NAC704.9453. Inclusion of emissions reduction and capacity replacement plan in supply plan of electric utility that primarily serves densely populated counties; contents.

     1. Except as otherwise provided in this subsection, an electric utility that primarily serves densely populated counties shall include in its supply plan an emissions reduction and capacity replacement plan. The utility shall file its initial emissions reduction and capacity replacement plan on or before May 1, 2014, and shall file each subsequent emissions reduction and capacity replacement plan with its resource plan. The utility may amend its emissions reduction and capacity replacement plan in its resource plan or by filing an amendment to its resource plan.

     2. With respect to the retirement or elimination of coal-fired electric generating capacity which must be provided for in the emissions reduction and capacity replacement plan of an electric utility that primarily serves densely populated counties pursuant to paragraph (a) of subsection 2 of NRS 704.7316, the emissions reduction and capacity replacement plan of the utility must:

     (a) Include a schedule specifying the date by which the utility proposes to retire or eliminate:

          (1) Not less than 300 megawatts of coal-fired electric generating capacity, which must not be later than December 31, 2014.

          (2) Not less than 250 megawatts of coal-fired electric generating capacity in addition to the generating capacity retired or eliminated pursuant to subparagraph (1), which must not be later than December 31, 2017.

          (3) Not less than 250 megawatts of coal-fired electric generating capacity in addition to the generating capacity retired or eliminated pursuant to subparagraphs (1) and (2), which must not be later than December 31, 2019.

     (b) Identify each coal-fired electric generating unit that the utility proposes to retire or eliminate.

     (c) Specify the amount of planning capacity associated with each coal-fired electric generating unit that the utility proposes to retire or eliminate.

     (d) Identify the estimated unamortized balance of the utility’s investment in each coal-fired electric generating unit that the utility proposes to retire or eliminate.

     (e) Identify the estimated unamortized balance, as of the proposed retirement or elimination date, of the utility’s investment in common assets directly related to each coal-fired electric generating unit that the utility proposes to retire or eliminate.

     (f) Provide an estimate of the timeline for, and costs that the utility reasonably anticipates will be incurred in, the process of decommissioning each coal-fired electric generating unit that the utility proposes to retire or eliminate.

     (g) Provide an estimate of the timeline for, and costs that the utility reasonably anticipates will be incurred in, the process of remediating the land upon which each coal-fired electric generating unit that the utility proposes to retire or eliminate is located.

     (h) Provide an estimate of any offsets of the costs of decommissioning each coal-fired electric generating unit that the utility proposes to retire or eliminate and remediating the land upon which each such unit is located.

     (i) Identify any contractual or regulatory obligations associated with each coal-fired electric generating unit that the utility proposes to retire or eliminate.

     (j) Provide the costs, if any, associated with terminating any contractual or regulatory obligations identified pursuant to paragraph (i).

     (k) Provide all contract terms and regulatory obligations that survive the retirement or elimination of each coal-fired electric generating unit that the utility proposes to retire or eliminate.

     (l) Provide the anticipated end date of any liability associated with the contractual and regulatory obligations that survive the retirement or elimination of each coal-fired electric generating unit that the utility proposes to retire or eliminate.

     3. With respect to the construction and acquisition of, or contracting for, 350 megawatts of electric generating capacity from renewable energy facilities which must be provided for in the emissions reduction and capacity replacement plan of an electric utility that primarily serves densely populated counties pursuant to paragraph (b) of subsection 2 of NRS 704.7316, the emissions reduction and capacity replacement plan of the utility must:

     (a) Include a schedule for the issuance of requests for proposals for 300 megawatts of nameplate generating capacity from new renewable energy facilities that:

          (1) Specifies the date by which the utility will release public notice for:

               (I) The first request for proposals for 100 megawatts of nameplate generating capacity from new renewable energy facilities, which must not be later than December 31, 2014.

               (II) The second request for proposals for 100 megawatts of nameplate generating capacity from new renewable energy facilities, which must not be later than December 31, 2015.

               (III) The third request for proposals for 100 megawatts of nameplate generating capacity from new renewable energy facilities, which must not be later than December 31, 2016.

          (2) For each request for proposals described in subparagraph (1), identifies the approximate date by which the utility reasonably anticipates:

               (I) Announcing the entity with which the utility intends to negotiate binding transactional documents.

