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Nevada approves NV Energy resource plans for more solar, less coal

Nevada regulators on Dec. 21 approved NV Energy Inc.'s resource plans to add 1,001 MW of contracted solar capacity and 100 MW of storage and retire an aging coal plant unit four years earlier than scheduled.

The company announced in May that it had contracted for the solar capacity from six major projects in Nevada plus storage projects that will be tied to three of those projects.

Public Utilities Commission Chairman Ann Wilkinson introduced an order Dec. 21, which Commissioners Ann Pongracz and C. J. Manthe joined with her in agreeing to accept the so-called preferred provisions of NV Energy's 20-year integrated resource plan, or IRP. The preferred "low carbon case" calls for the solar and storage projects and the early retirement of the 254-MW North Valmy Station unit 1 in 2021. NV Energy owns half of this unit along with IDACORP Inc. subsidiary Idaho Power Co., and it was originally set for retirement in 2025.

Wilkinson noted the solar contracts have historically low prices that will range from $21.55/MWh up to $29.96/MWh and said the plan, with an estimated more than $2 billion of "progressive investment," will provide significant economic benefits and diversifying generation resources, reducing the utility's carbon emissions and limiting its exposure to fossil fuel price volatility.

Along with the 2019-2038 Triennial Integrated Resource Plan, the commissioners in the same order approved action, financial and energy supply plans for the next three years.

The IRP provides analysis of the projected need for electricity over the planning period and the utility's plans for meeting that need. This was the first time NV Energy subsidiaries Nevada Power Co. and Sierra Pacific Power Co. filed a joint application for an IRP approval. The two subsidiaries coordinate the operation of physical assets and are subsidiaries of Berkshire Hathaway Energy. They both use the name NV Energy.

NV Energy has a short-term goal of doubling its renewable resources by 2023 and a longer-term aspirational goal of delivering 100% renewable energy to its customers, the order said.

However, the planning environment in which NV Energy operates is becoming "increasingly fractured and uncertain" due to where and how new large customers with their own independent energy supply sources will need power delivered, the commission said in its order. The uncertainty is created by increasing departures of large customers from NV Energy's energy supply service and new customers who want similar service arrangements.

That uncertainty led to conditions in the plans for retiring the North Valmy unit early, although NV Energy said it provides reliability and flexibility of service in northern Nevada, where the transmission system is constrained.

The order points out that the Smart Energy Alliance, a nonprofit organization representing large energy users, criticized the IRP for failing to properly account for customers leaving NV Energy's system and that the alliance contended the utility company's request for additional generation resources is unnecessary and economically burdensome to customers.

Large customers departing NV Energy's service have to pay millions of dollars in stranded costs to support generation facilities the utility continues to maintain, and the alliance argued that the utility should consider the capacity that is freed up due to these departures, rather than adding more generation that could add to those stranded costs.

Advocacy group Vote Solar said NV Energy failed to consider adding more solar resources at current low prices to retire its fossil fuel generation sooner. NV Energy seeks to extend the lives of eight gas-fired combustion turbines and should instead consider replacing those units with solar and storage, the group said. NV Energy received bids totaling 3,774 MW of renewable energy capacity and 797 MW of battery storage in its 2018 request for proposals, Vote Solar noted. North Valmy unit 2 could be retired sooner than the planned 2025 date as well, the group said.

The commission said Vote Solar's approach would increase ratepayer costs. (PUC of Nevada Docket No. 18-06003)