Open electricity markets

Open Electricity Markets

”Open” Markets = fair, competitive, deregulated, or choice markets. Avoid “Enrons” by insuring lots of competition.
A city or county chooses default suppliers. Individuals and businesses can opt-out directly to the market

The Nevada Legislature to Minimize Regulations on the Energy Market and Eliminate Legal Energy Monopolies Amendment, also known as Question 3, was on the November 8, 2016, ballot in Nevada as an initiated constitutional amendment. It was approved with over 72% of the vote

A “yes” vote supported this constitutional amendment to require the Nevada Legislature to establish “an open, competitive retail electric energy market,” reduce energy market regulations, and prohibit energy monopolies (WON WITH OVER 72%)
A “no” vote opposed this constitutional amendment to require the legislature to establish an “open and competitive” retail energy market.[1]

In Nevada, initiated constitutional amendments need to be approved in two even-numbered election years, meaning that Question 3 needed to be approved in 2016 and again in 2018 to amend the Nevada Constitution.

Currently, utility companies in Nevada are permitted to establish monopolies in their geographic service areas. The Nevada Public Utilities Commission, whose members are appointed by the Nevada Governor, regulates utility prices and other energy policies. This model of regulated and state-imposed monopolies originally was established to incentivize electrical infrastructure development. In 2016, NV Energy controlled 90 percent of the state’s energy market.

Initiative design

The measure was designed to prohibit electricity monopolies, thus ending the monopoly that NV Energy has in the state.[2][3] The measure would place a guarantee in the Nevada Constitution that energy customers have the right to choose their energy provider and generate their own for resale. If Question 3 is approved again, the Nevada Legislature would be required to pass laws by July 1, 2023, establishing an “open, competitive retail electric energy market” and entitling customers to “safe, reliable, and competitively priced electricity.” The measure would allow the legislature to permit NV Energy or another firm to maintain a monopoly on the electricity distribution grid, such as transmission lines.[4][5]

State of the ballot measure campaigns

Nevadans for Affordable Clean, Energy Choices, the support campaign, raised $3,435,000 as of November 17, 2016. The Las Vegas Sands Corporation was the top donor, contributing $1,925,000. Opponents organized as the No Handouts to Billionaires Committee, which received $910,000.00 from IBEW 1245 and the Nevada AFL-CIO. Other supporters of Question 3 included Tesla Motors and U.S. Senate Minority Leader Harry Reid (D). Polls indicated that around 68 percent of likely voters supported Question 3 prior to the election.

Text of measure

Ballot title  The question on the ballot was as follows:[6]

Shall Article 1 of the Nevada Constitution be amended to require the Legislature to provide by law for the establishment of an open, competitive retail electric energy market that prohibits the granting of monopolies and exclusive franchises for the generation of electricity?Yes  No  [7]

Ballot summary

The ballot summary was as follows:[6]

EXPLANATION—This ballot measure proposes to amend the Nevada Constitution to require the Legislature to provide by law for an open, competitive retail electric energy market by July 1, 2023. The law passed by the legislature must include, but is not limited to, provisions that reduce costs to customers, protect against service disconnections and unfair practices, and prohibit the granting of monopolies and exclusive franchises for the generation of electricity. The law would not have to provide for the deregulation of the transmission or distribution of electricity.Approval of this ballot measure would add a new section to the Nevada Constitution establishing that every person, business, association of persons or businesses, state agency, political subdivision of the State of Nevada, or any other entity in Nevada has the right to choose the provider of its electric utility service, including but not limited to, selecting providers from a competitive retail electric market, or by producing electricity for themselves or in association with others, and shall not be forced to purchase energy from one provider. The proposed amendment does not create an open and competitive retail electric market, but rather requires the Legislature to provide by law for such a market by July 1, 2023. The law passed by the Legislature cannot limit a person’s or entity’s right to sell, trade, or otherwise dispose of electricity. Pursuant to Article 19, Section 2, of the Nevada Constitution, approval of this question is required at two consecutive general elections before taking effect.

