On Politics: Should Nevadans deregulate electricity? (opinion)
May 29, 2018
Come Nov. 6, Nevadans have to make some important choices. Who's going to be our next governor, senator, congressman and … are we going to deregulate electricity?
Yes, Nevada Question 3 is: "Should we amend the Nevada Constitution and direct the legislature to minimize regulations on the energy market and eliminate legal monopolies?"
We actually voted on this in 2016, remember? Or were you too caught up in the presidential race, legalizing marijuana and approving gun controls? Whether you read it or not it passed 72 percent to 28 percent in 2016. And since it's a proposed constitutional amendment it has to be voted on twice, so it's back again in 2018.
If you didn't pay much attention to Question 3 last time here are the unvarnished facts. Although our history and system of laws encourage free market competition amongst business interests, there has been a long established exception for capital intense industries where economies of scale can be achieved, typically utilities, railroads, municipal services, etc.
In such cases monopolies are permitted subject to pricing oversight by a public utility commission, which reviews rate schedules and expenses to ensure that only a modest and fair profit is returned to shareholders,
Nevada Energy furnishes over 90 percent of electric power in the Silver State to over 1.3 million homeowners and businesses. If your power goes out you can't threaten to go to their competitor because there isn't one. As a matter of fact if your power goes out you can't threaten anything because your phone won't work.
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If approved by voters, Question 3 would authorize the Legislature to adopt laws that would permit and encourage competing power companies to operate in the state (think AT&T, Verizon, Charter, etc. in the formerly monopolistic telephone business). Nevada Energy would likely retain operation of the electrical grid and transmission lines.
The genesis of Question 3 was a move by some large Las Vegas casinos to seek their own electricity providers. MGM Resorts and the Las Vegas Sands Corporation are credited with starting the movement and are joined by Walmart, Switch and Tesla Motors among others.
Public figures supporting Question 3 include Gov. Brian Sandoval (Republican) and former U.S. Senator Harry Reid (Democrat). Opponents now include Nevada Energy. Public figures opposed include Controller Ron Knecht (Republican), state Sen. Pete Goicoechea (Republican), Clark County commissioners Marilyn Kirkpatrick (Democrat) and Bruce Woodbury (Republican). Organizations opposed include the Nevada State AFL-CIO, IBEW 1245 and Culinary Local 226.
When analyzing complicated ballot proposals it's best to follow the money. So far the initiative has been largely bankrolled by the Las Vegas Sands Corporation ($2.35 million), Switch ($1.7 million), the Valley Electric Association ($100,000) and MGM Resorts ($10,000). An opposition group, the Coalition to Defeat Question 3, led by Nevada Energy, has pledged to raise and spend $30 million to defeat the proposal. Between the two sides they'll probably squeeze the cute GEICO gecko commercials right off our screens this fall.
How about us little guys? Has the regulated monopoly system protected consumers?
Comparing residential electric bills won't prove much because usage can vary depending on occupancy, vacations, etc. I just happen to have a highly accurate method for answering that question. I serve as secretary-treasurer for owners of a small cooperative storage building in Incline Village. There is no heat, no hot water, just single light fixtures in each storage unit which are on one-hour timers.
The only year-round constant are exterior lights that come on at sundown. Between 2011 and 2018 the average monthly bill went from $35.66 to $41.34, an annual increase of 2.27 percent, about the same as the consumer price index.
So, deregulate or not? One thing's for sure, we're going to hear a lot about it.
Jim Clark is president of Republican Advocates. He has served on the Washoe County and Nevada State GOP Central committees. He can be reached at firstname.lastname@example.org.
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