               (II) Concluding negotiations for binding transactional documents.

               (III) Filing an amendment to its emissions reduction and capacity replacement plan to seek the Commission’s approval and acceptance of final transactions to construct, acquire or contract with the new renewable energy facilities.

     (b) Provide for the construction or acquisition of a portion of a new renewable energy facility or facilities with a generating capacity of 50 megawatts to be owned and operated by the utility. With respect to the new renewable energy facility or facilities described in this paragraph, the emissions reduction and capacity replacement plan of the utility must include:

          (1) A reasonable description of the new renewable energy facility or facilities.

          (2) A budget for the new renewable energy facility or facilities.

          (3) The date by which the utility proposes to begin construction of or acquire the new renewable energy facility or facilities, which must not be later than December 31, 2017.

          (4) If applicable, the date by which the utility reasonably anticipates completing the construction of the new renewable energy facility or facilities, which must not be later than December 31, 2021.

          (5) A description of the ancillary utility facilities, if any, necessary to operate or interconnect the new renewable energy facility or facilities.

          (6) The performance and reliability standards to which the new renewable energy facility or facilities will be subject and a statement of how those standards compare to standards that the utility has mandated from other renewable energy facilities with which the utility has executed power purchase agreements.

Ê An electric utility that primarily serves densely populated counties shall not accept proposals responsive to a request for proposals described in sub-subparagraphs (II) and (III) of subparagraph (1) of paragraph (a) until the previous request for proposals process has been completed. If an electric utility that primarily serves densely populated counties or an affiliate of such a utility submits a proposal in response to a request for proposals described in subparagraph (1) of paragraph (a), the utility must use an independent evaluator selected in consultation with the staff to identify the renewable energy facility or facilities that satisfy the criteria set forth in subparagraph (4) of paragraph (b) of subsection 2 of NRS 704.7316, and shall include in the request for proposals the performance and reliability standards to which the new renewable energy facility or facilities will be subject and a statement of how those standards compare to standards that the utility has mandated from other renewable energy facilities with which the utility has executed power purchase agreements. A utility may not recover from ratepayers any of the costs associated with the use of an independent evaluator pursuant to this subsection.

     4. With respect to the construction or acquisition and ownership of electric generating plants with an electric generating capacity of 550 megawatts which must be provided for in the emissions reduction and capacity replacement plan of an electric utility that primarily serves densely populated counties pursuant to paragraph (c) of subsection 2 of NRS 704.7316, the emissions reduction and capacity replacement plan of the utility must include:

     (a) A reasonable description of the electric generating plant or plants with a total generating capacity of approximately 550 megawatts that the utility proposes to construct or acquire and own.

     (b) A budget for each such electric generating plant.

     (c) The date by which the utility proposes to begin construction or complete the acquisition and obtain ownership of the electric generating plant or plants.

     (d) If applicable, the date by which the utility reasonably anticipates completing the construction of the electric generating plant or plants.

     (e) A description of the ancillary utility facilities, if any, necessary to operate or interconnect the electric generating plant or plants.

     (f) The performance and reliability standards to which the electric generating plant or plants will be subject and a statement of how those standards compare to standards that the utility has mandated from other electric generating plants with which the utility has executed power purchase agreements.

Ê The emissions reduction and capacity replacement plan of the utility may include a request for approval to construct or acquire ancillary utility facilities necessary for the operation or interconnection of an electric generating plant or plants identified in this subsection.

     5. If, pursuant to paragraph (d) of subsection 2 of NRS 704.7316, the emissions reduction and capacity replacement plan of an electric utility that primarily serves densely populated counties includes the construction or acquisition of one or more natural gas-fired electric generating plants as replacement capacity for the retirement or elimination of coal-fired electric generating capacity, the emissions reduction and capacity replacement plan of the utility must provide for a strategy for procuring fixed-price physical gas. The strategy must:

     (a) Include an estimate of the costs to ratepayers and a cost benefit analysis.

     (b) Identify the risks associated with the uncertainty of natural gas pricing.

     (c) Minimize price volatility.

     (d) Maximize the reliability of the supply of natural gas.

