dropped this bill to remove tires from the definitions and specifically exclude tires, I met with the group from Wells who are working on developing a tire facility in which they receive used tires, microwave them, extract out the carbon black, steel, and oil from the tires and then burn the oil to generate electricity. At that point in the discussion . . .
Chairman Goldwater:
Just one second, Mr. Geddes, just for the record, a quorum is now present and we are a full Committee of Commerce and Labor.
Assemblyman Geddes:
We started discussing the project in tires and how tires are composed and what portion of the tire . . . thank you, Ms. Weber. Here is the true sponsor of the bill . . . and so we had a sit-down discussion with some other colleagues and the group from Wells to talk about the tires. We broke it all the way down to what portion of the tire is renewable. In the current definition, there is some question as to whether tires are renewable or not. The broad definition of municipal waste seems to indicate that tires are municipal waste and that they would count.
The PUC [Public Utilities Commission] has not ruled on the subject and will not rule on the subject until the docket is opened. In going through it, we had discussed, back and forth, what percentage of tires are truly renewable and the one technology that I was talking about, as I mentioned, it is a great technology; it is very environmentally friendly. They extract carbon black for recycling; they extract steel for recycling; they extract the oil and burn it to generate electricity, all of which is great stuff, and I think is very beneficial, but it still stuck in my craw if it was renewable or not. We did some research as to what percent of tires are derived from synthetic rubber and what percent are derived from natural rubber. The Legislative Counsel Bureau found a survey that was performed. It found that 30 percent of tires were derived from natural rubber. I talked to the group from Wells and they said that that number did not include heavy-duty tires or airplane tires, so I went back out with some references that they had given me.
I gave that to the Legislative Counsel Bureau staff and we went around and frankly, this is a question that people have not asked anywhere. We were calling the vice presidents of Michelin and Goodyear and the Tire Council and the EPA (U.S. Environmental Protection Agency) and trying to find an idea of what the percentage of natural rubber was. The best number we could find was from the former vice president of Goodyear who stated that, in his best guess, he would be willing to go up to 35 percent, maybe 37 if stretching it. In looking at that we rounded up to .4 and that is where we derived the .4 credit. What we are proposing in A.B. 296 is for every megawatt of energy that is produced in the credit trading system and anything derived from a tire facility would get a .4 credit. That is the sum of A.B. 296. Ms. Weber, would you like to add anything?
Assemblywoman Valerie Weber, Clark County District No. 5:
I am here in full support of my colleague's intent to move this bill forward, and I am glad I could be of help. My colleague here, "Mr. Green Energy," I think has fascinated quite a lot of us.
Assemblywoman Giunchigliani:
I know you just explained it, but could you tell me one more time? I know how the credit was devised. What is the current [credit system] and how was that one devised, then what is the change that you are suggesting in your amendment?
Assemblyman Geddes:
In the current law, when the renewable portfolio standard was put together, it was set out that biomass could count for the renewable portfolio standard. Within the definition of biomass, one of the categories is municipal waste. Municipal waste would be pretty much anything that goes into the landfill, which includes tires.
Assemblywoman Giunchigliani:
I think Vivian Freeman, years and years ago, tried to deal with something on tires. Don't they also use them to rebuild some highways or something like that now? Are they not using some sort of a process?
Assemblyman Geddes:
Yes.
Assemblywoman Giunchigliani:
But one caught on fire and they could not put it out or something?
Assemblyman Geddes:
That is correct, they created a few procedures. Arizona has a great program in taking used tires, shredding them, and reprocessing them into the tire mix or into the asphalt to make the roads. It was tried in Nevada and it was not nearly as successful. There are a few shredders built down in southern Nevada to do just that, but it was not successful in the roads here.
Assemblywoman Giunchigliani:
It is my understanding that in Europe they are doing a quieter roadway now with some kind of a mix, and I think NDOT [Nevada Department of Transportation] is taking a look at that. I do not know if this would help or not, but it sounds like it might.
Chairman Goldwater:
Jason, I am trying to think who was on the [A.B.] 661 Committee last time, but does the production, or any part of how they derive the 33 percent renewable portion of the tire, cause any sort of environmental problems in that production itself?
Assemblyman Geddes:
I can only speak with my limited knowledge of the Wells project, and they would probably be the experts to talk on it, but it appears no. They have submitted an application to the Division of Environmental Protection for the environmental standards and the release of compounds out of their process. If they meet all the standards of NDP, it should not be a problem.
Ernest E. Adler, Legislative Advocate, IBEW:
I was not going to testify on this, but I was here during the original bill. I am neither for nor against, but this was an intentional act, making tires . . . I worked with Vivian Freeman on it, and essentially the reason this was done is that, at the time, there was a proposal for a fairly large tire burning power plant in Clark County. I think many of you remember that. This was an incentive to get people to burn tires because we were having problems. If you try to bury a tire in a waste dump, it pops to the surface. We had a real problem with what we do with tires. So, this was not an accident in the definition. It was debated and that was what people decided to do at that time. You can decide what you want to do now. That is what laws are for, to be changed. It was an intentional action, and essentially they had a plant where they would grind the tires, burn them, and then, I think, the steel and other stuff would come out and they would recycle it. The testimony, at that time, was that plant they were working on was about as clean as a natural gas plant.
Chairman Goldwater:
Mr. Adler, was it your testimony that you did not want to change this? You just wanted to change the amount of credit they get in the portfolio standard?
Ernie Adler:
Yes. I was only saying that was how we got to where we got.
Chairman Goldwater:
Is there anybody else here to testify in support of A.B. 296? Is there anyone in Las Vegas? I see Pat Wilson is there, signed in for the bill. Joe Johnson, opposition or . . .?
Joseph Johnson, Government Affairs Consultant, representing Sunrise Sustainable Resources and the Toiyabe Chapter of the Sierra Club:
We signed in in support of the original bill and would also support the amendment.
[There were no further proponents of the bill. The Chairman invited opponents to come forward to testify.]
Stephanie Licht, Legislative Consultant, Elko County:
[Introduced herself] We have two sets of materials that we would like to pass down the bench. When we are through, we would be happy to pick them up down at the end so that Mr. Barney can take them back. Mr. Chairman, members of the Assembly Commerce and Labor Committee, today I am talking about something a little out of my field: tires. Among our witnesses today, we have Patrick Barney of World Renew, who will be describing the microwave reverse polymerization process; Jolene Supp, Wells City Manager; Rusty Tybo, Mayor of Wells; Commissioner Mike Nannini of the Elko County Board of Commissioners; City Councilman Vicky Dedman; and our star witness, "Tommy Tire" [a tire display].
Having been involved with this, I received a call from Wells and they said "we need to speak with Mr. Geddes about this." Over the past year, Mr. Barney has been working with the City of Wells and Elko County, talking about his reverse polymerization process that is achieved by microwaving these tires. It is environmentally friendly. He has also gone to Bonneville Power Administration, which is a federal agency that does have an interest in buying up renewable energy to fill renewable portfolio standards. Bonneville, by their own definition of renewable, does not include tires. However, most of the things that I found from the federal level that include tires in other biomass say that they leave the definition up to the states.
You heard Mr. Adler say that they had that same kind of conversation when the bill was originally put together that established this. We are opposed to the bill, as written, because it takes tires out of the biomass process and takes it out of that renewable. Taking it out of the renewable is a problem for us as this plant goes forward. To give you a little background, I am going to let the other witnesses testify and then wrap it up at the end, so I am going to turn it over to Mr. Barney.
Patrick Barney, Owner, World Renew:
[Introduced himself]
Chairman Goldwater:
Mr. Barney, could I ask you to stop. Because of the length of our agenda and the testimony of the previous witness, could you testify to the bill as amended, not changing the definition of biomass, but changing it to a 0.4 percent in the portfolio standard – is that enough, not too much?
Patrick Barney:
It does not work for this process and to be honest with you, Mr. Chairman, the 0.4 designation, I understand where that came from, that came from specifically the amount of natural rubber that is used in the tread of the tire, not in the whole tire itself. The sidewalls of tires, your passenger tires and your truck tires, are generally 85 percent natural rubber. That is in addition to that 0.4 designation that he got from his tread. We are opposed to the amendment as it stands.
Chairman Goldwater:
Do you want to continue with your testimony? I am sorry for the interruption.
Patrick Barney:
That is quite all right. I would like to tell you about an environmentally friendly reverse polymerization process. This process is 99 percent emission-free. It is not burning tires, nor is it high heat. This process uses microwaves to break down "Mr. Tommy Tire" there into its original components. Those three jars that were passed around are carbon black, steel, and oil. The oil that you see in that jar is used to produce electricity, not only enough electricity to provide sustainability for my plant, but an excess that would be put on the grid and sold to Bonneville Power Administration under their renewable energy portfolio, as long as Nevada classifies it as renewable. If Nevada denies the renewable classification, it does not fall under their portfolio. I have a considerable amount of information here (Exhibit D). I know that you folks are very busy and you do not have time for me to go through it. I will leave it for you; look it over at your leisure. With that, I would like to turn the floor over to Jolene Supp, City of Wells Manager.
Jolene Supp, City Manager, City of Wells:
[Introduced herself] I would like you to know that we have spent a tremendous amount of resources in our community trying to bring a large employer to the community. We now have that employer with World Renew, and that is one of the reasons why this bill is so critical to us in Wells. One of the things we are talking about here is the quantity of natural rubber in a tire, and I think it is important to know that renewable energy designations were formed from the Federal Energy Regulatory Commission [FERC], Department of Energy, to allow competitive sources of fuel supplies in the electrical industry without harmful emissions. That is probably one of the key portions that I see in the FERC designations.
[Ms. Supp continued.] Also, the federal EPA says that green power technologies and the importance to designate renewable energies are the tools used to promote new technologies, encourage new investments in renewable power sources, and very critically reducing adverse environmental impacts. That is something I wish you would focus on and I think that is very hard to determine as to how much adverse environmental impacts there are or how much are negated with respect to a .4 designation, with respect to renewable energies. I brought some pictures of our local community [pictures were displayed to the Committee]. Tires, whether stockpiled singly or by the millions are fire hazards.
In Elko County and Wells, we have seen range fires from lightning specifically. Tires left out in our area just compound those issues even more. Secondly, tires, because of the curvature of them, present great breeding grounds for mosquitoes and other rodents. I am sure you are all aware that West Nile virus is now in Utah, which is 60 miles from us in Wells. West Nile virus is transported from mosquitoes; tires are just excellent for that. Equine encephalitis could stand to bear some negative impacts on our wild horse herds in the area; Hantavirus disease from rodents that would find this as excellent nesting grounds, is definitely an issue for us. Thirdly, they end up littering our pristine public properties and ditches. If you are not familiar with this picture, this is one of Nevada's scenic byways, being the Angel Lake road up to the top of the hill, and you can see there are tires lined up on that BLM (Bureau of Land Management) property. They also place unneeded storage demands in our landfills. This not only affects our communities, but I would plead to you, to think about how that is affecting your own communities.
One of the things that I draw from all of this is wrecking yards, by their inability to do anything with tires, to me, become nothing but unlicensed landfills. Incidentally, you heard testimony a week or so ago in the Natural Resources Committee on A.B. 447 that stated solid waste needs to be recycled. I think that was great testimony. Nevada needs to start a movement to get rid of this waste, not to take on more. That is one of the things that concerns me about this current bill. I feel, and so does the Department of Energy, that tires are renewable products because they fit the definition established by the Department of Energy. That definition being,
1) They originate from a natural resource, rubber, which comes from rubber trees.
2) They reduce the demands on fossil fuels.
3) They are a potential hazard to human life as they exist prior to recycling but can be recycled using very environmentally friendly methods and used to produce energy as one of the recycling byproducts.
4) There is virtually an infinite supply of tires, over one and a half billion waste tires in the United States alone, 300 million added to our supply annually. The Rubber Manufacturer's Association estimates there is one scrap tire for every man, woman and child in the world that translates in the state of Nevada to over 2 million tires.
5) Through recycling, the burden placed on virgin carbon black, being a natural resource, is reduced because the products are being recycled and no longer needing the natural resource quite as much.
These issues are also reflected in Chapter 701 of the state's Energy Policy, which the mayor will speak about. To close, there are ever growing environmental issues created with tires being stockpiled, not only in Wells but the entire state. Any efforts available to us through energy creation and waste reduction should be exercised, especially with the renewable designation.
Chairman Goldwater:
I know that with your testimony, you don't think that Mr. Geddes' bill is to promote all those terrible things?
Jolene Supp:
Not at all. But I am very concerned of the reverse effects of it.
Chairman Goldwater:
So your testimony is, if the portfolio standard pulls out a fraction of what biomass currently is, then your business will leave Nevada entirely, or the proposed business?
