Pass AB405: It’s Time To Change

In a 2006 paper titled “Regime Change and Corruption: A History of Public Utility Regulation,” Werner Troesken summarized various types of utility reform.

He wrote that over the last one-hundred years local and state leaders have enacted various utility regulations to combat corruption and improve public life.  In some instances, municipalities converted private utilities into public enterprises to address consumer outrage over poor management, high billing rates, or outbreaks of disease, in the case of water.  While in other cases, states transitioned municipal utilities into privately-held, but state regulated, companies due to egregious political corruption.

Troesken’s main point, though, was that water and energy are so important for a community’s well-being, some form of utility regulation has been the status quo in every state since 1900.

It’s within this context that our legislature has been debating a slew of clean and renewable energy bills.  None of these pieces of legislation propose to eliminate NV Energy; but some do require the utility to change how it treats newer forms of energy production.  This includes energy produced by individual homeowners through rooftop solar. 

One bill specifically, AB 405, proposes new rules to govern relationships between NV Energy and rooftop solar owners and between rooftop solar customers and solar panel companies. Owners would be able to sell excess power back to NV Energy at an attractive rate and customers would receive stronger protections.

It’s not surprising NV Energy doesn’t like being told how to manage its portfolio or how to control energy inputs and outputs, but this isn’t the main issue underlying current disagreements over AB 405. Legislators aren’t mulling over whether NV Energy likes AB 405, instead they are deciding how to best protect consumers.  So, the focus is: Will accepting or rejecting changes to the status quo benefit or harm Nevadans?   

On one side, we have legislators who believe protecting the status quo will benefit Nevadans from every part of the socioeconomic spectrum, while on the other side we have equally passionate advocates who argue for benefiting consumers by creating a rational path to move from one model of energy production and distribution to another. 

History tells us that the most effective forms of public regulation of utilities over the past one-hundred years, have included both protections and mechanisms that allow for big and small changes.  In fact, clinging to the status quo has often invited more disruptive future measures.  So, as we work through the last week of the legislative session, we hope our elected representatives can find common ground, work to fashion appropriate amendments, and then pass AB 405 to both protect Nevadans and allow for a smooth transition from one form of energy production to another.