Portfolio Standard

      NRS 704.7801  Definitions.  As used in NRS 704.7801 to 704.7828, inclusive, unless the context otherwise requires, the words and terms defined in NRS 704.7802 to 704.7819, inclusive, have the meanings ascribed to them in those sections.

      (Added to NRS by 2001, 2526; A 2003, 806, 1874; 2005, 22nd Special Session, 82)

      NRS 704.7802  Energy efficiency measure” defined.

      1.  “Energy efficiency measure” means any measure designed, intended or used to improve energy efficiency:

      (a) If:

             (1) The measure is installed on or after January 1, 2005, at the service location of a retail customer of a provider of electric service in this State;

             (2) The measure reduces the consumption of energy by the retail customer; and

          (3) The costs of the acquisition or installation of the measure are directly reimbursed, in whole or in part, by the provider of electric service, or by a customer of a provider of new electric resources pursuant to chapter 704B of NRS; or

      (b) Which is a geothermal energy system for the provision of heated water to one or more customers and which reduces the consumption of electricity or any fossil fuel, regardless of when constructed.

      2.  The term does not include any demand response measure or load limiting measure that shifts the consumption of energy by a retail customer from one period to another period.

      (Added to NRS by 2005, 22nd Special Session, 80; A 2007, 413, 2986)

      NRS 704.7803  Portfolio energy credit” defined.  “Portfolio energy credit” means any credit which a provider has earned from a portfolio energy system or efficiency measure and which the provider is entitled to use to comply with its portfolio standard, as determined by the Commission.

      (Added to NRS by 2005, 22nd Special Session, 80)

      NRS 704.7804  Portfolio energy system or efficiency measure” defined.  “Portfolio energy system or efficiency measure” means:

      1.  Any renewable energy system; or

      2.  Any energy efficiency measure.

      (Added to NRS by 2005, 22nd Special Session, 80)

      NRS 704.7805  Portfolio standard” defined.  “Portfolio standard” means the amount of electricity that a provider must generate, acquire or save from portfolio energy systems or efficiency measures, as established by the Commission pursuant to NRS 704.7821.

      (Added to NRS by 2001, 2527; A 2003, 1875; 2005, 22nd Special Session, 82)

      NRS 704.7808  Provider of electric service” and “provider” defined.

      1.  “Provider of electric service” and “provider” mean any person or entity that is in the business of selling electricity to retail customers for consumption in this State, regardless of whether the person or entity is otherwise subject to regulation by the Commission.

      2.  The term includes, without limitation, a provider of new electric resources that is selling electricity to an eligible customer for consumption in this State pursuant to the provisions of chapter 704B of NRS.

      3.  The term does not include:

      (a) This State or an agency or instrumentality of this State.

      (b) A rural electric cooperative established pursuant to chapter 81 of NRS.

      (c) A general improvement district established pursuant to chapter 318 of NRS.

      (d) A utility established pursuant to chapter 709 or 710 of NRS.

      (e) A cooperative association, nonprofit corporation, nonprofit association or provider of electric service which is declared to be a public utility pursuant to NRS 704.673 and which provides service only to its members.

      (f) A landlord of a mobile home park or owner of a company town who is subject to any of the provisions of NRS 704.905 to 704.960, inclusive.

      (g) A landlord who pays for electricity that is delivered through a master meter and who distributes or resells the electricity to one or more tenants for consumption in this State.

      (Added to NRS by 2001, 2527; A 2001, 3273)

      NRS 704.7809  Qualified energy recovery process” defined.

      1.  “Qualified energy recovery process” means a system with a nameplate capacity of not more than 15 megawatts that converts the otherwise lost energy from:

      (a) The heat from exhaust stacks or pipes used for engines or manufacturing or industrial processes; or

      (b) The reduction of high pressure in water or gas pipelines before the distribution of the water or gas,

Ê to generate electricity if the system does not use additional fossil fuel or require a combustion process to generate such electricity.

      2.  The term does not include any system that uses energy, lost or otherwise, from a process whose primary purpose is the generation of electricity, including, without limitation, any process involving engine-driven generation or pumped hydrogeneration.

      (Added to NRS by 2003, 1874)

      NRS 704.7811  Renewable energy” defined.

      1.  “Renewable energy” means:

      (a) Biomass;

      (b) Geothermal energy;

      (c) Solar energy;

      (d) Waterpower; and

      (e) Wind.