Patrick Barney:
That is not necessarily true. It will just make it much more difficult to make it financially feasible within this state.
Assemblywoman Giunchigliani:
By any chance was your business . . . Do you go through the Economic Development Commission for purposes of tax abatements at all?
Patrick Barney:
I have spoken with them and I am aware of those. We have spoken specifically with the Economic Development people in Reno and I have also spoken with those in Elko County. I am aware of those abatements and I am putting in a $20 million plant and proposing almost 70 jobs.
Assemblywoman Giunchigliani:
I just was not sure if you had actually applied for that because that might be an offset of some sort.
Patrick Barney:
It will initially, but we are talking about ongoing revenues and this is a plant that will be around for hundreds of years.
Assemblywoman Giunchigliani:
As long as tires are around.
Patrick Barney:
We are going to be processing 2 million tires per year.
Assemblywoman Giunchigliani:
So, your concern, also, is how this definition might impact the competition for your business, because if you take tires away that you had been counting on for the purposes of . . .?
Patrick Barney:
It will impact my business, specifically in the respect that I have a contract with BPA (Bonneville Power Administration) as we speak. That is under their renewable energies portfolio. That is dependent on Nevada's classification. If tires are excluded from the renewable energies, that contract with BPA is null and void because it is under their renewable energies portfolio.
Assemblywoman Giunchigliani:
I am confused. I will wait and see if Mr. Geddes might have a response, if the Chairman wishes, so it is clearer to me what the amendment does and does not do.
Stephanie Licht:
Coming up next is Rusty Tybo, Mayor of the City of Wells, and Commissioner Mike Nannini from the Elko County Commission.
Rusty A. Tybo, Mayor, City of Wells, Nevada:
[Introduced himself] I am proud to say I was born and raised in Wells. I have spent the last 14 years serving the community of Wells as a city councilman, and for the past four years I have been the mayor of Wells. I have some personal goals that I have tried to encourage and work towards in the community. Primarily, I want to improve our community environment and our economic conditions. I am convinced that our partnership with World Renew will allow us to achieve my goals for our community in an environmentally safe manner. As Jolene said, I would just like to briefly refer to the energy policy [NRS] 701[.010], the general provisions, and in [subsection] (d) it specifically addresses environmental protection and economic development for the state. Item (f) specifically addresses the need to accelerate research and development of sources of renewable energy. Finally, it addresses the economical feasibility of pursuing renewable resources and recycling. We feel very strongly that the proposed development in Wells addresses and promotes all of these points.
Mike Nannini, County Commissioner, Elko County:
[Introduced himself] Elko County, as you can see from the pictures [Ms. Licht held up pictures for the Committee to see], is dealing with solid waste issues all of the time. Senator Rhoads, Assemblyman Carpenter, Vern Rossi from the state EPA, Mayor Tybo, Councilman Dedman, City Manager, Jolene Supp, and I have toured the pilot plant in Toronto, Canada, that created this microwave process and can see that it will not only benefit Elko County, but also the entire state of Nevada. The plant will bring worldwide cutting-edge technology to our area, along with a badly needed tax base, and over 60 jobs. We ask for your support today in an amendment or in defeating A.B. 296 so that we can facilitate our development.
Stephanie Licht:
In conclusion, we have heard testimony that this particular bill was brought forward because of Mr. Geddes' personal idea about tires, and he is not any happier with them than any of the rest of us. Our buddy down there, "Tommy Tire," is still going to be that tire. He still is going to present a problem. One question you need to ask yourself is, if this bill does not pass, what is the worst thing that could happen? Nothing. Tires will stay renewable. Elko will still be able to go forward with this plant. Bonneville Power will buy the extra megawatt of power that we produce, and everything will go on. The flip side of that is the tire plant may be built and if it is not renewable, we will not be able to sell that extra megawatt. We have a local Wells rural electric company that [could produce energy from the oil from the tire plant] you saw. Tires can be a renewable energy source, so that could be part of their renewable portfolio standard. Therefore, Mr. Chairman, for these reasons, if you decide to process the bill, we will be more than happy to work with Mr. Geddes and try to come to some sort of an understanding about it, otherwise . . .
Chairman Goldwater:
Are there any environmental downsides?
Stephanie Licht:
I would have to let Mr. Barney answer that. I do not know all the specific details, but as far as I know, they have applied for their solid waste permit from the Department of Environmental Protection. They have applied for their air quality permit. The materials show how the process works.
Patrick Barney:
Mr. Chairman, to answer your questions, there are no environmental downsides. We are 99.9 percent emission-free. We have applied for a Class 3 air quality permit, which is the lowest amount of emissions that is in the process of being reviewed by the air quality people at the NEP. We have also applied for our solid waste permit for a waste tire management facility. It is my understanding that around April 22, 2003, we will be in the public review period of that process.
Chairman Goldwater:
With your knowledge of the industry, are there any tire recycling processes that are environmentally hazardous?
Patrick Barney:
Yes. Anything to do with tires that includes incineration or high temperatures is environmentally unsound, simply because of the emissions that go out the stack.
Chairman Goldwater:
Thank you for your thorough presentation.
Stephanie Licht:
We appreciated the environmental downside of processing this bill, that there would be one less place right now going forward that could produce renewable energy, and "Tommy Tire" would be left on the side of the road.
Jolene Supp:
Mr. Chairman, you understand that this process is not burning or pyrolysis.
Chairman Goldwater:
I believe that was his original intent. There was some sort of environmentally hazardous procedure that was being included in the portfolio standard.
Chairman Goldwater:
Mr. Geddes? Summarize your proposal.
Assemblyman Geddes:
I wanted to clarify a few points that were brought up in the discussion. We have current laws to keep tires off of the public lands as it is. There are fees. I am not sure that this procedure would do anything to affect tires on public lands. I have no problem with incineration of tires as long as the air quality controls are there. If it is pyrolysis, if it is microwave, if it is incineration, as long as they meet their air quality permit, I am not sure it matters what technology is used as long as the emissions are controlled.
The recycling rate that I mentioned, the 30 percent, is what was generated. It is not just tread. The number that I got, and it does not go up based on the sidewall, this was the 2002 analysis from the Rubber Manufacturers Association of America when they did an assessment of U.S. scrap tire markets, and those numbers were based on them going in and pulling out scrap tires from tire processing facilities around the country and doing a random grab and determination of percent of natural rubber in those tires. So that is where the 30 percent came from. Building it up beyond 30 percent is when you bring in the other tires that are out there that have differing percents. What they grabbed were commercial tires.
The recycling is good. As I started off in my statement, in going through their processing, you can go to their Web site and see a very detailed demonstration of the process that they have. They are extracting carbon black for resale, recycle, and reuse. They are extracting steel for reuse. They are extracting oils to burn to generate energy, and I think it is a great, green process that they have there. One objection: I am not trying to stop the tires; I am just looking at a partial credit based on what is truly renewable. You can say tires are renewable now, and probably for 5 to 20 years, but when we look at the world oil reserves that are dropping, in the most conservative estimate we have 50 years. Some of the estimates are 20-25 years before we do not have enough oil. If we are going to take it in, the best use of this oil is to burn it or to not put it back into tires; I think it would be an injustice. The long term goal: we will be running out of oil, and I think they have come up with a great process to extract that oil and use it for other purposes. If we are going to burn it, we give them a partial credit based on the portion that is truly renewable, that 70 percent of the tire, or 60 percent of the tire that is synthetic, is not renewable. Once we use it, it is gone. That aspect, and how it fits into the contract with the BPA, is one question that I have asked. We have been trying to figure out an answer; if it is designated under RPS (Renewable Portfolio Standards) as renewable portfolio standard, whether it gets a 0.4 credit or a 2.0 credit, it is still RPS. I do not think it would do anything to invalidate the contract they have. They would only be getting 40 cents on the dollar versus a full dollar for those credits. But when you go to their Web site and you go through their entire process and the full recycling and then you factor in the economics of tire waste disposal, right now, in Washoe County, they are charging $4.50 for a commercial tire to go into the landfill. A heavy-duty tire is $20 or $25 to go into the landfill. If you factor in the economics of not paying that $4.50, to put into the landfill, to send it to someone like this and, based on their Web site, it is a moneymaking process without renewable energy credit. I think giving 40 cents on the dollar renewable energy credit helps make this project more economically viable than what is already listed as an economically profitable process. So I think the 0.4 is reasonable and I would leave it up to the wisdom of this Committee to decide what they want to do. If they want to see amendments or what you would like to see out of the process.
Chairman Goldwater:
Thank you, Mr. Geddes, that was excellent.
Assemblywoman Giunchigliani:
Where is municipal waste defined? It is not contained in your bill and it is not in [NRS Chapter] 704. Is that spelled out?
Assemblyman Geddes:
It is in a different section of the statute and I cannot [recall its] citation.
Assemblywoman Giunchigliani:
I will look for it. That is where tires are defined or included?
Assemblyman Geddes:
That is where they are included. The only other item to look at is they say that the tires have to be shredded going in, but that is really the only thing beyond that. Tires are within the municipal waste realm.
Assemblywoman Giunchigliani:
That would still be included in your list as a definition of biomass as well as the other, but the issue now comes down to the credit that might be obtained.
Assemblyman Hettrick:
Mr. Geddes, I appreciate the intent of this bill and what you are trying to do. At the same time, I understand that the folks out in northeastern Nevada would love to have something that was an investment that paid property taxes, hired people, and paid wages. If it is as clean as you have indicated, ultimately they are not going to be creating an environmental hazard. If anything, they would be cleaning one up. I am wondering if it is not worth something in terms of the multiplier, in that regard. I am not arguing with you about the 0.4 or whether they are right at 1.0 or whatever the number is they prefer, I am wondering if it does not have some benefit to us to try to maintain the economy of northeastern Nevada. Jobs and all the things that go with that and the viability of maintaining a hospital and on and on, to make this a very viable project, and so that would be my comment. If you would be comfortable in negotiating a number with them that they might live with that would make it a little more profitable. Profit is not a dirty word, especially when it pays bills and maintains hospitals and the like in places where we need them.
If you would be willing to work with them, I would really like to see you folks come back with a number we could do that would benefit Nevada in many ways. The problem is, as you say, while it is more beneficial to give them the tire than to pay to throw it away, I travel throughout rural Nevada constantly. People do not pay anybody to throw the tires away; they dump them everywhere and anywhere, so they do not save a dime by taking them to these folks, they just drop them because it is easier and closer. I would really like to see us try to work this thing out so we could pass this bill in some fashion that would make them viable and make sure that you are satisfied that we are not going too far with this.
Assemblyman Geddes:
I would be fine with that. When we had our first meeting and we got into the discussion, that is where the whole bill got amended from a straight-out ban to a partial credit. In that discussion, we were talking about a partial credit based on the percentage of natural rubber in tires. The issue with the number factor came out in the fact that I could not get numbers out of Legislative Counsel Bureau and a national search to find what a good number was that would go above the 0.4. For the sake of economic development and the wishes of this Committee, I would be happy to adjust that based on your intentions.
Chairman Goldwater:
I think that is what we would like to see happen. Even though we did not want to mess around with anything that was in [A.B.] 661 before this year, particularly as it relates to portfolio standard. I know the original bill was to exclude something, and I think if we could arrive at some number, your intent is admirable, it is timely, and we can accomplish something good here if we can apply our expertise of working with some economic development in the rurals, as well. We will close the hearing on A.B. 296.
We will open the hearing on A.B. 275.
Assembly Bill 275: Eliminates authority of dispensing optician to fit contact lenses. (BDR 54-1218)
Alfredo Alonso, Legislative Advocate, representing Nevada State Board of Optometry:
[Introduced himself] You have before you an amendment (Exhibit E) to A.B. 275, which is agreed-upon language by all parties. I think that this essentially fixes the inconsistency in the statute, defines initial fitting, which was a significant issue to the Board, and still allows, obviously, for opticians to continue doing what they have been doing for the last 25 years. I would like to introduce Dr. Kurt Alleman, Chairman of the Board of Optometry. I think he can discuss it a little further with you.
Kurt G. Alleman, O.D., President of the Board of Optometry:
[Introduced himself] We have looked over the amendments and we approve them, or at least we see them as a great benefit to the members of the state. It defines what an initial fitting of a contact lens is [and stipulate] that it is done by an optometrist or an ophthalmologist, but it still allows opticians to continue to provide the service that they ably provide in this state.
Assemblywoman Giunchigliani:
I have an issue that I have actually spoken to one of the Alonso brothers about, that I had looked into over a year ago because when we first expanded allowing opticians and optometrists to be able to do some of the exams, we never defined what a year is. I am wondering if this bill might be a vehicle, because I think it currently just says one year, and there has been some argument within the last year that I became aware of regarding that, and I am just throwing out that to say a year means 12 months or 12 consecutive months. Is there any objection to that idea? I apologize; I think I spoke to you about a month ago and did not catch that the bill was coming up today.
