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About The Author:

Robert A. Olson is a partner in the law firm of Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law, public utility law and related commercial transactions.

He can be reached at:

Brown, Olson & Gould, PC
2 Delta Drive
Suite 301
Concord, NH 03301
(603) 225-9716









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STATELINE by Robert Olson

August 1997

Nevada Authorizes Retail Choice By Year 2000
by Robert Olson  --   Brown, Olson and Wilson, P.C.
(originally published by PMA OnLine Magazine: 05/98)

Recently, the Nevada state legislature enacted legislation establishing a December 31, 1999 target date for customer access to alternative sellers of generation, aggregation and other competitive electric services. The legislation, Assembly Bill 366, also provides for the restructuring of the Nevada Public Service Commission, resulting in a three member Public Utilities Commission. The Commission is authorized to determine which electric services are potentially competitive and to phase-in different services within different geographic areas at different times.

Prior to the commencement of retail competition, the Commission is to conduct rulemaking proceedings to establish licensing procedures for alternative sellers, unbundle electric rates, identify and approve stranded costs and adopt certain consumer protection measures and disclosure standards. The Commission may require an alternative seller to satisfy conditions related to safety and reliability of service, financial and operational fitness, billing practices and customer service to become licensed to sell competitive electric services.

Non-competitive services, such as transmission and local distribution, must be provided on an open and non-discriminatory basis to alternative sellers under the legislation. The state’s vertically integrated utilities may participate in the new competitive markets only through separate affiliates, if appropriate safeguards are implemented and approved by the Commission.

The legislation contemplates that there will be a provider of last resort to furnish electric service to customers who do not exercise their right of choice. The Commission is authorized to designate existing vertically integrated utilities to provide such "backstop" service. Alternatively, it may directly assign customers to alternative sellers or utilities or it may conduct a competitive bid process for providers of such service. In those markets where effective competition does not develop, the Commission will also have the right to establish methods for determining the prices and terms of service by the relevant service utility.

A multi-year cap on residential rates is imposed, subject to necessary adjustments, so that vertically integrated utilities may recover their just and reasonable expenses. The state’s existing utilities are also directed to minimize layoffs and other adverse effects on their employees.The legislation authorizes full recovery of those utility stranded costs that are approved after Commission review. While the Commission will effectively require utilities to mitigate their stranded costs, there are no specific provisions regarding power purchase contracts with qualifying facilities or other independent power producers, nor is securitization of stranded costs provided for in the bill. The Commission is authorized to determine the method of and period for direct and unavoidable recovery of the ratepayers’ portion of utility stranded costs. The legislation sets portfolio standards for electricity derived from "renewable energy resources", including wind, solar, geothermal and biomass energy sources. The renewable energy portfolio requirement increases from 2/10 of 1% in 2001 up to a target standard of 1% of the total amount of electricity consumed in the state by 2009. One-half of all of the electricity derived from such renewable energy resources must be from solar energy systems. The Commission is authorized to establish a system of tradeable renewable energy credits which may be used by market participants to satisfy the portfolio standards. Electric utilities and alternative sellers must file annual compliance reports with the Commission documenting satisfaction of the renewable energy portfolio standards, and annual information filings regarding other competitive market activities.

With respect to property taxes, the legislation includes a new provision that the state Tax Commission may establish an appropriate valuation and apportionment among counties for property used by more than one party to perform separate functions collectively required to deliver electric service to final customers, if such property would otherwise be centrally assessed if owned by one company. The proportion of such taxes levied upon the property by each county will be based on the valuation of the contribution of each party to the aggregate valuation of the property. This new tax valuation and apportionment section does not apply to qualified facilities constructed prior to July 1, 1997.

Robert A. Olson is a partner in the law firm of Brown, Olson & Gould P.C. which maintains a nationwide practice in energy law, public utility law and related commercial transactions. He can be reached at:

Brown, Olson & Gould, PC
2 Delta Drive, Suite 301
Concord, NH 03301 | (603) 225-9716

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