      2.  The term does not include coal, natural gas, oil, propane or any other fossil fuel, or nuclear energy.

      3.  As used in this section, “waterpower” means power derived from standing, running or falling water which is used for any plant, facility, equipment or system to generate electricity if the generating capacity of the plant, facility, equipment or system is not more than 30 megawatts. Except as otherwise provided in this subsection, the term includes, without limitation, power derived from water that has been pumped from a lower to a higher elevation if the generating capacity of the plant, facility, equipment or system for which the water is used is not more than 30 megawatts. The term does not include power:

      (a) Derived from water stored in a reservoir by a dam or similar device, unless:

             (1) The water is used exclusively for irrigation;

             (2) The dam or similar device was in existence on January 1, 2003; and

             (3) The generating capacity of the plant, facility, equipment or system for which the water is used is not more than 30 megawatts;

      (b) That requires a new or increased appropriation or diversion of water for its creation; or

      (c) That requires the use of any fossil fuel for its creation, unless:

             (1) The primary purpose of the use of the fossil fuel is not the creation of the power; and

             (2) The generating capacity of the plant, facility, equipment or system for which the water is used is not more than 30 megawatts.

      (Added to NRS by 2001, 2527; A 2003, 1875)

      NRS 704.7815  Renewable energy system” defined.  “Renewable energy system” means:

      1.  A facility or energy system that:

      (a) Uses renewable energy or energy from a qualified energy recovery process to generate electricity; and

      (b) Transmits or distributes the electricity that it generates from renewable energy or energy from a qualified energy recovery process via:

             (1) A power line which is dedicated to the transmission or distribution of electricity generated from renewable energy or energy from a qualified energy recovery process and which is connected to a facility or system owned, operated or controlled by a provider of electric service; or

             (2) A power line which is shared with not more than one facility or energy system generating electricity from nonrenewable energy and which is connected to a facility or system owned, operated or controlled by a provider of electric service.

      2.  A solar energy system that reduces the consumption of electricity or any fossil fuel.

      3.  A net metering system used by a customer-generator pursuant to NRS 704.766 to 704.775, inclusive.

      (Added to NRS by 2001, 2527; A 2001, 3274; 2003, 1866, 1875; 2005, 22nd Special Session, 82)

      NRS 704.7818  Retail customer” defined.

      1.  “Retail customer” means an end-use customer that purchases electricity for consumption in this state.

      2.  The term includes, without limitation:

      (a) This state, a political subdivision of this state or an agency or instrumentality of this state or political subdivision of this state when it is an end-use customer that purchases electricity for consumption in this state, including, without limitation, when it is an eligible customer that purchases electricity for consumption in this state from a provider of new electric resources pursuant to the provisions of chapter 704B of NRS.

      (b) A residential, commercial or industrial end-use customer that purchases electricity for consumption in this state, including, without limitation, an eligible customer that purchases electricity for consumption in this state from a provider of new electric resources pursuant to the provisions of chapter 704B of NRS.

      (c) A landlord of a mobile home park or owner of a company town who is subject to any of the provisions of NRS 704.905 to 704.960, inclusive.

      (d) A landlord who pays for electricity that is delivered through a master meter and who distributes or resells the electricity to one or more tenants for consumption in this state.

      (Added to NRS by 2001, 2527; A 2001, 3274)

      NRS 704.7819  Utility provider” defined.  “Utility provider” means a provider of electric service that is a public utility.

      (Added to NRS by 2005, 22nd Special Session, 80)

      NRS 704.7821  Establishment of portfolio standard; requirements; treatment of certain solar energy systems; portfolio energy credits; renewable energy contracts and energy efficiency contracts; exemptions; regulations.

      1.  For each provider of electric service, the Commission shall establish a portfolio standard. The portfolio standard must require each provider to generate, acquire or save electricity from portfolio energy systems or efficiency measures in an amount that is:

      (a) For calendar years 2005 and 2006, not less than 6 percent of the total amount of electricity sold by the provider to its retail customers in this State during that calendar year.

      (b) For calendar years 2007 and 2008, not less than 9 percent of the total amount of electricity sold by the provider to its retail customers in this State during that calendar year.

      (c) For calendar years 2009 and 2010, not less than 12 percent of the total amount of electricity sold by the provider to its retail customers in this State during that calendar year.

