Alternative or Performance-Based Ratemaking in Nevada

On June 6, 2019, the PUCN opened Docket 19-06008, as required by Senate Bill 300 (SB 300), to adopt regulations allowing electric utilities to apply for PUCN approval of an alternative ratemaking plan.

An alternative ratemaking plan may include performance-based rates, meaning the rates charged by the utility to its customers would be tied to performance and/or desired outcomes, such as increased renewable energy, lower administrative costs or enhanced customer service.

Why Alternative Ratemaking in Nevada

In passing SB 300, the bill’s sponsor said that alternative ratemaking would position Nevada to create a flexible and nimble regulatory environment necessary to develop a modern, reliable and efficient electrical grid. Electric vehicle charging, distributed generation like solar and rooftop solar, energy storage and integration of large amounts of renewable energy are the future for Nevada, and that future must be embraced by adoption of the bill, according to SB 300’s sponsor.

Minutes from May 9, 2019, Assembly Growth & Infrastructure Committee (PDF)

The PUCN’s Role in Alternative Ratemaking

SB 300 requires the PUCN to determine if and whether alternative ratemaking is right for Nevada based on nine legislatively-established criteria (Section 16(7) of SB 300).

1. Aligns an economically viable utility model with state public policy goals.
2. Provides for just and reasonable rates that are comparable to rates established pursuant to NRS 704.110.
3. Enables the delivery of electric service and options for services and pricing that customers value including, without limitation, the development and the use of renewable resources by customers that prioritize such resources above other factors, including price.
4. Fosters statewide improvements to the economic and operational efficiency of the electrical grid.
5. Furthers the public interest including, without limitation, the promotion of safe, economic, efficient and reliable electric service to all customers of the electric utility.
6. Enhances the resilience and security of the electrical grid while addressing concerns regarding customer privacy.
7. Ensures that customers of an electric utility benefit from lower regulatory administrative costs where appropriate.
8. Facilitates the research and development of innovative electric utility services and options to benefit customers.
9. Balances the interests of customers and shareholders by providing for services that customers want while preserving reasonable shareholder value.

Since opening Docket No. 19-06008, the PUCN has solicited three rounds of stakeholder comments and led four workshops between June 6, 2019 and February 18, 2020. A summary of the process to date in this docket are in Section I of Concept Paper 1, linked below in the Learn More section.

Moving forward, the docket will continue in two phases. The PUCN competitively selected Rocky Mountain Institute and the Regulatory Assistance Project to assist the PUCN in the next phases of this rulemaking docket. 

Learn More

Concept Papers:

1. Goals & Outcomes (PDF)
2. Existing Regulatory Structure (PDF)
3. Applicable Alternative Ratemaking Mechanisms (PDF)
4. Minimum Requirements, Evaluation Criteria and Metrics for Alternative Ratemaking in Nevada and attached Exhibit A

Education slide presentations provided during the early workshop process:

• Overview of Performance-Based Regulation (PDF)
• Multi-Year Rate Plans (PDF)
• Performance Metrics (PDF)
• Decoupling and Revenue Regulation (PDF)
• Establishing Subscription Rates in the Public Interest (PDF)

To view all the information filed in Docket 19-06008, including comments and other party filings, click here. Scroll down to Docket 19-06008 and click the "View" link.