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Is Energy Restructuring A Good Thing For Nevada?

In about 100 days, voters in Nevada will have a big choice to make. 

Do they want to change the state's Constitution to restructure the energy market, essentially ending the regulated monopoly held now by NV Energy?


Meredith Levine is the director of economic policy for the Kenny Guinn Center for Policy Priorities.  She’s the author of a detailed study on energy restructuring.

Levine said the first thing voters need to know about the ballot measure is it is not deregulation. Deregulation implies that regulations for the market would be removed. In reality, the change would mean a diversified system with the potential for more choice.

"We would move to a different system where the ability to select one's retail electric supplier would be possible for the state's residents and businesses," Levine said.

The idea is more choice means more competition, but Levine said other states that have taken the same approach have had mixed results. Texas, for instance, restructured its energy market in a way that allowed a lot of competition. 

Other states have done it will less success.

Levine said it really depends on how the Legislature goes about implementing the constitutional amendment - if it passes.

Lawmakers would have to work out the restructuring's potential impact on rooftop solar panels, along with rate caps, billing processes, and any new regulatory infrastructure needed. Those are just a few of the complex details that would need to be worked out.

The big question for most voters is whether the restructuring would raise or lower their power rates. Levine said the power rates are really determined by the price of natural gas. 

Currently, NV Energy can't make a profit off those gas price fluctuations but when other states have restructured energy markets they have allowed companies to make a profit on gas price changes.

"In the best case scenario market, the supply costs and the wholesale costs actually start to approximate one another," she said, "When you look at that, what you're looking for is are natural gas prices going up or are they going down." 

She said when something extreme happens with the natural gas supply, like supply chain disruptions from hurricanes, for instance, then gas prices go up and with restructuring, Nevada won't be as insulated from those changes as it currently is. 

Levine also said because the ballot measure is a constitutional amendment, making changes to it or repealing it would be more difficult than if it were a law created and passed by the Legislature. 

She was reluctant to say if the changes would be a good thing or a bad thing for Nevada. Instead, she preferred that people look over the facts of the bill and make their own decision.​

Meredith Levine, director of economic policy, Kenny Guinn Center for Policy Priorities. 

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Joe Schoenmann joined Nevada Public Radio in 2014. He works with a talented team of producers at State of Nevada who explore the casino industry, sports, politics, public health and everything in between.