New program from utility Nevada Power to develop 'green' rates

Nevada Power Co. will be developing a proposal for "green" rates that allows customers to pay higher rates to support the use of alternate power sources, such as wind and solar energy.

Nevada Power Co. will be developing a proposal for "green" rates that allows customers to pay higher rates to support the use of alternate power sources, such as wind and solar energy.

It would be a first for Nevada Power, but utilities in about 35 other states already allow customers the opportunity to show their support for green power with their pocketbooks, according to the Department of Energy.

Under these programs, customers pay extra for electricity coming from so-called renewable energy sources. It's a way of encouraging utilities to supplement electricity from conventional coal and natural gas-fired power plants with so-called renewable power.

The Public Utilities Commission on Friday directed the Las Vegas electric utility to propose a green power rate as part of the company's next general rate case in October 2005.

However, the commission gave Nevada Power a lot of choices in what kind of program to propose.

"We're going to be looking at programs all over the West," said Jack Leone, a spokesman for Nevada Power.

The utility, for example, could review the Solar Partner program at Arizona Public Service Co. of Phoenix. That utility's residential customers are invited to pay $2.64 more each month to ensure that 15 kilowatt hours of electricity is generated by an Arizona Public Service solar plant. They also may buy additional 15 kilowatt hour blocks.

Leone, however, didn't have any details on what Nevada Power will propose a year from now.

Similarly, the PUC was reluctant to elaborate on what the company may consider. "We don't want to specify as to what type of filing the company should make," said Rebecca Wagner, a PUC spokeswoman.

This much is clear from the PUC meeting Friday: The program will be voluntary and will allow customers to pay extra for green power. In return, participants could be shielded from some of the impact of volatile natural gas prices, which sometimes drive up conventional power costs.

Commissioners said any renewable energy sources developed under the program should be in addition to any green power sources mandated under the state's 2001 renewable energy portfolio law. Under this law, Nevada Power is required to get increasing proportions of its power from renewable resources, until it reaches a maximum of 15 percent by 2013.

Numerous utilities are required to buy or generate increasing amounts of their power from renewable resources, but many power companies also offer customers a way to contribute toward further renewable power generation.

Some utilities allow customers to buy a specified amount of green power for a specific amount, said Jon Wellinghoff, an energy attorney with Beckley Singleton.

Others allow customers to make additional payments for unspecified renewable power.

Wellinghoff, however, favored a program that would allow customers to contribute funds to build solar systems at schools, public buildings or buildings used by nonprofit organizations.

These systems have several advantages. The electricity generated is used at the site, eliminating the loss from carrying the electricity over lines to other customers and freeing up capacity on power lines for other customers, he said.

The projects would benefit the local economy, provide power price stability to the user, and improve electric power reliability in Southern Nevada, he said.

In a related move, the PUC ordered Nevada Power to review the possibility of building a renewable energy system on one of their facilities, such as the roof of its headquarters.

(c) 2004, Las Vegas Review-Journal. Distributed by Knight Ridder/Tribune Business News.