Question 3 asks: “Shall Article 1 of the Nevada Constitution be amended to require the Legislature to provide by law for the establishment of an open, competitive retail electric energy market that prohibits the granting of monopolies and exclusive franchises for the generation of electricity?” Yes or no?
No, but barely. Energy choice and encouraging renewables are extremely worthwhile goals, but the past two years since phase one passed have proven that Question 3 is a formula for chaos. There are much better ways to accomplish this goal.
To understand why, it’s important to go over some background.
The measure would establish energy choice by requiring the state to dump its regulatory monopoly model in favor of a competitive retail electric system. The state would be required to make the switchover by 2023.
Under the new model, NV Energy would continue to maintain the system of wires through which energy is transmitted. But the generation and retail sale of electricity would be opened to multiple companies using mechanisms that are, as yet, unknown.
There are multiple, serious problems with this initiative, not the least of which is the timeline. Given that the Nevada Legislature meets every other year, it means that lawmakers would essentially have only two full sessions, and a small portion of a third, to create the regulatory framework for the new system. In the interim, chaos could reign—the only winners would be the lobbyists.
Moreover, this is an extraordinarily difficult task for a Legislature that has already proven itself incapable of handling these issues.
With lawmakers rushing through the process—and being pushed and pulled by lobbyists from both sides—it’s easy to imagine them creating a Frankenstein’s monster of a system with elements pandering to different special interests and not representing the interests of the citizens.
Let’s be honest: Energy policy is very, very hard work. It affects every aspect of our lives and the growth of our economy. And it demands a seriousness and incremental approach that ensures the right decisions are made. Question 3 would install a shot clock via a constitutional measure, which is profoundly dangerous.
Yes, we need to create a competitive energy market. Yes, we need more renewable energy. But we need to do it right, ensuring that we establish an even playing field for businesses while also protecting consumers.
That being the case, our position on the measure is a very, very slim no.
That’s a switch from the first time the measure was on the ballot, in 2016. We supported it then in the hope that lawmakers would recognize the call from voters demanding a change and would start working toward it.
Voters approved the measure overwhelmingly, giving lawmakers a clear message that they insisted on energy choice, but the Legislature did nothing in the intervening two years.
This fact alone should scare voters off of approving of Question 3 now, flipping on a timer powered by a constitutional amendment and then counting on the Legislature to finally do what it has proven itself incapable of until now.
That must not happen. Instead, lawmakers and a newly minted governor should head into the 2019 session with a full understanding that the voters are screaming for a measured and intelligent change in how energy is provided in Nevada.
The current model clearly isn’t working, except maybe for NV Energy. Major businesses like MGM Resorts International, Sands Corp. and Switch have dumped the utility in favor of establishing otherpower sources, paying hundreds of millions of dollars in exit fees to cut their ties, and the exodus continues. Meanwhile, residential customers without the means to create their own power generation have no choice but to stick with NV Energy.
It is worth noting that Switch and Sands Corp. are major financial backers of Question 3, even though they have left the system. A heroic view of this is that even though they’re gone, Switch and Sands are still fighting for Nevada consumers. A more skeptical view would be that Switch intends to build renewable plants and wants to sell power into a deregulated market.
This is part of the challenge of unraveling Question 3—you’ve got billionaires on all sides of this, all claiming they have the interests of average citizens at heart.
Meanwhile, NV Energy has been a bad actor on energy issues in recent years, particularly in squelching the development of rooftop solar by insisting on unfavorable rates on net metering. The utility’s fear of competition has held back the proliferation of renewable energy, hurting both consumers and the environment.
NV Energy’s new president insists that it has learned from the recent events and that the company is changing. It understands the public has had enough with the old ways. NV Energy will be more open, more flexible, less convulsively destructive to anyone who wants to modernize our energy system.
These are a lot of promises from a company that has been nothing short of brutal in trying to prevent change. If Question 3 fails, as it should, NV Energy should understand that this is not over and the voters have issued a clear and certain call for NV Energy to behave in a different manner with its consumers and competitors. Here’s why: Unless NV Energy wakes up, this will all be back again. There will be no mercy and no reason to believe a word NV Energy says.
There is no question a big part of the appeal of Question 3 arrives simply from a desire to give the power company a punch in the face after years of ignoring consumers and thwarting even the slightest competition and choice. We get it. It’s a perfectly natural impulse and we share it.
None of this should have ever reached this point. NV Energy, abetted by the Legislature, have invited this on themselves.
The problem remains, though, that we’ll also be punching ourselves in the face if Question 3 passes.
Instead, sober and open minds on all sides—and especially our new governor—should understand that the voters want change, choice and energy alternatives. These sober minds—with only the benefit to the state’s consumers and businesses at stake—should work together in a sensible manner to deliver that change. Without a clock ticking. Without inviting legislators who have failed at this before to fail again under the shadow of a constitutional amendment.
The general goals of Question 3 are not incorrect, but the method is a formula for chaos.
Enough. Although the initiative isn’t the method for doing it, a competitive and well-regulated energy market is needed. So is full-throttle development of renewable energy.
Get cracking, lawmakers.
Question 6: The renewable energy promotion initiative
A related ballot question, though not to be confused with Question 3, is the renewable energy promotion initiative. It asks:
“Shall Article 4 of the Nevada Constitution be amended to require, beginning in calendar year 2022, that all providers of electric utility services who sell electricity to retail customers for consumption in Nevada generate or acquire incrementally larger percentages of electricity from renewable energy resources so that by calendar year 2030 not less than 50 percent of the total amount of electricity sold by each provider to its retail customers in Nevada comes from renewable energy resources?” Yes or no?
We’re neutral. This is a well-intentioned measure, but we feel the market forces make it inevitable that the state will meet or even exceed these targets. The costs of renewable-energy generation are steadily falling, meaning it’s increasingly more cost-effective to build solar arrays, wind farms and geothermal generators than fossil fuel-burning plants.