Kurt G. Alleman:
We understand a year to be 12 consecutive months, a minimum of 12 consecutive months, absolutely.
Assemblywoman Giunchigliani:
All right then, if we note it that way or if there is some language that needs to go in to make it clear, it would be helpful.
Michael Alonso, Legislative Advocate, representing the State Board of Dispensing Opticians:
[Introduced himself] With me today is Dr. David Stuart, the President of the State Board. On A.B. 275 we would support the bill with the proposed amendments. We do not have any concern and would support the amendment that Assemblywoman Giunchigliani proposed for the 12 consecutive months.
Chairman Goldwater:
Thanks for your work on making this bill a little bit easier this year. [Is there] further testimony on A.B. 275?
Jeanette Belz, Legislative Advocate, representing Nevada Ophthalmological Society:
[Introduced herself.] We also have been working with the sponsors of both A.B. 275 and A.B. 452, so I will just throw in my comments here as well, if you do not mind. We are in support of the amendments that have been proposed and as shown to me this morning, I also would support the amendment proposed by Ms. Giunchigliani.
[There were no further questions or testimony.]
Chairman Goldwater:
We will close the hearing on A. B. 275. We will open the hearing on A. B. 452.
Assembly Bill 452: Makes various changes regarding dispensing opticians. (BDR 54-541)
Michael Alonso, Legislative Advocate, representing the State Board of Dispensing Opticians:
A.B. 452 is the Board's bill to amend NRS Chapter 637. I will walk you through a brief summary of what the bill intends to do and Mr. Stuart would be happy to answer any of the technical questions that may come up. Skipping Section 1, which is just preamble language, the intent of Section 2 is to really phase in a one-license system as opposed to the two-license system that is currently in place under 637. There is currently one license for spectacles and one for contact lenses. The Board is proposing to change it to one license over time and grandfather those people in who have the spectacle license and do not want to change over. The change is to ensure the customers in Nevada are provided with uniform knowledge of dispensing to allow for streamlined licensing for the Board and licensees. Section 3 of the bill provides the Board of Opticians with the authority to investigate persons who violate NRS 637 and provides the Board with some more authority in the ability to fine people who violate that provision, up to $10,000.
[Mr. Alonso continued.] Section 4 continues on with the disciplinary provisions. Currently under the law they can only go after an actual person. We are trying to expand it because of some consumer complaints that have come up where a retailer, for example, hires somebody to dispense spectacles or contact lenses, and it is really the retailer that is telling that person what to do and is violating the statute. The Board does not have any authority over the retailer or whatever other entity it might be, “employer” for lack of a better term, because they can only go after a natural person. This would expand the Board's authority to investigate and potentially discipline an employer, for example, that is causing the violations of Chapter 637.
Section 5 is just some cleanup of some redundant language with the amendments. Section 6 allows a person to practice in ophthalmic dispensing as a student enrolled in a course of study to become an optician, as long as they are doing it through an accredited school program and under the direct supervision of a licensed optician, optometrist, or ophthalmologist. Again, that is part of some of these changes that the Board wants to make to increase the standards for opticianry in the state of Nevada.
We have proposed an amendment (Exhibit F) that the ophthalmologists and the optometrists have looked at and agreed to, where we amend Section 6 to make it clear that the school must be accredited by the Commission of Opticianry Accreditation. We removed subsection (c) of Section 6 to make it clear that licensed optometrists or licensed ophthalmologists supervising the student do not have to be approved by the Board of Opticians. They would have to deal with their own chapters, and we would take them out of our bill.
Sections 7, 8, 9, 10, 11, and 12 essentially do away with the apprenticeship program, and we phase it in over a period of time to allow those people who are currently practicing under the apprenticeship program time to get up to speed on the new requirements and be able to take the classes to get the license under the new higher standards. Doing away with the apprenticeship program is again, just part of the overall impact of the bill in trying to get to higher standards within that discipline. I am going to jump over to Section 13. This is the grandfathering provision for three years for people in the apprenticeship program.
[Mr. Alonso continued.] Sections 14 and 15 are some more cleanup dealing with unlicensed persons that are employed by licensed dispensing opticians, allowing them to continue to be unlicensed as long as they are working under the direction and supervision of a licensed optician. Section 16 increases the requirements for continuing education in ophthalmic dispensing and it specifically requires a licensee to take continuing education related to contact lenses, again increasing the standards. Sections 17 and 18 clean up the language related to the renewal consistent with those changes and the higher education requirements. Sections 19 through 23 are really just cleanup and effective dates.
We also have, in the amendment that was passed out, a change to the applicability of 637 after discussions with the optometrists and the ophthalmologists, where we make it clear that through a new Section 24 of the bill that the provisions of the chapter would not apply to an employee of a licensed physician, surgeon or optometrists where the ophthalmic dispensing is under the direct supervision of those persons. We also added something this morning relating to pharmacists and NRS 639. If an ophthalmologist or an optometrist actually does the entire fitting of the contact lens and then writes out a prescription, I think this came up in the 2001 Session, a pharmacist can fill that prescription. We want to make sure, and we discussed this with Wil Keane to make sure it is consistent that we are exempting pharmacists so that they can continue to do what they are doing. We would be happy to answer any questions that you may have.
Assemblywoman Giunchigliani:
In Section 3, could you give me an example of what the activity – how this would occur? Section 3 or Section 4, that speaks to the investigation, but what is the activity that someone would actually do that would cause the investigation? Is it like Lens Crafters and you come out and somebody actually goes beyond and says, "No, I think your eyes are worse than this," even though the script says that? How does that work?
David Stuart, President, State Board of Dispensing Opticians:
[Introduced himself] A situation like that would occur when perhaps a person is working under a retail guise or a commercial entity and a consumer would buy a pair of glasses or contact lenses, or whatever the case may be, and then they are not waited on by a licensed person, by a trained person, or by somebody who is already licensed. They find out that the glasses are not correct; they do not fit; they cannot see. They go back for a refund and there is no refund available; they have a no refund policy. In turn, the complaint comes to my State Board, and we are left just going after a $7-an-hour employee who just did what he was told.
Assemblywoman Giunchigliani:
Exactly. Okay, and then, maybe to Mr. Alonso, subsection 3 – not being an attorney – what exactly does it mean when an administrative fine is the final decision for purposes of judicial review? Is that common throughout?
Michael Alonso:
Sure, in a regulatory environment, that is where you can then jump over if you want to appeal it.
Assemblywoman Giunchigliani:
I see. If you appeal, you do not go back. Okay.
Michael Alonso:
That would be the final review from an administrative standpoint.
Assemblywoman Giunchigliani:
And then page 8, the license of an apprentice dispensing, that is where you phase them out as the apprenticeship program.
Michael Alonso:
That is correct.
Chairman Goldwater:
Mike, let me just ask you something and I hope this can blend into your testimony as well. We are in an environment now where many doctors are threatening to leave the state and we are in a state of what many have defined as crisis with health care. People have blamed a lot of it on malpractice premium insurance, but I think we need to be mindful that there are many other elements that keep Nevada doctors from wanting to stay in Nevada to practice medicine. I received a number of letters from constituents, as well as a postcard from a group that is known as the "Save Our Earth, Keep Our Physicians In Nevada" or "Save Our Physicians," or something like that. Do we want to do anything, and does this bill in any way, make it more difficult for these specific health care practitioners to practice in our state?
Michael Alonso:
I do not think it does. I think what it does, from the practitioner's standpoint, is make it more uniform, at least with the dispensing opticians, and raises the standards, so hopefully . . .
Chairman Goldwater:
But is raising the standard necessary in an environment where doctors seem to be fleeing Nevada?
Michael Alonso:
I do not think that is an issue right now for the dispensing opticians and what we are raising the standards . . .
Chairman Goldwater:
Are they a member of that group "Keep Physicians in Nevada?"
Michael Alonso:
No, and I think with the grandfathering in of the license for those people who want to do spectacles only and do not want to get into the business of dispensing contacts, it will not change that forum. The Board just wants to focus on raising the standards overall, especially for dispensing contacts and for consumer protection purposes.
Dr. Kurt Alleman:
As a State Board, we, with the amendment that has been proposed here, see this as a benefit to the constituency within the state, and that it will not cause any problems. Also, as doctors leaving the state, just as optometrists, I do not see that as adversely affecting them.
Chairman Goldwater:
Thank you very much for that clarification. [There were no further questions or testimony.] We will close the hearing on A.B. 452. We will open the hearing on A. B. 314.
Assembly Bill 314: Revises provisions relating to generation, reduction and conservation of energy. (BDR 58-797)
Rota Rosaschi, Chief, Employment and Support Services, State of Nevada Department of Human Resources, Welfare Division:
[Introduced herself] My unit is responsible for the low-income home energy assistance program.
Chairman Goldwater:
Could I ask you to hold on one moment? This is Assemblyman Geddes' bill. We will wait for him to introduce his bill.
Assemblyman Jason Geddes, Washoe County, District No. 24:
[Introduced himself] A.B. 314 was established basically to do some tweaks and hopefully improve on the great work that was accomplished in A.B. 661 [of the 71st Legislative Session] and S.B. 372 [of the 71st Legislative Session] to develop renewable energy sources in Nevada. A.B. 314 focuses on small development within the state in providing incentives to those individuals who are looking to develop on their own homes and their own properties. After discussions with several people, and the advice of the Chairman, we decided that the Universal Energy Credit was not a place to look for funding during this session, so I have passed out a proposed amendment (Exhibit G) to A.B. 314.
I would like to go over the changes in the bill. Basically, Sections 1 through 11 are gone. The definition in Section 12 has been slightly changed, and the intent of Section 12 is to create a program that would be run and operated by Sierra Pacific and Nevada Power Company. The intent of that is for them to put up a program where they can offer to their customers who want to develop renewable energy systems in their own home, a program whereby they would provide the up-front costs to install it in a home. The resident would negotiate a contract with Sierra Pacific/Nevada Power to pay off that installation into their home for all the equipment. They would pay that off over some term to be determined between the individual and the power company. The power company would benefit in that they would get all the renewable energy credits that were generated through that development. It is designed to go to residential homes, small commercial – which is anybody who employs less than 20 – irrigation pumping – which I am not sure is the exact phrase, but it is intended to get to all those agricultural farms and ranches who want to develop renewables on their property.
We put in specifically subsection (c) which allows for the repayment of the installed costs to be on the customer's bill, and going out every month. Page 2, Section 13, subsection 1(b), was just a mistake in bill drafting. There should be no change there and the changes in the amendment are just to put it back to the way the current law reads. Subsection (c) is putting in the net metering and renewable energy. As for the information that goes out twice a year to the customers, the intent there is that Sierra Pacific/Nevada Power would just let everybody know of the program, the purchasing, the payback, and the different renewable options that are available to them on a twice-a-year basis.
One big change we had was the net metering system. A lot of people have felt that the 10-kilowatt limit is way too small for development. Under the renewable portfolio standard, we get a lot of large development and very little small development. The idea behind this is to get a lot of small customers looking to add this into their system and to breakdown the economic barriers that they have. The 10-kilowatt net metering cap was too low. I met with Nevada Power and asked them what would be good with them; they had recommended 30 so I went to 1,000. I think they will come up and propose 30 again and I would leave it up to the wisdom of this Committee to come up with a number in between. If we look at the numbers that are out there currently statewide, we only have 31 participants in the net metering system. There are 63 applications pending in Nevada Power and there are 2 to 3 inquiries a month at Sierra Pacific Power. If all the applications that they have are in and approved, we still do not have 100 people in this program. I think removing the 10-kilowatt cap would add an incentive to get more people into that program.
[Assemblyman Geddes continued.] In Section 15, I have added waterpower. The idea is similar to Lynn Hettrick's bill, A.B. 429, where you are putting in waterpower for small generation on private property, on usage. Barrick Gold Company has a project, and in going through this definition, I basically pulled from various sections of the NRS and the state of Arkansas, who are the only people who I found had a good definition of waterpower.
When it comes to generation of electricity, when you are not talking about large hydro projects, one thing I considered was putting in the phrase "non-damming" or putting in a time line to make sure that current dams did not fall into the requirements or current hydro. But, in looking at the state energy office for the total amount of hydro, excluding Boulder Dam, we only have 8.7 megawatts total in the state as it is right now. So, I am not sure it is enough to fret about.