A “Yes” vote would amend Article 1 of the Nevada Constitution so that the Legislature would be required to pass a law by July 1, 2023, that creates an open and competitive retail electric market and that includes provisions to reduce costs to customers, protect against service disconnections and unfair practices, and prohibit the granting of monopolies and exclusive franchises for the generation of electricity.

A “No” vote would retain the provisions of Article 1 of the Nevada Constitution in their current form. These current provisions do not require the Legislature to pass a law that creates an open and competitive retail electric market and that includes provisions to reduce costs to customers, protect against service disconnections and unfair practices, and prohibit the granting of monopolies and exclusive franchises for the generation of electricity.

DIGEST—Article 1 of the Nevada Constitution contains various rights granted to the people of Nevada. Approval of this ballot measure would add a new section to Article 1 of the Nevada Constitution that would require the Legislature to provide by law, no later than July 1, 2023, for an open, competitive retail electric energy market with protections that entitle customers to safe, reliable, and competitively priced electricity. The law passed by the legislature must include, but is not limited to, provisions that reduce costs to customers, protect against service disconnections and unfair practices, and prohibit the granting of monopolies and exclusive franchises for the generation of electricity. This constitutional amendment would have an impact on public revenue; however, the amount of the impact cannot be determined.

Existing law, found in Title 58 of the Nevada Revised Statutes, generally authorizes a single utility to provide electric service to customers in each electric service territory in the state. This means that most Nevadans are required to purchase electricity from a single provider. Utility providers are regulated by the Nevada Public Utilities Commission (PUC), which is charged with providing for the safe, economic, efficient, prudent, and reliable operation and service of public utilities, as well as balancing the interests of customers and shareholders of public utilities by providing public utilities with the opportunity to earn a fair return on their investments while providing customers with just and reasonable rates.[7]

Constitutional changes

See also: Article I, Nevada Constitution

Question 3 would add a new section to Article I of the Nevada Constitution. The following text would be added:[4]

1. Declaration of Policy:

The people of the State of Nevada declare that it is the policy of this State that electricity markets be open and competitive so that all electricity customers are afforded meaningful choices among different providers, and that economic and regulatory burdens be minimized in order to promote competition and choices in the electric energy market. This Act shall be liberally construed to achieve this purpose.

2. Rights of Electric Energy

Effective upon the dates set forth in subsection 3, every person, business, association of persons or businesses, state agency, political subdivision of the State of Nevada, or any other entity in Nevada has the right to choose the provider of its electric utility service, including hut not limited to, selecting providers from a competitive retail electric market, or by producing electricity for themselves or in association with others, and shall not be forced to purchase energy from one provider. Nothing herein shall be construed as limiting such persons’ or entities’ rights to sell, trade or otherwise dispose of electricity.

3. Implementation

(a) Not later than July 1, 2023, the Legislature shall provide by law for provisions consistent with this Act to establish an open, competitive retail electric energy market, to ensure that protections are established that entitle customers to safe, reliable, and competitively priced electricity, including, but nor limited to, provisions that reduce costs to customers, protect against service disconnections and unfair practices, and prohibit the grant of monopolies and exclusive franchises for the generation of electricity. The Legislature need not provide for the deregulation of or distribution of electricity in Order to establish a competitive market consistent with this Act.

(b) Upon enactment of any law by the Legislature pursuant to this Act before July 1, 2023, and not later than that date, any laws, regulations, regulatory orders or other provisions which conflict with this Act will be void. However, the Legislature may enact legislation consistent with this act that provides for an open electric energy market in part or in whole before July I, 2023.

(c) Nothing herein shall be construed to invalidate Nevada ‘s public policies on renewable energy, energy efficiency and environmental protection or limit the Legislature’s ability to impose such policies on participants in a competitive electricity market.

4. Severability

Should any part of this Act he declared invalid, or the application thereof to any person, thing or is held invalid, such invalidity shall not affect the remaining provisions or application of this Act which can be given effect without the invalid provision or application, and to this end the provisions of this Act are declared to be severable. This subsection shall be construed broadly to preserve and effectuate the declared purpose of this Act.[7]