Nevada and Arizona Ballot Measures Would Require Utilities to Use More Renewable Energy Sources

Nevada and Arizona voters will decide on Election Day whether to strengthen their utilities’ renewable energy goals, but only one state’s referendum has seen real opposition.

San Francisco billionaire and Democratic megadonor Tom Steyer is behind Nevadans for a Clean Energy Future and Clean Energy for a Healthy Arizona, both of which are sponsoring measures to amend their respective state’s constitution.

Nevada Question 6 and Arizona Proposition 127 would require investor-owned electric utilities to generate or buy 50 percent of their power from renewable sources by 2030. The current renewable portfolio standard, or RPS, is 25 percent by 2025 in Nevada and 15 percent by 2025 in Arizona.

“It actually will lead to lower costs and save a lot of money for consumers,” Steyer told The Associated Press in July. “It leads to clean air and a lot better health outcomes for Arizonans, and it should create literally tens of thousands of jobs in the state of Arizona. So it's hard to understand why these people are fighting it.”

The Arizona measure is generating stiff opposition from utilities, which say it will force them to raise rates dramatically and provoke other problems in the energy market.

But for NV Energy, the electric utility that serves 2.4 million of the state’s nearly 3 million residents, raising the renewable requirements in Nevada isn’t the most pressing measure on the ballot.

Instead, the utility is concentrating its election strategy on a different proposition. Question 3 would amend the state constitution to allow residents to choose their power provider by 2023—restructuring Nevada’s electricity market and ending NV Energy’s statewide monopoly. NV Energy currently makes, distributes and sells most of the state’s power.

“That is a much bigger threat to NV Energy,” said David Pomerantz, executive director of the Energy and Policy Institute, a renewable advocacy group. “The RPS doesn’t really affect these companies’ business models.”

Question 3’s biggest proponents are casinos and data operators marketing themselves as pro-100 percent renewable, but who believe they can can get cheaper electricity in a more competitive market, Pomerantz added.

Owned by Warren Buffett's Berkshire Hathaway, NV Energy is expected to spend $30 million opposing Question 3. The utility has also threatened to reverse its plan to double renewable generation by 2023, switching instead to the state minimum, should the measure pass.

“If passed, Question 3 would dismantle the state’s power system in both urban and rural areas, and halt the progress being made with renewables,” said utility spokeswoman Jennifer Schuricht in an email.

She added that because of the issue of Question 3, the company is not addressing the other constitutional amendments. “NV Energy is focused on working with a broad-based, bipartisan coalition of community and business leaders to defeat Question 3 and, as such, will not be taking a position on the other proposed measure at this time,” she said.

A 50 percent RPS is still viable within the restructured market because of how Question 3 was written, but that doesn’t mean Question 6, which is expected to pass without serious opposition, is out of the woods, Pomerantz said.

NV Energy didn’t take a position the first time the “energy choice” measure made the ballot in 2016, and passed with 72 percent of the vote, because constitutional amendments must be approved by voters in two successive general elections in Nevada. In effect, NV Energy has the luxury of waiting until 2020 to decide whether to spend political capital opposing Question 6, and that seems like the prudent course given the utility “got absolutely battered in public opinion” after losing the distributed rooftop solar fight some years back, Pomerantz said.

There’s also the chance NV Energy officials simply aren’t opposed.

About 30 states with Republican and Democratic governments passed renewable portfolio standards in the early 2000s to spur renewable energy generation, make the electric grid cleaner by displacing fossil fuels, combat climate change, and create jobs. Some states have since strengthened their standards, with California approving a 100 percent RPS by 2025.

Arizona’s RPS was ahead of the curve when it was passed, but the Arizona Public Service, the state’s largest electric utility, is fighting an update via Proposition 127 on two fronts.

Despite proponents submitting a petition to place the measure on the ballot with twice the number of required signatures, APS’s political action committee, or PAC, sued over their validity. Simultaneously, APS’s parent company, Pinnacle West Capital Corp., has contributed $22 million to the company’s Arizonans for Affordable Electricity PAC and others to oppose the measure’s passage.

By comparison, Clean Energy for a Healthy Arizona, which pushed the issue, has received $18.5 million from Steyer’s NextGen Climate Action PAC through September.

Tucson Electric Power registered a PAC last month to oppose Proposition 127, arguing its average customer would see bills rise $500 annually and businesses would be hit with as much as a $3,000 hike.

“California billionaire Tom Steyer will spare no expense in his shameless bid to buy this election and force his costly, California-style energy regulations down the throats of Arizona families,” said Matthew Benson, spokesman for Arizonans for Affordable Electricity, in an August press release, reported The Arizona Republic.

APS further argues that adding more renewables to the grid would create a surplus power supply during non-summer months that could force the nation’s largest nuclear power plant in Palo Verde off the grid—leading to its closure.

Pomerantz said that surplus energy, when properly stored, is cheaper.

The real reason for APS’s opposition lies in its 15-year integrated resource plan, “which is very strikingly out of step with some of its industry peers” in embracing solar and storage, he added. APS’s plan proposes an additional 5,000 megawatts of electricity generation from new gas-fired power plants and no renewable sources.

“It’s existing plan is very much incompatible with a 50 percent RPS,” Pomerantz said.