Moving on to Section 16, the intent here was – again we were looking to farms and ranches and looking to develop alternative energy. In serving on the Rural Renewable Energy Task Force, one of the things that is before us, as an obstacle, is the fact that you have people who are interested in putting in a project and want to put in a project, but the fact that they have to be on the grid is prohibitive to them. If you look at a lot of these ranches and farms that are out in the "boonies," the part of Nevada I truly love, they are so far off a major transmission line that it is hard for them to get in and connect and be part of the transmission definition. The idea is that they can generate it. It does not necessarily have to be on the grid as long as it is powering a system. By generating it and powering a system, they do not have a grid requirement.
I worked with Mr. Wellinghoff to come with the definition in (c) to allow off-grid generation that is still in the state. Going down into subsections 3 and 4, the changes were pulling out "thermal" to allow both "solar" and "solar-thermal." I think there will be an amendment to have it state "solar" and "solar-thermal" as opposed to pulling it out for consistency and I am fine with that.
[Assemblyman Geddes continued.] In subsection 4, we go into the multiplier, and this will be very similar to what you saw in A.B. 296 with the tire multiplier. It is putting in a 2.4 credit multiplier for solar energy systems. We met and talked with a lot of solar energy developers in the state and some people who worked on the RPS last time. The 2.4, basically, is a credit that levels the cost of photovoltaics and how expensive it is to generate that electricity and get it into the system. That is where we came up with the 2.4. Section 18 was for Mr. Parks, but the rest of you will be interested as well. We currently have a provision that if you purchase small renewable energy products in the state, you have a sales tax exemption for a portion of that sales tax. That is set to expire this year and I seek to extend the expiration to 2013. That is the bill, as amended.
Chairman Goldwater:
That was a thorough bill.
Assemblyman Beers:
Does solar-thermal energy preclude photovoltaics?
Assemblyman Geddes:
I do not believe it does.
Assemblyman Beers:
Do you think that solar-thermal energy includes photovoltaic electricity?
Assemblyman Geddes:
Rose is saying no, so it is a no.
Rose McKinney-James, Legislative Advocate, representing Energy Works Consulting and Power Light Solar:
Photovoltaics are one aspect of solar energy. It is the aspect that you see in the panels. Solar-thermal is the other side of solar energy, where you use a thermal conduit, either water or some other conductive entity.
Assemblywoman Giunchigliani:
I think by removing "thermal" it is actually more inclusive rather than exclusive. I think that is the intent in the bill. When you deal with the water, I am looking at the definition, whether it be standing – then that could include thermal for the purposes of reaching the megawatts, correct? So you could have businesses or homes that utilized thermal panels and standing water in order to heat, which offsets their energies?
Assemblyman Geddes:
That sounds like a possibility.
Assemblywoman Giunchigliani:
We will hear what the others have to say. It is just a thought, but I think if we are going to use that definition, that might be a nice outcome.
Assemblyman Oceguera:
Mr. Geddes, I see in the revised amendment that it looks like you are going to have a commission decide how to implement all of this. I am just wondering, from your perspective, if you could give us any idea what the utilities would have to do with hiring obligations they would have in the future to maintain and repair all these facilities.
Assemblyman Geddes:
I would rather let the power companies speak to that. I cannot speak to that very well from their perspective. I am not sure what costs they would incur to put in the program and to run the program. My idea would be in the contract terms that they would set up. They would not be responsible so much for anything that was installed there, or actually handling any of the installation, if they did not so chose. I could put a P-V [photovoltaic] cell on my roof and a small wind turbine. This would be the total cost. I would ask Sierra Pacific to pay those costs, and Sierra Pacific would get the credits. They would say, “Yes, we will pay it; these are the terms you have to pay us back.” I would then have my certified installer come out and put them in. It could work either way. I think their responsibility would stop at the net meter.
Assemblyman Oceguera:
So that would be the customer's obligation from that point.
Assemblyman Geddes:
That is my intention.
Chairman Goldwater:
Mr. Geddes, did you say this was a product of the Renewable Energy Task Force?
Assemblyman Geddes:
No, sir. Actually, this is a product from walking my district and talking to people who are looking for ways to get incentives for their own homes and their own incentives. Actually, I want to share one short story. I was walking one night right at sundown and there was a blackout in the neighborhood up in the North Valleys above Reno. I knocked on this guy's door, he opened his door and looked out and said, "Oh my God, there is a power outage up here." He had his television on, his computer on, and his lights were on. He had two little wind turbines and a solar panel system with a battery that he had installed for $10,000 in his home. He had no idea that the power was out, and he was able to generate what he needed off that investment. Mr. Chairman, did that answer your questions at all? It did not come from the Task Force, it came from me.
Chairman Goldwater:
[That is] good to know.
Marion Barritt, Sunrise Sustainable Resource:
[Introduced herself] I am a member of Sunrise Sustainable Resource group as well as a member of the American Solar Energy Society and a director of Solar Rating and Certification Corporation [SRCC], which is the solar-thermal national regulatory group. I appreciate your questions about whether the solar would apply to both thermal and P-V. I do happen to be the owner of the very first net-metered [home] in the state of Nevada. I see Assemblyman Hettrick nodding his head, so he does know about my house, and I think you have actually seen it. That was back in 1997, and I have to make a comment that the reasons we have only 31 net metered systems in Nevada right now is because it really has not been well advertised. I tried my best, but it has been a little while bringing on Sierra Pacific to the point where they are now putting on great ads on the television featuring Colin Duncan talking about solar and availability. Net metering is still not really mentioned. It is also hard to come up with the dollars to put the systems up in the first place. I have a very small system, my electricity bills for the whole year run under $100. I do have a very energy-efficient house to start out with. The other reason, of course, is that people are limited to the 10 kilowatts and I think if we open that up, I like Mr. Geddes’ idea of 1,000, but I would settle for 100, I think that is probably a good next step.
Obviously, I support this bill. I really like Section 12 where the utilities will establish a program to help homeowners to both purchase and install renewable energy systems. By renewable energy, that terminology, I would understand that to mean, solar, solar-thermal, wind, et cetera. I guarantee I will be first in line if they put together a solar-thermal program because I do want to put a hot water system on my house. I also like the provision for the off-grid generation. As Jason said, he sponsored this bill because of walking around his district and listening to people. I have done a lot of talking to a lot of rural people. I come from Douglas County, so we do have a lot of rural activity, and there are a lot of people that would be involved if this were passed. Obviously, it is an incentive to them. Thank you very much for listening.
Joseph Johnson, Government Affairs Consultant, Sunrise Sustainable Resources, Toiyabe Chapter of the Sierra Club:
[Re-introduced himself] I passed out some proposed amendments (Exhibit H) to three of the bills that had the applicable sections. I wish to particularly go through these because they are concepts that I think would enhance the ability of the distributive generation customer, the small net meter customer, the small customer generator, to have the incentive to purchase and participate in the process. I congratulate the members of the Committee, the Assembly, the past members who passed the portfolio standard, and the implementing regulations last session. We were very successful in that the contracts have been approved for meeting both the solar and the non-solar portion of the renewable portfolio standard.
We still have not seen the increase in the distributive generation and the small customer generator. I think most of them mirror what you have already received as a suggested amendment in A.B. 314, by Assemblyman Geddes. The net metering system I am proposing is 100 kilowatts rather than the 10. The waterpower section, I have included some language here and I believe you should have a recommendation from the Renewable Energy Task Force dealing with inclusion of waterpower and what their consensus was on that issue. I particularly wish to reference that waterpower is not an eligible renewable energy resource if it would require a new or increased appropriation of diversion of water. This is directly out of the California statute addressing their portfolio standard that was adopted this past fall. This change to NRS 704.7815, "renewable energy system defined," – I am not certain that this particular version, but in part of the proposed amendment to A.B. 49, the language in this Section 2 – we had reached some agreement and justification that the solar-thermal energy, in just striking "thermal," would include both thermal as well as a passive solar. The part that I would suggest striking is "electricity and energy." Presently, unless you have electric hot water heat, you will not be allotted renewable energy credits for installing solar-thermal.
In a January 10 Task Force meeting, Mr. Higgins of Sierra Pacific Power made the suggestion that we should include this residential thermal solar hot water heat as a portion of the renewable requirements. I think this would be a very positive suggestion. If you had the renewable energy credit as well as the reduction in the utility bill, this would make it very market-driven. I think that most of the folks here are in agreement with that.
I would submit for your consideration that 704.7815 would read as "solar energy system that reduces the consumption of energy" would be categorized as a renewable energy system. If you accept this change, then I believe that the suggested language in the 2.4 credit needs to be directed to the photovoltaic rather than simply solar energy, because the solar-thermal for hot water does not need a 2.4 multiplier in it to be in the market, so to speak. If we are really talking about the solar-thermal being restricted to the multiplier of 2.4 on the P-V systems . . . I had originally thought of just limiting this to net-metered customers rather than defining it as photovoltaic because small wind also is not in the market unless you are off-grid and competing with adding transmission lines.
[Joseph Johnson continued.] The last change that I have, and I believe this is included in A.B. 431, where you will be hearing later, is that the commission "shall adopt regulations that establish a system of renewable energy credits." With that, I would conclude my testimony on A. B. 314. I may have some comments on A.B. 429 and A.B. 431 depending upon the proposed amendments.
Chairman Goldwater:
Thank you, Mr. Johnson. Did you work on these issues as we debated A.B. 661 [of the 71st Legislative Session] last session?
Joseph Johnson:
Yes, I did, and actively participated, but the larger issues, the utility scale renewables, pretty well drove most of the discussion. I do not believe that we fully thought out the impacts on the net metering customers and particularly the issue of how solar-thermal relates to the renewable portfolio requirements.
Neena Laxalt, Government Relations Consultant, representing Natural Lighting Company, Glendale, Arizona:
[Introduced herself] In the interests of saving time, I am going to submit my proposals (Exhibit I) that I have for four of your bills today. I have asked for my language to be submitted on four of these bills and it has to do with the solar-thermal language. On Mr. Geddes' proposed amendment to A.B. 296 and to this bill, A.B. 314, it was at my request that the word "thermal" be removed from the solar-thermal language. As you would assume, that would be all-inclusive; however, since that time I have discovered through the regulation process they specify solar-thermal, so that is why we had to go back to the solar and solar-thermal so that it was all-inclusive, although we did not have to get it confused with the regulatory process. In saying that, I want to add that I have asked for these sections to also be included in A.B. 429, which is Mr. Hettrick's bill, and in A.B. 431, Ms. Giunchigliani's bill, basically with the same language that allows for all solar energy systems to be provided credit for the portfolios.
Rose McKinney-James:
We are most supportive of the amendments that Ms. Laxalt is offering and, for the record, I wanted to indicate support for certain aspects of the bill that you are presently hearing. As Mr. Geddes indicated, there is a provision in this bill that is helpful to photovoltaic and it has clarified a solar multiplier. We are certainly supportive of that provision. There is also the provision to extend the sunset for the tax exemption for solar systems, and we would support that as well. We believe there is an economic development opportunity there. Finally, I would like to thank Mr. Geddes for his leadership and willingness to allow for a debate on these renewable issues. We are also supportive as Mr. Johnson has indicated, and I will shift hats slightly in my capacity as the chair of the Governor's Renewable Energy and Conservation Task Force, of expanding the definition of renewable to include water, and we will be providing the Committee with that written explanation as soon as possible. I am sorry that we do not have it before you as we speak. It is a little tough as we pull together as a Task Force and the subgroup and then we have to approve the language.
Assemblywoman Buckley:
This is not an area where I have spent a good deal of time getting familiar with the ins and outs yet, so I am trying to get a grip on it quickly. Do we include "existing"? Do we not include "existing"? Is it a new or increased appropriation or a diversion of water? I would rather have a consensus from a group such as the Task Force saying, “Here is what we considered, here are the pros and cons.” It does not seem like we are there yet on some of these issues. Could you comment on that?
Rose McKinney-James:
Yes. The Task Force has considered the language and you are asking, specifically, with respect to water. There are two parameters: it must be a new resource, and it cannot be supported by fossil fuel. Those were the two parameters. The language from the Task Force will set that out quite specifically, but that was the nature of the discussion. That is the consensus.
[Assemblyman Geddes noted he agreed.]
Neena Laxalt:
Could I just clarify that I am not coming back up for the other bills? I will turn in my amendments (Exhibit I and Exhibit J) and leave it at that.
Chairman Goldwater:
Just a point of clarification, you do not intend to use the Universal Energy Charge for this? You intend to borrow from the housing portion?
Assemblyman Geddes:
That was all the language that I deleted. Everything was borrowed from the housing portion and pulled out. It is still in my testimony; I was going to speak to it. I truly believe in the program. When I was doing the research for this, I researched several other states. Idaho and Iowa most notably had the low-interest loan program. I truly think the low-interest loan program is something that will help spark this and move it forward. I understand the sensitivity of the UEC and it being in its infancy. We do not want to start diverting any money away from that until the program has a chance to move. So, I still had it in my testimony as being something that I truly support and I was hoping to be able to find another source of money before this hearing, but I was unable to.
