On the same day in December that the Public Utilities Commission of Nevada voted to increase bills for solar customers, it dealt another blow to the state’s renewable energy efforts. The commission approved cutting popular energy efficiency programs for Southern Nevada residents, programs that lowered the cost of residential LED lights, assisted customers with recycling their refrigerators and helped cover the cost of expensive high-efficiency pool pumps.
Amid the loud backlash to the new solar rates, the cuts have gone largely under the radar. But in a filing earlier this month, NV Energy asked the state’s utilities regulators for permission to reinstate at least two of the programs, which provided rebates to Southern Nevada residents for purchases and installation of energy efficient equipment and devices.
“We think it’s a short-sighted decision that fails to look at this bigger picture of the more costly resources that will be required (by NV Energy) if these programs are cut,” Howard Geller, executive director of the Southwest Energy Efficiency Project, said of the regulators’ decision.
The commission’s rationale for the eliminations was prompted by a desire to restrain NV Energy’s budget, a move designed to help keep down energy costs for the utility's overall group of consumers. Part of its reasoning for a lower budget is uncertainty with the utility’s load forecast, which affects the utility’s financial planning, as several gaming companies consider leaving the utility.
But the move raised questions among critics who said the programs already helped keep down energy costs across the board by reducing demand on NV Energy's power production and helping curb the need for expansion of the grid.
In adopting a lower budget, commissioners also decided to evaluate some of the programs. Not doing so risks that the “programs will continue in perpetuity with ever-increasing budgets,” the commission argues, noting that many “have been in place for nearly a decade or more.”
Commissioners argued that the cost of residential lighting has decreased. They also expressed concern that the residential lighting program has a free-rider problem and questioned how much of a subsidy is enough, noting that if the program continues its success, NV Energy will have rebated more than three LEDs for each of its 770,000 customers in Southern Nevada by 2018.
“The purpose of this program is not to relight homes in Las Vegas,” they wrote.
When addressing a program that provides refrigerator pickup and disposal, commissioners made a similar argument — that a popular and effective program’s time had come and gone.
Of the program implemented in 2003, they wrote: “After nearly 13 years, substantial progress to dispose of old, inefficient units should have been made. (NV Energy) and ratepayers should no longer be held responsible for the cost to collect and dispose of extra refrigerator units.”
A rebate for installing efficient pool pumps — estimated to be $250 — was discontinued after commissioners said it had been in place long enough for most customers to reap the incentive. Keeping it in effect much longer created the possibility of customers getting a second incentive for their replacements. “At some point the market needs to be self-sufficient,” they wrote.
It also cut a solar thermal water heating program.
While the commission lowered the overall funding of NV Energy’s energy efficiency programs, it retained a portion of funding for two, including an incentive for high-efficiency air conditioning.
But NV Energy is challenging the decision. It asked the commission to re-evaluate, pushing it to reinstate the rebate for efficient pool pumps and the discount on LED lighting.
Responses to that request are due early next week.
The commission is likely to weigh the issue at a public meeting in February.
NV Energy argues that keeping the programs in place would avoid stopping programs that have been popular with customers. “Granting reconsideration and authorizing continuation of the Pool Pumps and Residential Lighting programs will provide (NV Energy’s) customers with more options and choices that will provide benefits to all customers,” they argue in their request.
Geller, with Southwest Energy Efficiency Project, said “their request is very reasonable if not modest.” His organization plans to endorse NV Energy’s request in a filing later this week.
Initially, NV Energy had requested that the commission grant it a budget of $56 million in 2016, about a $5 million increase from its current budget. The commission ultimately went with a lower budget for energy efficiency programs, setting it at about $41 million. In its request for reconsideration, NV Energy said it would reinstate the pool pump and lighting programs with the lowered budget.
As a share of revenue, NV Energy in Southern Nevada will be spending in some cases half as much as other regional utilities, such as Rocky Mountain Power in Utah, spend on their energy efficiency programs, Geller said of the $41 million budget that the commission approved.
Geller said the programs, which reduce the amount of energy that Southern Nevada customers consume, could lower the utility’s need for greater investment in expensive infrastructure such as power plants — costs that are often passed along to all ratepayers.
“Customers' utility bills will be higher without these programs, not lower,” he said.
Some businesses involved in the sale or installation of energy efficient products also predicted they would be affected by cuts in the program. Howard Tubin, the owner of Kat’s Pool Service, has helped calibrate variable speed, energy efficient pool pumps in the valley for about five years.
“I think it’s hurt the industry, and it’s going to hurt my business,” he said.
Home Depot, the home improvement giant that sells LED lights, sees rebates as a good way to entice customers to adopt the technology, Stephen Holmes, a spokesman for the company, said.
“LED technology not only saves customers (money) over time but it also helps save the environment,” he said. “We are proponents of most of the measures that encourage their use.”