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State Energy Efficiency Policy Database

Nevada

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Summary

Nevada's two investor-owned electric utilities, Nevada Power Company and Sierra Nevada Power, administer customer energy efficiency programs that are funded by rate adjustments noted on customer bills.  Both utilities are subsidiaries of NV Energy; since 2008, they have done business under the NV Energy brand. Nevada's renewable energy portfolio standard allows energy efficiency to be used in partial fulfillment of its portfolio requirements. Nevada utilities can recover lost revenues that result from successfully conducting energy efficiency programs. The levels of funding and program services have grown rapidly since Nevada reestablished requirements for energy efficiency programs provided by the state's investor-owned electric utilities, as well as integrated resource planning. These utilities aggressively pursued energy efficiency and grew their portfolio until they achieved saving of 1.5% of sales in 2009.  Since then their savings have dropped to half that amount. Nevada’s publicly-owned utilities also provide some energy efficiency programs to their customers.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

Nevada returned to a traditional regulated utility structure after it restructured its industry in the late 1990s. Nevada’s vertically integrated, investor-owned utilities are required to perform integrated resource planning and related demand-side management programs. The utility companies collect an energy efficiency system benefits charge through customers' electric rates. The companies file general rate cases every two years, at which time they request full recovery of their program costs.

The utility companies administer the energy efficiency programs with oversight by the Public Utilities Commission of Nevada (PUCN). The companies propose a three-year budget and program plan to the PUCN as part of 20-year integrated resource planning requirements. The utility companies must have their program plans and budgets approved by the PUCN prior to implementation. Sierra Nevada Power offers a small set of natural gas efficiency programs. Investor-owned utilities aggressively pursued energy efficiency and grew program portfolios, achieving a high of 1.5% savings in 2009. Since then, savings have dropped to half that amount.

Nevada’s publicly owned utilities (cooperatives and municipal utilities) also provide some energy efficiency programs to their customers.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


Energy Efficiency Resource Standards

Summary: 5% renewable energy by 2025—energy efficiency may meet a quarter of the standard in any given year, or 6.25%cumulative savings by 2025.

In 1997, Nevada established a renewable portfolio standard (RPS) as part of its restructuring legislation. Assembly Bill (AB) 3 of 2005 revised the RPS, increasing the portfolio requirement to 20% by 2015 and allowing utilities to use energy efficiency to help meet the requirements. Amendments in Senate Bill 358 of 2009 raised the portfolio requirement to 25% by 2025. Energy efficiency measures qualify if they are subsidized by the electric utility, reduce demand (as opposed to shifting peak demand to off-peak hours), and are implemented or sited at a retail customer’s location after January 1, 2005. Energy efficiency savings can meet up to a quarter of the total standard in any given year. AB1 of 2007 expanded the definition of efficiency resources to include district heating systems powered by geothermal hot water.

The Public Utilities Commission of Nevada (PUCN) established a program to allow energy providers to buy and sell portfolio energy credits (PECs) in order to meet energy portfolio requirements. The number of kWh saved by energy efficiency measures is multiplied by 1.05 to determine the number of PECs. For electricity saved during peak periods as a result of efficiency measures, the credit multiplier is increased to 2.0. PECs are valid for a period of four years. 

Since they are cumulative savings goals, the 25% target in 2025 will require only 6.25% of its sales in 2025 to be met with energy efficiency over a twenty-year period. The average annual savings goals for periods 2009-2011, 2011-2013, and 2013-2015 will be 0.375%, dropping to 0.25% for the next two five year intervals. While these levels provided motivation to the utilities to pursue energy efficiency in the early years as they were building their efficiency programs, these levels are now far below the companies' actual achievements and are no stimulus to be aggressive in conducting energy efficiency today.

In 2013, the legislature voted to phase out this energy efficiency allowance in order to effectively increase the requirement for new renewable energy.  

Nevada has no Natural Gas EERS.


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August 30, 2013


Alternative Business Models

In May 2011, the Public Utilities Commission of Nevada (PUCN) issued an order approving the first recovery of lost revenues from demand-side management (DSM) programs for NV Energy, parent company of Nevada Power and Sierra Pacific Power Companies.  This was the first filing under new regulations that provide for the recovery of DSM expenses and lost revenues in an annual balancing account. 

In 2008, the Commission adopted temporary rules pursuant to a 2007 law allowing gas utilities to propose decoupling their profits from their sales in a general rate case filed within one year of the approval of their energy efficiency programs. The rules specify a revenue-per-customer system for determining utility revenues to recover fixed costs. The PUCN adjusts this revenue on a per-class basis (i.e., “residential”) (PUCN Docket No. 07-06046 and Nevada Admin. Code 704.953).  Gas utilities in Nevada can choose to either implement decoupling or use a performance incentive.


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August 30, 2013


Reward Structures for Successful Energy Efficiency Programs

In May 2010 the Commission adopted regulations pursuant to a 2009 law for a lost revenue recovery mechanism providing for annual recovery of NV Energy’s efficiency program expenses and its fixed cost revenues lost from the reduced sales caused by the efficiency programs. A previous 5% additional rate of return incentive was eliminated, and instead a party may file a request for an incentive on a program-by-program basis.


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August 30, 2013


Energy Efficiency as a Resource

Nevada Administrative Code §704.934 directs each regulated utility to submit a plan for conservation and load management as part of its resource plan. The plan must include, among other things:

  • an assessment of potential savings attributable to technically feasible programs for conservation and load management
  • a list of proposed programs for reducing energy and demand
  • a determination of the reduction in the use of energy and the demand for energy that would result from the proposed programs
  • an assessment of the costs of the proposed programs and the reductions in the utility’s costs produced by the proposed programs
  • and an assessment of the impact on the utility’s load shapes of proposed and existing programs for conservation and load management.

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August 30, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC, UC, RIM, SC (TRC is primary)
  • Uses a deemed savings database: no

The evaluation of ratepayer-funded energy efficiency programs in Nevada relies on regulatory orders (NAC 704). Evaluations are mainly administered by the utilities and are conducted for each program. There are no specific legal requirements for these evaluations in Nevada. Nevada considers four of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC) test, the Utility Cost (UC) test, the Rate Impact Measure (RIM), and the Societal Cost (SC) test. Nevada specifies the TRC to be its primary test for decision making. The benefit-cost tests are required for overall portfolio, total program, and individual measure level screening. The rules for benefit-cost tests are stated in NAC 704.934. Some exceptions exist in the application of benefit-cost tests to low-income programs, pilots, and new technologies. Screening levels vary by utility.


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August 30, 2013