[The Chairman invited opponents to come forward to testify on A.B. 314.]
Judy Stokey, Director Public Policy, Nevada Power/Sierra Pacific:
[Introduced herself] Yes, we did have extensive discussions with Assemblyman Geddes about this bill, and he told us that he could not find any place to find the money, so I think we are it. Basically, I wanted to let you know that we currently have approximately 35 net metering customers in both Sierra Pacific and Nevada Power combined. We are advertising and will probably have more coming on this line. As Assemblyman Geddes has said, quite a few people have asked us about the program.
Basically, the way the bill reads right now, after the amendment, it requires that the utilities become large-scale purchasers and suppliers of the renewable energy equipment, stocking the equipment, installing and repairing it. There are a lot of costs involved in doing that. The utilities become a bank and distributor for these products. We agree with net metering and we agree with renewable energy, but we just do not know if we are the people who should be doing those services. When the customer defaults, how do we collect that money? Do the other customers end up subsidizing, and do they end up having to pay for those customers?
There are a lot of questions that need to be answered, and, as Assemblywoman Buckley said, we only have a couple of days to work all these out. There are other companies that do this and we think it should stay there. We do not have a problem with the solar and/or solar-thermal. We do not have a problem with the multiplier. There are a lot of things that we could agree with, but that was one of our main problems.
Another main problem was changing the 10 kilowatts up to 1,000 kilowatts, or 1 megawatt, whichever one you want to say. We do not believe that is net metering anymore. There are a lot of costs associated with that. A net metering customer does not pay for their meter, does not pay distribution transmission charges, and does not pay Universal Energy charges. There are a lot of things that were worked out to help kick-start this program. So things like that would have to be taken into account because the other customers would be paying that for them. I did bring my legal expert, Kathleen Drakulich, along to answer any of the technical questions that I could not answer and I will let her speak.
Kathleen Drakulich, Associate General Counsel, Sierra Pacific/Nevada Power:
Just to add to the comments of Judy Stokey, I thought the question earlier from Assemblyman Oceguera was very interesting. In other words, what do the utilities have to add in order to accommodate a program and implement it? It is not merely the purchase of the equipment; it is the installation of the equipment. Anything with moving parts has a life. So it is the continued maintenance and repair, and that sounds like an entirely new division or line of business for the utility companies. As Ms. Stokey pointed out, what happens if I install that, agree to pay for it, and move before the balance is paid? Everyone knows that the utility has a number of unpaid bills from their customers, for a variety of reasons. If this is the kind of thing that is going to be attached to the bill, does the new customer, the new property owner, have an obligation to pay for that? Can they say, "I do not want the unit?" Then who would pay for it?
The other thing you need to understand is that there is a huge cost involved in the distribution, transmission, and standby service for customers when they are net metering. Not at the 10-kilowatt or 30 kilowatt that we have heard talked about here today, but at 1,000 kilowatts. We have almost half a million customers statewide who would be eligible for and potentially interested in this program. We would be standing by for them, which means that when their unit goes down, we have an instantaneous obligation to try and find them power, and in the middle of the summer that could be a very expensive obligation. If these customers are considered net-metered customers, the obligation falls to the utility company and the cost would fall to the remaining customers.
I have seen programs, one that I read in A.B. 429, that look more like a program that Nevada should be considering. We are trying to bring renewable energy developers to the state of Nevada. When you leave the obligation for the bulk of the purchasing installation to the utility company, it dissuades developers from coming to Nevada, bringing their technology and selling it to our customers.
Chairman Goldwater:
I think you bring up some important points. [There were no further questions or testimony. The Chairman asked Mr. Geddes to summarize A.B. 314.]
Assemblyman Geddes:
I would leave it up to the wisdom of this Committee on where they want to go. If Section 12 is a program they are not interested in, it is something we could look at and maybe pull out of this bill. I threw in 1,000 and I really do not anticipate anybody agreeing to 1,000. I think the concept of it being a large cost does not bear out. With full respect to Nevada Power and Sierra Pacific, each time net metering is looked at, there is going to be this large glut of people trying to get into the program and jump into this program. We are at 31. It is not happening. In a state of over 2 million, we only have 31 people. It is not a big program. If we come back at 100 or 50, you still are not going to see a lot of people in this program. If every application was in, you are talking about 100 to 200 people. It is not a big program and it should not be that big of an obstacle. I was unaware that the net-metering people did not pay the UEC. I think they should.
Assemblywoman Giunchigliani:
Has anyone figured what the actual cost of the equipment would be to install?
Marion Barritt:
I know that on my [electricity] bill I pay a fixed fee, every month, and I am net metered, but I am still paying a fixed fee. I did not realize that would come up. I have no objection to doing that, nor do I think other net-metered customers would. They did put a meter on my building. Anybody that uses electricity, the power [company] does come out and put a meter on your building anyway. They say they do not make any money from me, but they do. I do use some of their electricity, but in addition to that, I am also providing electricity to the power company at a peak time, when they really need it during the daytime. As a residential customer, they are using my electricity for commercial entities that are really online and pulling it at that time. I would say that would prevent them from having to build other power plants. So there is some savings there.
Assemblywoman Giunchigliani:
My question was the cost for installing.
Marion Barritt:
My entire system, a relatively small system, under one kilowatt-hour, was about $4,000. That was the cost of the solar tiles, which were actually the most expensive way to go. I could have gone a cheaper way by using the solar panels, but I chose the tiles because I live in a housing district that does have CC&Rs and I did not want to ruffle anybody's feathers, although in the state of Nevada the homeowners associations cannot deny you if you want to put solar on your home.
Assemblywoman Giunchigliani:
Not any longer. They have in the past. So about $4,000, that is for the net meter plus the installation of everything else?
Marion Barritt:
Yes, and as I said, mine is a small system. If you were looking at a 1,500- to 2,000-square-foot house, you would probably be looking closer to $10,000. Unless you do a very energy efficient house, which I did.
Assemblywoman Giunchigliani:
That is helpful. I know the water district in southern Nevada did some incentives for replacing low-flush toilets and things like that. Those are cheaper, but I was just curious what the costs were, but the problem is until you get the volume, you will never drive the costs down and it seems like we are in this vicious cycle of encouraging people to use solar [when it is not affordable]. It may cost more initially, but in the long run I think you will save some dollars.
Marion Barritt:
As Rose McKinney-James said, I also appreciate Jason Geddes using his leadership role here in your Assembly to present a bill like this and have it discussed, even if you do have to make some changes to it. When we did the first net metering bill, we were limited to no more than 100 homes. Of course, those of us who wanted this to happen realized the 100 home cap was not going to be a problem initially. As we found out, it certainly was not. So you are not going to have a big rush of people to do this. It will promote the utilization of renewable energy. It will give us more advertising and more publicity about it.
Assemblyman Beers:
As I recall, you were net metered during the last legislative session.
Marion Barritt:
Yes, I was. It was the previous session that we actually passed it.
Assemblyman Beers:
So, four years ago? And you set your system in three years ago?
Marion Barritt:
It was done in 1999.
Assemblyman Beers:
And the number you gave us of $4,000 was from then?
Marion Barritt:
That is correct; it was 1999. Some of the costs have actually reduced on the materials that you are using, the solar panels. There have been some breakthroughs, so it has come down a little bit.
Assemblyman Beers:
That was going to be one of my questions. You have already made your investment so you do not know where it is at now? It is presumably less than the $4,000 you spent three years ago?
Marion Barritt:
A little less, maybe, not a lot. Part of the problem is that the more we use, the cheaper the prices are going to be. If you go to countries like China, where they are using a lot of it, their costs are a lot lower than ours. You sit here in Nevada where the sun shines just about every day and I know I am a generalist when I talk about this, but to me, renewable energy could provide us with so many economic benefits. Instead of spending money for fuel outside the state, and about 80 percent of our fuel comes from outside the state, we can keep those dollars here in our state. We could provide jobs for our people and build factories here.
Assemblyman Beers:
Do you have batteries or do you directly hook up to the grid?
Marion Barritt:
No, I do not have batteries. I am strictly net metered. I have to admit there have been a couple of blackouts when I wished I had batteries. A lot of my friends do who are on the net-metered program. You can tell I am enthusiastic about this.
Chairman Goldwater:
Yes, and we appreciate your enthusiasm, but we ask you to be mindful. We have a couple more bills and we are starting to get repetitive.
Assemblyman Brown:
I think I deduced my answer. I was wondering if you had a backup generator; it sounds like you do not. Are these photovoltaic tiles?
Marion Barritt:
These are solar tiles on the roof that integrate into the roof. It can actually be used as part of the roof. You do not have to have any other materials on the roof.
Assemblyman Brown:
Is it a photovoltaic system then?
Marion Barritt:
Yes, P-V.
Assemblyman Brown:
Mr. Chairman, I would just like to have some provider or installer of that come along and testify.
Chairman Goldwater:
Ask and you shall receive, Mr. Brown.
Assemblyman Brown:
I was just looking out on the patio in front and there is a 12-panel photovoltaic package out there. I asked them what the cost was and I think they said, for the 12 panels plus a backup generator, and maybe some other doodads, $25,000 was the number. That was a little steep, so if somebody could help me out with that.
Jordan Robbins, Las Vegas Solar Electric:
We are the leading electrical contractor of net-metered installs in the state currently. Approximately $7,000 per kilowatt is the price of a net-metered system. We sell systems that can take people from 25 percent of their average power bill to 100 percent. The backup system with a generator for approximately $25,000 is correct.
Assemblyman Geddes:
I would be remiss if I did not thank my attaché, Michelle Kennedy, for all the work she did in helping me research this [bill] and A.B. 296.
James Wadhams, Legislative Advocate, Nevada Rural Electric Association:
We are serving those parts of the state that are very sparsely populated and issues of net metering originated in the rural areas with windmills and the like. We would suggest that, while this bill certainly is otherwise unobjectionable, it should not apply to the co-ops and the REAs [Rural Electric Associations]. I would be happy to answer any questions.
[There were no further questions or testimony.]
Chairman Goldwater:
We will close the hearing on A.B. 314. Mr. Hettrick, how about A.B. 429? We will open the hearing on this bill.
Assembly Bill 429: Makes various changes relating to net metering and renewable energy. (BDR 58-779)
Assemblyman Lynn Hettrick, Assembly District No. 39, (Douglas, [Partial] Carson City, and Washoe Counties):
[Introduced himself.] A.B. 429 actually came from a couple of different sources. The first source was some of the small rancher/farmers in the Carson Valley who were interested in being able to participate in renewable energy sources, which means they would have to use waterpower. This bill initially started out as use in regard to waterpower. After I got into some discussion about the bill, I met with Don Soderberg of the PUC [Public Utilities Commission] and told him that I was working on submitting a bill. He and I discussed trying to do something to further net metering and move it forward. Indeed, there was a funding source within PUC, and he agreed to allow me to tap that funding source and use that for a program that you see outlined in A.B. 429.
If you look at Section 2 of the bill, page 1, "net metering system" is simply a definition that was moved forward in statutes because apparently when they redrafted this, it needed to be ahead of where it was used previously and it is struck further back in the bill. Section 3 of the bill is setting up a form allowing the Director of the Office of Energy, within the Office of the Governor, to develop a program of grants, incentive rebates, or the like, to pay persons or to defray, in whole or in part, the cost to persons who acquire, install, or improve net-metering systems. We have heard they can be relatively expensive.
If we are going to get these things to move forward and actually start seeing enough of them come into existence, to perhaps get them to be cheaper and also give us enough experience with these things to find out what we can really stand, what works for the utilities, and what works for the individual investors, we need to facilitate getting these things up and moving. The rest of that section, through line 30, is various parts of what the money can be expended for and the type of things that are appropriate within the bill.
Section 5 of the bill says that the Energy Task Force can advise. We have added a section that they can advise how the money should be distributed and spent to acquire, install, or improve net metering systems. Page 3, lines 22 through 26, clarifies the language. We have substituted "persons" for "small commercial and agricultural" customers. It applies to everyone. Those kinds of things are just cleanup language for the most part. Again, cleanup language on page 4, Section 5, and drop into Section 6. I went to the 30-kilowatt hours because I think it is a reasonable load to get this thing started and to assure that we can get enough people involved. At the same time, it raises it enough to be practical to install some of the equipment so that you can get a great enough load that you actually generate enough electricity to make it worth it. I believe that is a reasonable level. However, the Committee has heard a lot of testimony and you may fall somewhere else. I think we need a minimum, probably of 30 kilowatts. I do not know how much farther you have to go.