      (d) For calendar years 2011 and 2012, not less than 15 percent of the total amount of electricity sold by the provider to its retail customers in this State during that calendar year.

      (e) For calendar years 2013 and 2014, not less than 18 percent of the total amount of electricity sold by the provider to its retail customers in this State during that calendar year.

      (f) For calendar year 2015 and for each calendar year thereafter, not less than 20 percent of the total amount of electricity sold by the provider to its retail customers in this State during that calendar year.

      2.  Except as otherwise provided in subsection 3, in addition to the requirements set forth in subsection 1, the portfolio standard for each provider must require that:

      (a) Of the total amount of electricity that the provider is required to generate, acquire or save from portfolio energy systems or efficiency measures during each calendar year, not less than 5 percent of that amount must be generated or acquired from solar renewable energy systems.

      (b) Of the total amount of electricity that the provider is required to generate, acquire or save from portfolio energy systems or efficiency measures during each calendar year, not more than 25 percent of that amount may be based on energy efficiency measures. If the provider intends to use energy efficiency measures to comply with its portfolio standard during any calendar year, of the total amount of electricity saved from energy efficiency measures for which the provider seeks to obtain portfolio energy credits pursuant to this paragraph, at least 50 percent of that amount must be saved from energy efficiency measures installed at service locations of residential customers of the provider, unless a different percentage is approved by the Commission.

      (c) If the provider acquires or saves electricity from a portfolio energy system or efficiency measure pursuant to a renewable energy contract or energy efficiency contract with another party:

             (1) The term of the contract must be not less than 10 years, unless the other party agrees to a contract with a shorter term; and

             (2) The terms and conditions of the contract must be just and reasonable, as determined by the Commission. If the provider is a utility provider and the Commission approves the terms and conditions of the contract between the utility provider and the other party, the contract and its terms and conditions shall be deemed to be a prudent investment and the utility provider may recover all just and reasonable costs associated with the contract.

      3.  The provisions of paragraphs (b) and (c) of subsection 2 do not apply to a provider of new electric resources pursuant to chapter 704B of NRS with respect to its use of an energy efficiency measure that is financed by a customer, or which is a geothermal energy system for the provision of heated water to one or more customers and which reduces the consumption of electricity or any fossil fuel, except that, of the total amount of electricity that the provider is required to generate, acquire or save from portfolio energy systems or efficiency measures during each calendar year, not more than 25 percent of that amount may be based on energy efficiency measures.

      4.  If, for the benefit of one or more retail customers in this State, the provider, or the customer of a provider of new electric resources pursuant to chapter 704B of NRS, has paid for or directly reimbursed, in whole or in part, the costs of the acquisition or installation of a solar energy system which qualifies as a renewable energy system and which reduces the consumption of electricity, the total reduction in the consumption of electricity during each calendar year that results from the solar energy system shall be deemed to be electricity that the provider generated or acquired from a renewable energy system for the purposes of complying with its portfolio standard.

      5.  The Commission shall adopt regulations that establish a system of portfolio energy credits that may be used by a provider to comply with its portfolio standard.

      6.  Except as otherwise provided in subsection 7, each provider shall comply with its portfolio standard during each calendar year.

      7.  If, for any calendar year, a provider is unable to comply with its portfolio standard through the generation of electricity from its own renewable energy systems or, if applicable, through the use of portfolio energy credits, the provider shall take actions to acquire or save electricity pursuant to one or more renewable energy contracts or energy efficiency contracts. If the Commission determines that, for a calendar year, there is not or will not be a sufficient supply of electricity or a sufficient amount of energy savings made available to the provider pursuant to renewable energy contracts and energy efficiency contracts with just and reasonable terms and conditions, the Commission shall exempt the provider, for that calendar year, from the remaining requirements of its portfolio standard or from any appropriate portion thereof, as determined by the Commission.

      8.  The Commission shall adopt regulations that establish:

      (a) Standards for the determination of just and reasonable terms and conditions for the renewable energy contracts and energy efficiency contracts that a provider must enter into to comply with its portfolio standard.

