NAC704.8887. Long-term portfolio energy credits contracts, long-term renewable energy contracts and energy efficiency contracts: Determination of whether price for electricity is reasonable.

     1. For the purposes of this section, each utility provider shall calculate the price for electricity acquired or saved pursuant to a long-term portfolio energy credits contract, long-term renewable energy contract or energy efficiency contract by calculating the levelized market price for the electricity based on:

     (a) The rates for electricity and capacity set forth in the contract;

     (b) Any escalators or inflation indices set forth in the contract;

     (c) Any delivery projections for electricity and capacity set forth in the contract; and

     (d) Any other terms and conditions set forth in the contract that would affect the price paid for electricity acquired or saved pursuant to the contract.

Ê All data that the utility provider uses to make its calculation must be based on the most current projections available when the contract is executed.

     2. After the utility provider calculates the price pursuant to subsection 1, the Commission will determine whether the price is reasonable. In making its determination, the Commission will consider, without limitation:

     (a) Whether the contract comports with the utility provider’s most recently approved plan to increase its supply of or decrease the demand for electricity that is submitted to the Commission pursuant to NAC 704.9005 to 704.9525, inclusive;

     (b) The reasonableness of any price indexing provision set forth in the contract;

     (c) As compared to competing facilities or energy systems that use one or more fossil fuels as their primary source of energy to generate electricity, whether the renewable energy systems that are subject to the contract will reduce environmental costs in this State, including, without limitation:

          (1) Air emissions;

          (2) Water consumption;

          (3) Waste disposal and other land uses; and

          (4) Impacts on wildlife;

     (d) The net economic impact and all environmental benefits and environmental costs to this State in accordance with NAC 704.9005 to 704.9525, inclusive;

     (e) Any economic development benefits that might inure to any sector of the economy of this State;

     (f) The diversity of energy sources being used to generate the electricity that is consumed in this State;

     (g) The diversity of energy suppliers generating or selling electricity in this State;

     (h) The value of any price hedging or energy price stability associated with the contract;

     (i) The date on which each renewable energy system that is subject to the contract is projected to begin commercial operation;

     (j) Whether the utility provider has any flexibility concerning the quantity of electricity that the utility provider must acquire or save pursuant to the contract;

     (k) Whether the contract will result in any benefits to the transmission system of the utility provider; and

     (l) Whether the electricity acquired or saved pursuant to the contract is priced at or below the utility provider’s long-term avoided cost rate.

     3. If a utility provider will be using a long-term portfolio energy credits contract, long-term renewable energy contract or energy efficiency contract to comply with the solar energy requirements of its portfolio standard, the price for electricity acquired pursuant to that contract will be evaluated separately from the price for electricity acquired or saved pursuant to other long-term portfolio energy credits contracts, long-term renewable energy contracts or energy efficiency contracts that will not be used to comply with the solar energy requirements of the portfolio standard.

     (Added to NAC by Pub. Utilities Comm’n by R144-01, eff. 5-31-2002; A by R004-04, 5-25-2004; R167-05, 2-23-2006; R064-10, 10-15-2010)