Section 7, we just want to leave the language the way it is in the original law. We had some concerns about switching it to a mandatory monthly and we would just as soon leave it as it was in the existing law. So, that would come out. Section 8, just adds "water power." Some of the bills you have heard today defined water power. If you, as this Committee, feel it is important to define what water power is appropriate, that is fine with me. If you feel that the terminology "water power" is adequate, that is also fine with me. The Committee needs to decide what is necessary to have included. If we have concerns about what that may or may not include, and I would say that also would pertain to the date, whether or not you want to put a date of "not before" whatever, I would leave that to the Committee's discretion.
Finally, Section 10 just specifies where the money comes from. It does not take a legislative appropriation from the General Fund, and therefore this bill should not have to go to Ways and Means, where it would need net metering to see the light of day.
Assemblywoman Buckley:
We have had the same concerns before about waterpower. It includes Hoover Dam. Would this not gut everything we are trying to do? What about [the issue of] having it only apply to new resources developed in light of the goal of trying to create more? Could you address those?
Assemblyman Hettrick:
Yes. I have no problem with limiting it to new sources. We knew there were multiple bills when we had this drafted, all of them addressing various water power and various limitations. The intent is not to include Hoover Dam. The intent is to include new sources. If you put new sources alone, it would cover 99.9 percent of all of the concern about dams and the like.
Assemblywoman Buckley:
Except new dams.
Assemblyman Hettrick:
I do not care if you limit new dams. That is not the intent. We are trying to use the water that already flows through a lot of these ranches where they maintain ditches and the like. We are trying to provide renewable energy. No, I do not have a problem with any of these restrictions.
Assemblywoman Giunchigliani:
Do you happen to know how much is in the Regulatory Fund?
Assemblyman Hettrick:
I do not know the total.
Assemblywoman Giunchigliani:
Do you have a ballpark figure?
Assemblyman Hettrick:
I think somebody is here from PUC who might be able to testify to that, but no, I do not.
[The Chairman invited others to testify on A.B. 429.].
Carl Linvill, Economic and Energy Advisor, Office of the Governor:
[Introduced himself] We support A.B. 429. I want to support it for a very specific reason. Over the last 18 months, we in the Energy Office have convened a variety of work groups to look at and try to reach out to the community and identify particular issues with regard to rolling out solar, wind, geothermal, biomass technologies as well as energy efficient technologies. One of the work groups we convened is a rural renewable energy outreach workgroup.
This workgroup has been visited by 12 to 15, maybe 20 farmers and ranchers from rural Nevada who were interested in stabilizing their energy costs and were interested in exploring wind energy or hydro energy, as Assemblyman Hettrick has described, on their lands, and these funds would allow a program to be created that would serve them, that would allow us to, at least, get some of these programs in the ground, and to help them to insulate themselves from the volatility of energy prices, and ultimately, perhaps, to provide them with a more stable income.
So we think this is a good bill. We like the fact that it is not related to the utilities because that would limit who in Nevada could be served by it. We could serve people who are in rural electric areas with this bill. As far as the 30 kilowatt number, I do not know if 30 is the right number, but I would be happy to have our energy office do some analysis of what we believe the costs and benefits are of going from 30 up to a higher number of kilowatt hours and what kind of potential impacts there could be. We also were interested in a more specific definition of "water power," but each of the definitions that I have heard, described today, I think are fine.
Susan L. Fisher, Legislative Advocate, Barrick Goldstrike Mines:
[Introduced herself] We are here primarily to focus on the inclusion of waterpower or hydropower as a renewable [source of energy], under [NRS] 704.7811. All of the bills you have heard today and then one that you heard before, A.B. 49, which Mr. Geddes had introduced with a number of other sponsors – all included water power, hydro power, whichever way you want to refer to it. We are all right with either definition. A.B. 314, which you discussed earlier, does include a line that says "water power created without the use of a dam." Barrick would be okay with that.
We did provide a proposed amendment (Exhibit K), which comes from A.B. 49. I guess when it gets into bill draft, they will have to throw all these different bills into the pot and get them all lined up just right. The purpose for Barrick was that we have to dewater the mines. We pump the water out and, of course, we are using fossil fuels to pump the water out. Once we have the water pumped out, we can make use of that because we re-inject it into the ground basin. In the course of re-injecting it, we put it through a 72-inch pipe and run it down. We can produce a fair amount of power from that. We have a mine in another state that is being decommissioned and a hydro facility that is being decommissioned. We are looking at relocating that here, to make use of it here and produce some power, probably in the neighborhood of 7 to 10 megawatts.
Chairman Goldwater:
I think this is a theme: the definition of this area, what we want to do, what megawatt standard we want to raise net metering threshold to. I think we have a lot of questions surrounding these issues.
Joseph Johnson:
[Re-introduced himself] I would like to record our support for this bill. We think it is a very good bill. My previously submitted definition of water power, I am certainly agreeable to the one that the Task Force arrived at and will be forwarding to you. I have some concerns about Section 9. It was suggested that this be deleted. I think there is adequate reason that the PUC will grant an exemption on the portfolio requirements in 2003 and this particular proposal would make that complicated, in the sense that it would not let the normal process be rationalized in the future.
David Noble, Assistant General Counsel, State of Nevada, Public Utilities Commission:
[Introduced himself] We currently have sufficient funds in our reserve account to cover the cost of Section 10. We have $5 million in our reserve account at this point, so [for] the $250,000, we will not be raising the mill assessment to cover those costs.
Judy Stokey:
I wanted to represent on the record that we do support this bill and we do agree with the definition of waterpower or hydropower as Barrick had presented to you. We are okay with the 30-kilowatt limit.
Ernest Adler:
The IBEW [International Brotherhood of Electrical Workers] 1245 supports this bill. Looking at the definition of waterpower, I think one easy way to modify it is to say, "water power of 30 kilowatts or less." Then it would not matter if it was out of a dam. It would be a very small dam or something like that, but limiting by the number of kilowatts generated by waterpower would be the easy way to take care of it without having broad exclusions. You may have a farmer with a very small dam, for instance, who is generating electricity, and I do not think you want to prevent that farmer from being able to resell his electricity.
Chairman Goldwater:
I would have to say that we have heard so many different possible definitions of water power, to be used in this purpose, I am not entirely sure which one is correct or that a consensus could be developed on any particular one.
Ernie Adler:
But, I think the chief concern is the number of kilowatts, not whether it drops out of a tank or a dam or how it gets there.
Chairman Goldwater:
Okay. Mr. Johnson, do you want to clarify that?
Joseph Johnson:
I think the Task Force deliberated on this subject fairly extensively, and I believe Ms. McKinney-James outlined the consensus that was there. I think who recommendation would satisfy almost everyone.
Chairman Goldwater:
Which recommendation was that?
Joseph Johnson:
She said that it was not new and I forget exactly what she said, but she will be transmitting that to you in a letter and I certainly have not seen anyone that would object to the definition that was there.
Chairman Goldwater:
We will look at that. [There was no further testimony.] I will close the hearing on A.B. 429. I will open the hearing on A.B. 431.
Assembly Bill 431: Establishes program to provide incentives for installation of certain solar energy systems. (BDR 53-723)
Assemblywoman Chris Giunchigliani, Assembly District No. 9, Clark County:
[Introduced herself] I do appreciate today being the day for renewable energy resources. This bill deals with solar installation and the licensing of it, as well as a demonstration pilot. I believe it is key and critical that now, as we are moving into the area of renewable energy, we take a look at making sure the people are installing these properly, as well as making sure that we have some incentives to expand project areas into areas other than just commercial, but looking at schools as well as homes.
A.B. 431 originally stated the DIR [Division of Industrial Relations] was the body that created the licensing. As we found, there is already a C2 Plus contractors’ license that is issued through the Contractors Board. Some of the amendments will suggest that we just go with what the practice is, and we do not have to create another bureaucracy. The second area is wherever we had a creation of a commission, we are recommending going with the Task Force that is currently in place and continue with them and their job. I would like to turn it over to Danny Thompson and then to George Sterzinger, the resident expert on this matter.
Danny Thompson, Executive Secretary/Treasurer, Nevada State AFL-CIO:
We are very interested in this for a lot of reasons, with the advent of Yucca Mountain being where it is politically. We think that the state should do everything in its power to lead the nation in renewable energy and certainly solar energy. The weather that we have in Nevada, more particularly in southern Nevada, creates an opportunity that you cannot duplicate just anywhere. For us not to do things to make this type of energy more affordable does not make sense. We are proposing extensive amendments, and I will turn it over to George Sterzinger to go through those proposed changes.
George Sterzinger, Executive Director, Renewable Energy Policy Project:
[Introduced himself] I have been working with Danny Thompson for quite a while on the renewable portfolio standard as it has been implemented in the state. I want to give you the big picture and then walk through the amendments that are going to be proposed to the bill. A.B. 431 tries to do exactly what Assemblywoman Giunchigliani and Mr. Thompson indicated. It tries to establish incentives through the renewable portfolio standard for the development of projects that might not otherwise be developed because those projects have outstanding potential in terms of bringing public awareness to the state of the benefits of the portfolio standard and photovoltaic electricity in general. It has the potential to open the market for major numbers of installations on homes that can create a sizeable number of new jobs in those industries. I think in the public building sector it also tries to put these systems in places where a lot of people will see them. It does this in a very specific way; the view of the bill is that the attractiveness of the systems will depend upon what people pay for the systems per month.
In order to bring the monthly cost of the system down to something approximating what people think they are going to pay for electricity over the next 20 years, it offers them two types of incentives. One is a double credit under the Renewable Portfolio Standard for the solar electricity that it generated. The other is to allow them to have net metering on peak load of time of day pricing. We believe that will produce enough benefits to potential purchasers of the system to make them attractive to those buyers because they will look reasonably close to what people will be paying for electricity for the next 20 years. It is not going to make it attractive to everyone, but there is a continuum of market access, if you like, and this lowers the price to open up potentially substantial numbers of new purchasers. It is a pilot program; it is limited to 5 megawatts, which are divided among the schools, public buildings, residences, and small businesses. The amendments that are before you (Exhibit L) are not as daunting as they look.
To make it as simple as possible, I will try to break them down into minor categories and major categories. As was stated, we deleted Sections 2 through 16, which dealt with training, certification, and substituted language for that in another Section, which basically substituted that the installers had to comply with the requirements of the C2 Plus license, issued by the Contractors Board. A lot of the specifics that you see are simply renumberings of the Sections of the bill. Beyond that, there are four additional major amendments. If you go to Section 21, you will see the Committee is redefined to be the Governor's Renewable Energy Task Force and the Task Force be expanded to include a representative of the Nevada AFL-CIO. The next major change is at the top of the second page, which is a new Section 13, subsection 3(a). That is the change to the qualification of the certified and trained installers to the C2 Plus. The next one, subsections 4 and 5 of Section 30 are deleted. We felt that had a double definition of participation in it, which was not necessary, and potentially caused a conflict. We just eliminated that and went with another definition of participation, which remained in the bill.
[George Sterzinger continued.] If you go down to the second from the last section on the second page, subsection 2, Section 34, there are a number of sections there and the bill drafting simply confused kilowatt-hours with kilowatts. Kilowatt-hours is the energy generated. Kilowatts is the install capacity. In every instance we changed from kilowatt-hours to kilowatts. That is the intent of the bill. It is to have 5 megawatts, 5,000 kilowatts divided up among the three groups every three years.
The final changes are on the bottom of page 2, which basically do two things. Again, it clears up confusion between capacity and production. In the original draft it said "for a participant in the categories of school or a participant in the category of other building, the participant in entitled to renewable energy credit equal to twice the," and it had the kilowatt hour capacity. That should read "twice the actual or estimated kilowatt hour production of the solar [energy] system," so it goes to the actual energy produced. For the next Section, for the residences and small businesses, the same correction is made, except they are also entitled to double credits under this bill. There are no other major changes. The last one on the third page simply deletes an unnecessary reference back to a section that is not in the bill any longer. Those are all of the changes. Most of them are renumbering, but there are those specific content changes in the bill that we believe clarifies it and makes it a doable demonstration pilot project.
Chris Brooks, Las Vegas Solar Electric:
[Introduced herself.] I am a photovoltaic C2 electrical contractor in Las Vegas. Of those 31 net meters that we were talking about earlier, in the whole state of Nevada our company is responsible for half of them and are working on several more. I fully like the proposed amendments to A.B. 431 because the main part that concerned me, I think is the most important portion of this bill, would be the C2 requirement. A C2 license is an electrical contractor's license that is available now through the Nevada State Contractors Board. It covers every aspect of photovoltaics, solar energy; any electricity-producing product is covered under the C2.