      (b) Methods to classify the financial impact of each long-term renewable energy contract and energy efficiency contract as an additional imputed debt of a utility provider. The regulations must allow the utility provider to propose an amount to be added to the cost of the contract, at the time the contract is approved by the Commission, equal to a compensating component in the capital structure of the utility provider. In evaluating any proposal made by a utility provider pursuant to this paragraph, the Commission shall consider the effect that the proposal will have on the rates paid by the retail customers of the utility provider.

      9.  As used in this section:

      (a) “Energy efficiency contract” means a contract to attain energy savings from one or more energy efficiency measures owned, operated or controlled by other parties.

      (b) “Renewable energy contract” means a contract to acquire electricity from one or more renewable energy systems owned, operated or controlled by other parties.

      (c) “Terms and conditions” includes, without limitation, the price that a provider must pay to acquire electricity pursuant to a renewable energy contract or to attain energy savings pursuant to an energy efficiency contract.

      (Added to NRS by 2001, 2528; A 2003, 1866, 1876; 2005, 22nd Special Session, 82; 2007, 414)

      NRS 704.78215  Calculation of portfolio energy credits.

      1.  Except as otherwise provided in this section or by specific statute, a provider is entitled to one portfolio energy credit for each kilowatt-hour of electricity that the provider generates, acquires or saves from a portfolio energy system or efficiency measure.

      2.  The Commission may adopt regulations that give a provider more than one portfolio energy credit for each kilowatt-hour of electricity saved by the provider during its peak load period from energy efficiency measures.

      (Added to NRS by 2005, 22nd Special Session, 80)

      NRS 704.7822  Calculation of electricity generated or acquired from certain solar photovoltaic systems.  For the purpose of complying with a portfolio standard established pursuant to NRS 704.7821, a provider shall be deemed to have generated or acquired 2.4 kilowatt-hours of electricity from a renewable energy system for each 1.0 kilowatt-hour of actual electricity generated or acquired from a solar photovoltaic system, if:

      1.  The system is installed on the premises of a retail customer; and

      2.  On an annual basis, at least 50 percent of the electricity generated by the system is utilized by the retail customer on that premises.

      (Added to NRS by 2003, 805)

      NRS 704.7823  System that draws or creates electricity from tires deemed not to be renewable energy system; exception; calculation of electricity generated or acquired from certain systems that utilize reverse polymerization process.

      1.  Except as otherwise provided in subsection 2, any electricity generated by a provider using any system that involves drawing or creating electricity from tires must be deemed to have not come from a renewable energy system for the purpose of complying with a portfolio standard established pursuant to NRS 704.7821.

      2.  For the purpose of complying with a portfolio standard established pursuant to NRS 704.7821, a provider shall be deemed to have generated or acquired 0.7 kilowatt-hours of electricity from a renewable energy system for each 1.0 kilowatt-hour of actual electricity generated or acquired from a system that utilizes a reverse polymerization process, if:

      (a) The system is installed on the premises of a retail customer; and

      (b) On an annual basis, at least 50 percent of the electricity generated by the system is utilized by the retail customer on that premises.

      3.  As used in this section:

      (a) “Reverse polymerization process” means a process that generates electricity from a tire that:

             (1) Uses microwave reduction; and

             (2) Does not involve combustion of the tire.

      (b) “Tire” includes any tire for any vehicle or device in, upon or by which any person or property is or may be transported or drawn upon land.

      (Added to NRS by 2003, 805)

      NRS 704.7825  Reports.

      1.  Each provider of electric service shall submit to the Commission an annual report that provides information relating to the actions taken by the provider to comply with its portfolio standard.

      2.  Each provider shall submit the annual report to the Commission after the end of each calendar year and within the time prescribed by the Commission. The report must be submitted in a format approved by the Commission.

      3.  The Commission may adopt regulations that require providers to submit to the Commission additional reports during each calendar year.

      4.  Each annual report and each additional report must include clear and concise information that sets forth:

      (a) The amount of electricity which the provider generated, acquired or saved from portfolio energy systems or efficiency measures during the reporting period and, if applicable, the amount of portfolio energy credits that the provider acquired, sold or traded during the reporting period to comply with its portfolio standard;

      (b) The capacity of each renewable energy system owned, operated or controlled by the provider, the total amount of electricity generated by each such system during the reporting period and the percentage of that total amount which was generated directly from renewable energy;

      (c) Whether, during the reporting period, the provider began construction on, acquired or placed into operation any renewable energy system and, if so, the date of any such event;

      (d) Whether, during the reporting period, the provider participated in the acquisition or installation of any energy efficiency measures and, if so, the date of any such event; and

      (e) Any other information that the Commission by regulation may deem relevant.

