Nevada Power Makes Second Attempt at PUC Approval of Three Renewable Energy PPAs


[author: Clausen, Tim]

On October 21, 2011, Nevada Power Company ("NPC") re-filed its application requesting approval of the Public Utilities Commission of Nevada ("PUC" or "Commission") for power purchase agreements ("PPAs") for three renewable energy projects.  This re-filing is a result of the PUC's denial of NPC's initial request for approval of these PPAs in July 2011.  The Commission denied NPC's initial request because the utility did not meet its burden in justifying the need for the additional renewable energy.  The PUC stated in its order that based upon the evidence and testimony, Nevada Power did not adequately satisfy the legal requirements to allow the PUC to approve the three renewable energy PPAs.  It was the first time since Nevada adopted its Renewable Portfolio Standard ("RPS") in 2001 that the PUC did not approve a renewable energy PPA.  In late September 2011, the Commission, however, granted NPC's request for rehearing on these PPAs and issued an order requiring NPC to re-file its application for approval, along with additional justification by October 21, 2011.

In the re-filed application Nevada Power is requesting approval of the same three renewable PPAs , which are FRV Spectrum Solar (30 MW solar PV located in Clark County, Nevada), Mountain View Solar (20 MW solar PV project in Clark County, Nevada), and Dixie Meadows Geothermal Project (51 MW geothermal project in Churchill County, Nevada).  The new application is similar to the original application in its explanation for requesting approval of these projects.  However, NPC provides additional justification as to why the PUC should approve the PPAs, including quantifying the environmental benefits associated with each project, providing specific economic benefits for each project, and describing the minimal rate impacts associated with each project.

One of the interesting things to note in the new filing is that both FRV Spectrum and Mountain View amended their respective PPAs to lower their product rates.  FRV Spectrum's product rate is now $111 per MWh, down from the original price of $121.75 per MWh, and Mountain View's product rate is now $116.05 per MWh, down from the original price of $117.50 per MWh.  NPC stated that the solar companies were able to lower their product rates due to a decrease in solar panel costs.  The Dixie Meadows product rate remains the same at $92 per MWh.

In addition, Nevada Power has submitted a revised load forecast in this filing as requested by the Commission.  Nevada Power states that based off a revised load forecast, it estimates it may not need any additional portfolio energy credits ("PCs") to satisfy the RPS until 2020, and collectively with Sierra Pacific Power, until 2025.  It does state that this is based off a moderately conservative load forecast and that under a more aggressive load forecast NPC may need additional PCs to comply with the RPS by 2015.

Overall, Nevada Power has provided the Commission more justification, including the need and associated benefits of each renewable energy project in this filing.  However, we will have to wait until after the Commission holds its hearing on the re-filed application on January 9, 2012 and issues an order for the conclusion.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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