Article 690 in the National Electrical Code covers photovoltaics. It is very clearly an electrical industry and I think this would take care of all the different licensing and certifications necessary. I also feel that with this pilot program, doubling the credit for kilowatt hours produced would be the necessary incentive for a lot of customers that I have had in the past that need a little more added incentive to invest in solar. I think this would do the trick. I think this puts it down to a more realistic level where they can compare kilowatt-hours and I think they would be urged to invest at that point. We already have several people who are building projects based on net metering or a single kilowatt-hour rate. I think this would make it more available to many more customers and put a lot more renewable kilowatt-hours back into the grid.
Danny Thompson:
If I could add just one other thing. Last year Senator Townsend and I went to San Jose, California, to look at a project on the IBEW union hall where they have a demonstration project that is quite extraordinary. We toured some homes of members – they have a program where, in an effort to bring the cost down of these systems, they will provide the parts for free and the member puts it on their home, with the thinking that the more there are out there, the cheaper it will be. The reasons you really need qualified people installing these systems is that, in other localities, photovoltaics have been given a black eye where people who did not know what they were doing installed these things wrong. PG&E [Pacific Gas & Electric] had an instance in southern California where they shut a line off. They sent some people out to work on the line, not knowing it was a P-V system that someone had installed, and it blew the two men off the line. This gave PG&E a "black eye" and it was unfortunate. I know that Chris has spent a lot of time repairing the reputation of photovoltaics, and so it is critical that some requirement like license requirement be put into this whole issue to insure that the systems work and that people are not hurt by their installation.
Judy Stokey:
[Reintroduced herself] I wanted to say that I would like to work with the sponsor on this. We agree with the renewables and the net metering programs, but there are some sections, Section 36 and some of the amounts that we would consider a distributed generation, and we would like all the distributed generation customers to be under the tariffs of distributed generation through the PUC. I just wanted to say that we are in support of this bill as long as we can work with some of those numbers with the sponsor.
Bob Cooper, Senior Regulatory Analyst, Bureau of Consumer Protection:
You have already heard Assemblyman Geddes mention that the portfolio standard RFP process that the Commission approved earlier this year was dominated by large projects and the smaller projects, such as those proposed A.B. 431 were swamped in that process. However, the parties to that docket 0211040 did anticipate that the Legislature might adopt incentives for distributed generations, so they specifically provided language – approved by the PUC – where the next round of RFPs by the utility, to meet additional years of the solar portfolio standard, would incorporate the kinds of distributed generation proposals that the Legislature might adopt such as A.B. 431.
[Bob Cooper continued.] Therefore, the Bureau of Consumer Protection is fully in support of this bill. We think it captures many indirect economic benefits that are not always quantifiable in responding to a request for proposals. It also captures the social benefits, such as putting photovoltaics on schools, where the schools can receive a smaller electric bill and the students can learn about photovoltaics at the same time.
Ernest Adler:
[Reintroduced himself] Our testimony is much the same as the bill's sponsors. We do support this. We think it is important that the installation of these devices be done in a quality manner for all the reasons previously stated.
Chairman Goldwater:
[There was no further testimony.] We will close the hearing on A.B. 431. On the renewable bills, I ask you to work with the sponsors of the bill, as members, to see if we can come to any consensus, sponsor them all. Please let the chair know if there is not consensus. For that, I ask the sponsors of the bill to communicate with me and we will either bring them up for a vote or let the will of the Committee go. We will open the hearing on A.B. 495.
Assembly Bill 495: Makes various changes relating to industrial insurance. (BDR 53-468)
Nancyann Leeder, State of Nevada, Nevada Attorney for Injured Workers:
[Introduced herself.]
Chairman Goldwater:
And I ask you this, you know the bill we passed for Ms. Giunchigliani, her previous bill on worker's compensation?
Nancyann Leeder:
A.B. 168?
Chairman Goldwater:
I think that was it.
Nancyann Leeder:
Yes, a portion. It is Section 3. That is one reason I was asking to delete Section 3. Because it is in A.B. 168.
Chairman Goldwater:
If we can go through this very quickly, knowing we have already addressed a lot of the issues in industrial insurance, we would appreciate it.
Nancyann Leeder:
Okay. First of all, what was just passed out (Exhibit M) are a couple of deletions that I am asking for from our bill. I originally drafted this last summer and did not know what the situation was. I have seen some fiscal notes and it seems fiscally absurd to continue with some ideas, so I am asking that they be deleted. That takes care of Section 1. Also, I have been talking to as many people as I could from the insurer community to try to minimize disagreement and I hope that I have done that in most instances. In other words, there will be little, if any, disagreement. Section 2, the operative language is on page 3 and seeks to eliminate the necessity for a child of a deceased injured worker, who is between 18-22 but a full time student, from having to prove dependency. In other words, making it a part of the conclusive presumption, which is true of a minor child. We have had some cases like that. Section 3, I am asking for deletion. Section 4, I am asking for deletion based on the fiscal note. Section 5, the operative language change is on page 6 of the bill and I am trying to clarify the interaction of the evidence code with 616C. It would continue to allow affidavits, instead of requiring witness testimony, for certain chain of custody and proof problems.
Section 6, the operative language, is on page 7 of the bill. It would require clear notice to an injured worker when there is going to be a closure of the claim. The reason I am asking for that is that I pulled two letters out of our files. In one letter, sent by the insurer to the worker, the first paragraph talks about the permanent partial disability evaluation and what the award will be. The second paragraph says, "If you accept this award or disagree with it, you have the right to a hearing." The third paragraph says, "Please note your claim will be closed for future medical treatment as of the date of your permanent partial disability evaluation." The fourth paragraph says, "A copy of a pamphlet is enclosed." The fifth paragraph says, "If you have any questions regarding the above, please feel free to contact the undersigned." Then there is an enclosure. There is nothing set out in large type, boldface type. [There is] nothing to call the attention of the worker to the fact that he needs to fill out the particular form that's enclosed in order to prevent his claim from closing.
[Nancyann Leeder continued.] In the second letter from the insurer to the worker, the first paragraph states, "You have been scheduled for a permanent partial disability evaluation." The second paragraph says, "If your injury involves (certain body parts) bring gym shorts." The third paragraph says, "One of the necessary factors in computing an award is your age," so it tells the worker what to bring. The next paragraph says to be sure to bring x-rays. The next paragraph says, "As of the date of your scheduled evaluation, whether or not you are present, your claim will close for all benefits except for the right to request reopening and any ongoing voc rehab programs." The next paragraph, also in the same typeface, says, "As of the date of this letter, the insurer will not authorize payment for future medical treatment." The next paragraph says, "It is important that you keep this appointment" that is back up to the reference in the first paragraph – the PPD evaluation appointment. The next paragraph states, "If you or your employer disagrees with the decision, you have the right to file an appeal." The last paragraph states, "If you have any questions, please contact us," and there is an enclosure. So again, there is nothing to indicate for the worker the importance of the claim closure and appeal from that. That is the reason for Section 6.
Section 7, the operative language, is on page 8 of the bill. It allows the hearing officer to excuse untimely filing for an appeal, for the death or diagnosis of a terminal disease of a spouse, parent, or child. Section 8 would allow the same excuse for an appeals officer filing. Section 9, the operative language is on page 10 of the bill. This changes the standard for reopening to "substantial contributing cause" which is already the standard for when there is a pre-existing or post-industrial injury acting with an industrial injury in order to create some condition that needs treatment.
Section 10 has operative language on pages 12 and 13 of the bill. Some of this has already been taken care of in A. B. 206 that this Committee passed last Friday. There are some changes in language between the two wordings.
Section 11, has operative language on pages 13 and 14 of the bill. It and Section 12, with operative language on pages 15, 16, and 17 of the bill, are talking about the problem created with our law when there is a surviving spouse or alleged surviving spouse. Then, surviving children and the surviving spouse is not the parent of the surviving children. Right now, there is an open question as to how the insurer should treat that. We have had four cases. In one of those, it was an alleged surviving spouse, and in the other three it was actual surviving spouses, but the children of the deceased injured worker were not the children of the surviving spouse.
[Nancyann Leeder continued.] Section 13, the operative language is on page 18 of the bill. This is to handle the situation of the vocational rehabilitation program with exceptional circumstances requiring a longer vocational rehab program or an additional one. Right now the law says that at the beginning of the vocational rehabilitation time, you are supposed to request exceptional circumstances and, therefore, a longer program. That proves to be unrealistic; really, you do not know that at that time. You know at the conclusion of the first program that there is some problem.
Section 14, the operative language is on page 20 of the bill. This probably does not happen very often. We have seen it twice. I am sure it does not happen now that we have changed the law and we have private insurers but there are a couple of holdover cases out there that we are trying to correct. In other words, the insurer had originally moved the worker out of the state in order to provide voc rehab benefits. The person worsened, needed another voc rehab benefit and was denied that benefit because he was out of state at that time. Section 15 I am asking you to delete because of the fiscal note.
There are two provisions that I was asking to repeal. The first one is the social security disability offset. When the federal government allowed the state to pass a bill enabling offset of worker's comp benefits when the person is also getting Social Security disability benefits. That law had to be passed within a particular setout six months. Our statute was not passed within that six months. That means Social Security disability can offset payments of worker's comp benefits, but not vice versa. There are still some people who have to deal with this problem and, of course, once we get it in litigation, then we can correct it, but it does require that litigation. The second repealer, I am asking deletion from the bill, merely in order to avoid disagreement.
Barbara Gruenewald, Nevada Trial Lawyers Association:
We would like to go on record as supporting this bill and the way that Nancyann Leeder presented it.
Chairman Goldwater:
That is great testimony. Jack, can you build on that?
Jack Jeffrey, Legislative Advocate, Southern Nevada Builders and Construction Trades:
Me too, Mr. Chairman.
Rose McKinney-James:
[Reintroduced herself] I am representing the Clark County School District. You will note, for the record, that I did sign in in opposition to this measure, but I have now had the opportunity to take a look at the amendments that have been offered and I believe that most of them address the major concerns of the District, particularly Section 3, which would have created a significant fiscal impact to the District. We still have some concerns regarding Section 7 and Section 8, which deal with permissible excuses. They are not major concerns, but I do think it is important to voice those concerns and, hopefully, hear from the other self-insurers who are now sitting to my left. But I do appreciate having the opportunity to receive the amendments because they did help.
Donald Jayne, Legislative Advocate, representing Nevada Self Insured
Association:
[Introduced himself] We have some of our members here today in Carson City as well as in Las Vegas. It appears we have lost several members in Las Vegas as the day wore on, but we still should have Leslie Bell down there, who will provide some technical feedback for the various sections. I will just spend a few minutes quickly going through an overview.
The Self Insured Association is opposed to A.B. 495. We do appreciate the fact that the bill writer, the bill sponsor, has removed some of the sections that were perhaps the largest ones for fiscal impact at this time. We would have opposed those sections, not just for their fiscal impact, but also in our opinion, their appropriateness within the worker's comp arena.
I think the thing that we need to try to keep in mind here in Nevada is that we need to have a healthy worker's compensation system that is in balance for both injured workers and employers to afford reasonable costs and reasonable coverage at the same time. I, myself, came to Nevada in 1991 when the system was in crisis and we had things that were out of balance. We spent a considerable amount of time in the 1993 Session with the crisis in worker's comp that was painful to all, and some corrections have been made as we expanded beyond that in subsequent sessions.
I would be cautious to make sure we do have a system that maintains balance so that we can be an attractive state for companies to relocate to and to get the economic stability that we need here and the type of provisions in this bill. I feel as though we are starting to push the system back the other way, out of balance, a little bit. I was glad to see that many of those sections were removed by the initial amendment, but I think a number of them that are in here still have concerns to the Self Insured Association.
The particular section that I would like to [address] would be Section 9. It appears for that to be a liberalizing of the reopening standards – and we are always concerned about that and are working to support another bill that would tighten reopenings, so I think we are just simply on two sides of that issue. What I would like to do is to at least acknowledge that we have members in the room. They will not be testifying, but they are here. We will have Leslie Bell testify. I think we need to be aware that we have a number of impacts that are coming into the work comp system that we have heard about and some that we have not heard about. The medical fee schedule in Nevada has not been adjusted in almost three years, and it is ready to be adjusted. There is a study that has been presented to the DIR. Bob Ostrovsky and I were part of a task force that looked at it, and I believe that is something we are going to see happen here in Nevada in the near term, the recommendations within Milliman & Robinson on an overall aggregate was to recommend a 15 percent increase to the medical fee schedule.