      5.  Based on the reports submitted by providers pursuant to this section, the Commission shall compile information that sets forth whether any provider has used energy efficiency measures to comply with its portfolio standard and, if so, the type of energy efficiency measures used and the amount of energy savings attributable to each such energy efficiency measure. The Commission shall report such information to:

      (a) The Legislature, not later than the first day of each regular session; and

      (b) The Legislative Commission, if requested by the Chairman of the Commission.

      (Added to NRS by 2001, 2529; A 2005, 22nd Special Session, 85)

      NRS 704.7827  Temporary renewable energy development program.

      1.  The Commission may adopt regulations to establish a temporary renewable energy development program that is designed to assist with the completion of new renewable energy projects.

      2.  The Commission may require a utility provider to participate in a temporary renewable energy development program.

      3.  If the Commission adopts regulations establishing a temporary renewable energy development program, the program may include, without limitation:

      (a) The establishment of a private trust administered by an independent trustee; and

      (b) The payment of money from the private trust to carry out the terms and conditions of renewable energy contracts approved by the Commission between a utility provider and one or more new renewable energy projects.

      4.  If a utility provider is participating in a temporary renewable energy development program, the utility provider may apply to the Commission for authority to close the program to new renewable energy projects if the utility provider has achieved an investment grade credit rating as determined by either Moody’s Investors Service, Inc., or Standard and Poor’s Rating Services and has maintained that credit rating for 24 consecutive months.

      5.  The Commission may grant an application to close a temporary renewable energy development program only after finding that the creditworthiness of the utility provider is sufficiently restored so that closure of the program to new renewable energy projects is in the public interest.

      6.  An order issued by the Commission closing a temporary renewable energy development program to new renewable energy projects is not effective as to any new renewable energy project which has previously been accepted into the program and which is receiving money from a private trust established under the program until the earlier of:

      (a) The expiration or termination of the original renewable energy contract approved by the Commission between the utility provider and the new renewable energy project; or

      (b) The original financing, including debt, equity, or both debt and equity, as applicable, entered into by the new renewable energy project upon completion of construction of the project has been fully satisfied pursuant to its original terms.

      7.  As used in this section, “new renewable energy project” means a project to construct a renewable energy system if:

      (a) The project is associated with one or more renewable energy contracts approved by the Commission pursuant to NRS 704.7821; and

      (b) Construction on the project commenced on or after July 1, 2001.

      (Added to NRS by 2005, 22nd Special Session, 81)

      NRS 704.7828  Regulations; enforcement; administrative fines.

      1.  The Commission shall adopt regulations to carry out and enforce the provisions of NRS 704.7801 to 704.7828, inclusive. The regulations adopted by the Commission may include any enforcement mechanisms which are necessary and reasonable to ensure that each provider of electric service complies with its portfolio standard. Such enforcement mechanisms may include, without limitation, the imposition of administrative fines.

      2.  If a provider does not comply with its portfolio standard for any calendar year and the Commission has not exempted the provider from the requirements of its portfolio standard pursuant to NRS 704.7821, the Commission may impose an administrative fine against the provider or take other administrative action against the provider, or do both.

      3.  The Commission may impose an administrative fine against a provider based upon:

      (a) Each kilowatt-hour of electricity that the provider does not generate, acquire or save from portfolio energy systems or efficiency measures during a calendar year in violation of its portfolio standard; or

      (b) Any other reasonable formula adopted by the Commission.

      4.  In the aggregate, the administrative fines imposed against a provider for all violations of its portfolio standard for a single calendar year must not exceed the amount which is necessary and reasonable to ensure that the provider complies with its portfolio standard, as determined by the Commission.

      5.  If the Commission imposes an administrative fine against a utility provider:

      (a) The administrative fine is not a cost of service of the utility provider;

      (b) The utility provider shall not include any portion of the administrative fine in any application for a rate adjustment or rate increase; and

      (c) The Commission shall not allow the utility provider to recover any portion of the administrative fine from its retail customers.

      6.  All administrative fines imposed and collected pursuant to this section must be deposited in the State General Fund.

      (Added to NRS by 2001, 2530; A 2005, 22nd Special Session, 85)