     6. With respect to the plan for tracking and specifying the accounting treatment for all costs associated with the decommissioning of the coal-fired electric generating plants identified for retirement or elimination which must be provided for in the emissions reduction and capacity replacement plan of an electric utility that primarily serves densely populated counties pursuant to paragraph (e) of subsection 2 of NRS 704.7316, the emissions reduction and capacity replacement plan of the utility must:

     (a) Include a plan for tracking and specifying the accounting treatment of all costs:

          (1) Associated with the retirement and decommissioning of the coal-fired electric generating units identified for retirement or elimination under the emissions reduction and capacity replacement plan.

          (2) Of remediating the land upon which each coal-fired electric generating unit that the utility proposes to retire or eliminate is located.

     (b) Provide:

          (1) That the utility transfer any undepreciated amount or net book value of each coal-fired electric generating unit retired or eliminated pursuant to an approved emissions reduction and capacity replacement plan to a regulatory asset or liability account.

          (2) That until a regulatory asset or liability has been processed in a general rate case and is included in the utility’s revenue requirement, the utility must amortize the regulatory asset balance, or add to the regulatory liability balance, using the depreciation rates which are included in general rates at the time each unit is retired or eliminated.

          (3) For the accumulation of all decommissioning and remediation costs associated with each coal-fired electric generating unit retired or eliminated pursuant to an approved emissions reduction and capacity replacement plan in a separate regulatory asset or liability account.

          (4) For applying a carrying charge equal to the currently approved AFUDC rate only on the decommissioning and remediation costs in the regulatory asset or liability account.

          (5) For salvage and any other appropriate offsets.

     7. In addition to the information required to be included in the emissions reduction and capacity replacement plan of an electric utility that primarily serves densely populated counties pursuant to subsections 1 to 6, inclusive, the emissions reduction and capacity replacement plan of the utility must include:

     (a) A schedule of the information described in NAC 704.945 that specifically identifies the amount of planning capacity required to replace the capacity of coal-fired electric generating units that are retired or eliminated under the emissions reduction and capacity replacement plan and the time at which the utility plans to add such capacity.

     (b) An analysis of all applicable provisions of NAC 704.9005 to 704.9525, inclusive, and, for each alternative plan presented, an analysis of:

          (1) The net economic benefit to this State based upon the factors set forth in NAC 704.9357.

          (2) The opportunity provided by the alternative plan for the creation of new jobs in this State, including, without limitation, direct and indirect job creation and the retention of permanent jobs.

          (3) The cost of the alternative plan to customers, including, without limitation, the average annual impact on rates.

          (4) The value of the alternative plan to customers, including, without limitation, the benefit and the usefulness of the alternative to customers.

     (c) A descriptive assessment of how each alternative plan might impact employment in this State through increases or decreases in electric rates, which must explain the development of, and document and justify, the descriptive assessment. The descriptive assessment must include the results, if any, of a survey of the utility’s 20 largest customers, as described in the utility’s most recent FERC Form 556, concerning how increases or decreases in electric rates resulting from each alternative plan could impact the customer’s ability to retain and create jobs in this State.

     (d) A narrative explaining the selection of the emissions reduction and capacity replacement plan based upon the relative benefits demonstrated in the analyses required by paragraph (b) and the assessment required by paragraph (c).

     8. In addition to the information required by subsections 1 to 7, inclusive, an electric utility that primarily serves densely populated counties shall propose, as part of its initial emissions reduction and capacity replacement plan, a request for proposals process that will be used to provide for a comparative analysis of the alternatives available for the 550 megawatts of electric generating capacity to be constructed or acquired and owned by the utility pursuant to paragraph (c) of subsection 2 of NRS 704.7316. At a minimum, the request for proposals process must provide:

     (a) A timeline for the issuance of requests for proposals and the evaluations of proposals.

     (b) A clear definition of the product or products sought in the request for proposals process.

     (c) Evaluation criteria, including, without limitation, bidder and resource criteria that is consistent with the considerations to be assessed pursuant to subsection 8 of NRS 704.746.

Ê The utility may recover the just and reasonable costs associated with the utilization of the request for proposals process proposed pursuant to this subsection. The utility shall include the results of the request for proposals process in future emissions reduction and capacity replacement plans and any amendments to an emissions reduction and capacity replacement plan to support the utility’s selection of replacement resources as part of the 550 megawatts of electric generating capacity to be constructed or acquired and owned by the utility pursuant to paragraph (c) of subsection 2 of NRS 704.7316.

     (Added to NAC by Pub. Utilities Comm’n by R131-13, eff. 3-28-2014)