NV Energy Inc.'s proposed sale of renewable energy credits to Switch Ltd. is under scrutiny by state regulators, who question whether the Nevada utility can afford to give up its credits since it has forecast that it may not have enough of them to meet state green energy requirements through 2021.
Switch, a data center provider with facilities in Las Vegas; Reno; Grand Rapids, Mich.; and near Milan, Italy, and Bangkok, Thailand, and NV Energy have clashed recently over related issues. Switch CEO and founder Rob Roy helped launch the Energy Choice Initiative on the 2018 ballot to remove NV Energy as a monopoly energy provider. Earlier, Switch sued NV Energy and the state's Public Utilities Commission after feeling shortchanged in a renewable energy deal, but dropped the suit and agreed to pay the utility a $27 million-plus exit fee so that Switch could arrange for its own power supplies in its quest for 100% green power.
Before that deal was concluded, Switch had arranged to build and sell output from two solar projects to NV Energy, which in turn delivers power to Switch's data centers. The projects came on line in 2017. In order to comply with the state's renewable portfolio standard before the solar projects reached full production, Switch agreed to buy renewable energy credits from NV Energy. Nevada has a unique system of green credits, called portfolio energy credits, or PECs, which it uses to track compliance with the RPS. One PEC represents the green energy attributes of 1 kWh.
NV Energy's Nevada Power Co. subsidiary asked the commission to approve its request to sell up to 170 million surplus PECs generated in 2016 and 2017 to Switch. NV Energy said the agreement would be similar to one the PUC already approved for its Sierra Pacific Power Co. subsidiary in northern Nevada.
The Public Utilities Commission on May 30 decided to set NV Energy's petition for the PEC sale agreement with Switch for further review after the PUC's general counsel pointed out that, in its annual RPS compliance report, the utility said that it may not generate enough renewable energy to meet future RPS compliance requirements through 2021. "Chronic multi-year credit shortfalls" could force the utility to issue requests for proposals for renewable energy generation, the report said.
The PUC lawyers want the commissioners to consider whether ratepayers could have to foot the bill if NV Energy sells its "surplus PECs" and has to procure more renewable resources later to make up for a shortfall of the credits.
While NV Energy's utilities have generated PEC surpluses in past years, the future looks uncertain. The biggest problem is the underproducing Crescent Dunes Solar (Tonopah Solar) facility, a 110-MW concentrating solar and molten salt storage facility. Crescent Dunes missed its 2017 contractual credit supply requirement by about 476 million PECs, the general counsel noted.