[Donald Jayne continued.] This is something else we have coming to our work comp system that we have not as yet addressed. I do not know that it is necessarily appropriate to address that legislatively, but we certainly need to be aware of that. We also believe that they will be doing something with the fifth edition of the AMA [American Medical Association] Guides, in one fashion or another. It is in several different bills that are working their way through the Legislature, and we believe it will be adopting at least some form of a modified version of the fifth edition that is out there as well. I mention these things just to keep in mind the balance that we talked about. I think we need to struggle, and we have been struggling with balance in that system. One of the things that existed when I came to Nevada in 1991 was a system that was out of balance and we talked about bankruptcies and bailouts, and I would hate to see us start working in a direction back towards that track again. With that, I would like to see if Leslie is in Las Vegas and have her address a few of the remaining sections of this bill. I hope they got the amendments down there.
Leslie Bell, President, Nevada Self Insured Association:
[Introduced herself] I would like to point out, upon review of the amendments that most of the portions of the bill we disagreed with have been omitted. There are several things that, from an administrative standpoint and from someone who administers claims, are a little confusing. For instance, Section 6, there is a prescribed closure letter. A third party administrator and insurer can write any letter that they want. That is confusing, and I agree that it does not make much sense. But there is a prescribed regulatory closure letter, so maybe we need to look back to what already exists. We would look forward to working with the author of the bill in trying to solve some of those problems.
We do disagree with Section 9. Again, we believe it is liberalizing the reopening process. Primarily, we would just like to work with the author to clean up some of it and perhaps make it a little more understandable and try to figure out what the real issues are and address those issues instead of making redundant statutes over the top of regulations that already exist.
Assemblywoman Giunchigliani:
"Substantial contributing" – I am not quite sure how that term works. I believe something was just changed in the Senate and I thought "primary" was bad enough. Now we are going to "substantial contributing?" Am I misunderstanding how that works?
Leslie Bell:
Out of the reform of 1993 and 1995 we had "primary cause" in most references to both compensability and reopening. In the 1999 Session or the 2001 Session it was changed so the burden shifted back to the employers and we have "substantial contributing" cause. The reopening was one section that was left alone in prior sessions. We find that "substantial contributing" is very hard to legally define. There was a bill last week that passed out of the Senate in which I believe the word they selected was "majority" or "major cause." We are looking for a word or a term that is more legally definable, as a lot of these cases are litigated because of the lack of definition.
Assemblywoman Giunchigliani:
Could I ask Nancyann Leeder to comment briefly, Mr. Chair?
Nancyann Leeder:
What Leslie said is correct. S.B. 320 changed 616C.175 from "substantial contributing" to "major," "major" being probably more than "primary." "Primary" remained in the reopening statute. This section would change the language in the reopening statute to the same language that existed in C175.
Assemblywoman Giunchigliani:
So we make the burden go back to the injured worker and they have to hit the second – it is no longer the employer having to make the argument?
Nancyann Leeder:
Correct. That was S.B. 320.
Bob Ostrovsky, Legislative Advocate, Nevada Resort Association:
I would like to focus on Section 9. Perhaps we could talk a little bit and Ms. Giunchigliani might recall that when we negotiated the language that exists in statute today, we decided that we had a serious problem with the reopening of claims. There were people closing claims, getting lump sum awards and immediately turning around and literally within weeks asking to have the claim reopened. So, we established two methods of reopening claims as part of that statutory change we made. I am trying to remember if it was 1993 or 1995.
Chairman Goldwater:
1993.
Bob Ostrovsky:
1993? Thank you, Chairman. We said if the claim was reopened more than a year after it was closed, you would have to have a primary cause of the change and that was found in 616C.390. If it was made within a year of the change, that is within the first 12 months after it closed, we made it a little tougher. We said not only did it have to be primary, but you needed clear and convincing evidence that it was primary. We decided that was a bigger hill to climb. We had this abuse going on and we wanted to address it. What this bill is proposing to do is change both standards to "substantial contributing." All I can suggest is S.B. 320, which, if the Senate finally processes it, will make its way back to this Committee. We can discuss the proposal to go to "major" cause, because we believe the courts and the judges have had problems with the term "substantial contributing." It is not a term that can be well defined.
Chairman Goldwater:
And "major" can?
Bob Ostrovsky:
We will argue that here. We believe it could be better defined than "substantial contributing." Again, it is a clearer policy decision. The language proposed in this bill makes the hill smaller. "Substantial contributing" is a lower standard than "primary." Addressing Ms. Giunchigliani's concerns, I believe the standard proposed by Nancyann Leeder actually lowers the hill. It makes a smaller hill for employees to climb. This is a loosening of the standard and we would oppose that. Just one other question that I had about the proposal, I am not sure whether Section 12 remained in during the testimony and I do not have a copy [of the work session document.]
Chairman Goldwater:
Our copy indicates that it would remain in.
Bob Ostrovsky:
Section 12 is a benefit increase to children, I believe. The language appears [to me to be that way. If there is going to be a benefit increase, we again ask that some time be given to make that adjustment in premiums paid and, in the case of self insurers, reserves created. We believe those kinds of sections should be effective.
Chairman Goldwater:
Clarification, Ms. Leeder?
Nancyann Leeder:
No, it is not a benefit increase. Right now the insurer has to determine how to apportion between the surviving spouse or alleged surviving spouse and the surviving children. There is already provision in C505 that the 18-22 year old child of the deceased injured worker, who is a full-time student, will be entitled to benefits as if that child were a minor child. The difference is that the child has to prove dependency. In neither instance is it an increase in benefits sufficient to increase premium.
Bob Ostrovsky:
I will accept Nancyann Leeder's statements there as fact. We oppose Section 9 of this bill, as amended.
Don Jayne:
[Reintroduced himself] On the repealed provisions, they did remove the one. But on the one involving Social Security I would like to ask consideration. It has been there for quite some time. We are just now beginning to investigate and to have some attorneys look at that, with the intent of reviewing it one last time ourselves. If it is removed from this section with repealer, that would prohibit us from having a chance to take one more look at that. There have been some questions in the past whether or not we could have gone back to the federal government, gotten some relief on that, and chose not to. It is something we would like to pursue. We are just now beginning to evaluate it with some counsel, as the self-insureds.
Danny Thompson:
I would just like to go on record in support of this bill.
Assemblyman Brown:
I have been scanning Sections 7 and 8, the one where the revision gives the hearing officer some discretion on late requests. It was my understanding that it was the aggrieved person's late request. Am I incorrect? It looks like that is a request for hearing by the insurer.
Nancyann Leeder:
It is supposed to be the aggrieved person.
Assemblyman Brown:
Am I reading that incorrectly, though? Is there reference in subsection 3? I have gone up above to subsection 2(b) line 27, the failure of an insurer to respond within 30 days to a written request. I am just trying to tie which request and what writing is what, if someone could explain that to me.
Nancyann Leeder:
The injured worker can ask for a benefit. The insurer either denies the benefit, causing the worker to ask for a hearing from the hearing officer, or the worker can write a letter to the insurer asking for a benefit, and the worker does not respond, in which case Section 2(b) comes into place. If the insurer does not respond for a reasonable period, which is defined as 30 days, then the injured worker can request a hearing before the hearing officer.
Assemblyman Brown:
On the assumption that that is a denial?
Nancyann Leeder:
Correct. In fact, I think it even says that. It is deemed a denial. In the instance that there is 2(a) operative, a written determination of the insurer, then Section 3 comes into play. If there has been a death or diagnosis of terminal disease of a spouse, parent or child, which then causes the injured worker not to file his request for hearing within the time period, then the hearing officer would be able, upon getting evidence of that situation, to excuse the untimely filing.
Assemblyman Brown:
That is where I am going. That, or any other reason, deemed appropriate by the hearing officer. So that is pretty wide-open discretion. Additionally, are we looking at any time frame, outside time frame? If this comes a year later, are they going to give that some consideration? I have a problem with that much discretion without some kind of time constraint on it.
Nancyann Leeder:
I think in the drafting of this, the bill drafter used the Rule of Statutory Construction that says when there is a list given, anything else added as an excuse would have to fit in the general parameters of this list. In other words, be as severe a situation as this list. Like, perhaps, the injured worker himself was in the hospital.
Wil Keane, Committee Counsel:
[Introduced himself] Just on that one question about how long the period could be by which someone could be excused, we did not change the period. I would agree with Ms. Leeder that whatever the period is right now that people are being excused because they do not receive their forms, these other reasons would also apply, whatever that period. I admit it is not in statute.
Christi Mosher, RN, CCM, Pro Group Management:
We are the plan administrator for four self-insured groups and we are opposed to this bill. I think the changes made are very good, but in particular Sections 8 and 9. I agree that it leaves it open because it does say, "or for any other reason the hearing officer deems appropriate." I think there are a few areas where we need to tighten up the language, but the changes that Ms. Leeder suggested were certainly good. I have to say we are opposed to the bill.
Chairman Goldwater:
Nancyann, any way you can work with the self-insureds to address their concerns? It seems to me they are willing to work to get something.
Nancyann Leeder:
I would love to.
Chairman Goldwater:
Okay, if you would do that and get back to me, I would appreciate it. We will close the hearing on A.B. 495. We did do the Insurance Commissioner's bill; there was not too much opposition and we have prepared a work session document. If the Committee would like, we could get that bill moving.
Assembly Bill 453: Makes various changes to provisions relating to insurance. (BDR 57-546)
Vance Hughey, Committee Policy Analyst:
[Introduced himself] The work session document (Exhibit N) contains three basic amendments. The first one is from the Commissioner of Insurance, which is Exhibit “A.” It is a lot of technical changes. The second one is from James Wadhams, and he presented this at the hearing on this bill. There is one change I would point you to. It is the second to the last page of his amendment, right before Exhibit “C.” I understand the Commissioner worked with Mr. Wadhams on this and the changes are in NRS 178.512, subsection 1(a). There is a word "or" that begins the new wording and the suggestion is to change it to "and." That would, we believe, take care of the concerns that were raised during the hearing. The final change is a restructuring of the amendments proposed by Robert Vogel from ProGroup Management. I do not believe that any of these changes are different from what he presented, except in format.
Chairman Goldwater:
Commissioner, have you had a chance to review Vance's work session document?
Alice Molasky-Arman, Commissioner of Insurance, State of Nevada, Department of Business and Industry:
Yes, I have, and Vance worked with us very closely today in order to prepare these. I have reviewed them and I am in total agreement with them.
Chairman Goldwater:
Will you get accreditation if we pass it?
Alice Molasky-Arman:
Mr. Chairman, we are accredited. We will, hopefully, maintain our accreditation with these new, very long amendments that you see.
Chairman Goldwater:
What is the will of the Committee?
ASSEMBLYMAN HETTRICK MOVED TO AMEND AND DO PASS A.B. 453.
ASSEMBLYWOMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Arberry was absent for the vote.)
Chairman Goldwater:
A.B. 275 as amended seemed to have developed a consensus. What is the will of the Committee?
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS A.B. 275.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Arberry was absent for the vote.)
Chairman Goldwater:
What about A.B. 452? I believe the proposed amendment passed out here seemed to have some consensus.
ASSEMBLYWOMAN GIUNCHIGLIANI MOVED TO AMEND AND DO PASS A.B. 452.
ASSEMBLYMAN HETTRICK SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Arberry was absent for the vote.).
Chairman Goldwater:
I do not think there is anything else we could move today and feel comfortable with. A.B. 493, which, if you recall, is on the green sheet (Exhibit O), provides for money collected by the Commissioner of Financial Institutions and Division of Financial Institutions of Department of Business and Industry, to be deposited to and expended from the Fund for Financial Institutions. I think this bill probably should be adopted and referred to Ways and Means because I know it is something they would certainly want to consider. The Chair would entertain a motion.
Assembly Bill 493: Provides for money collected by Commissioner of Financial Institutions and Division of Financial Institutions of Department of Business and Industry to be deposited to and expended from the Fund for Financial Institutions. (BDR 55-463)
ASSEMBLYMAN HETTRICK MOVED TO PASS AND RE-REFER A.B. 493 TO THE ASSEMBLY COMMITTEE ON WAYS AND MEANS.
ASSEMBLYMAN GIUNCHIGLIANI SECONDED THE MOTION.
THE MOTION CARRIED. (Mr. Arberry was absent for the vote.).
Assemblywoman Giunchigliani:
On that bill, you may wish to notify Mr. [Mark] Stevens that it is coming over so it does go on the exempt list, because it does not say yes as an impact at this point.
Chairman Goldwater:
I will do so. [There was nothing else to come before the Committee. The meeting was adjourned at 5:14 p.m.]
RESPECTFULLY SUBMITTED:
Patricia Blackburn
Committee Secretary
APPROVED BY:
Assemblyman David Goldwater, Chairman
DATE: