Security for Utility’s Renewable Energy Interests

Sierra Pacific Resources and its subsidiary Nevada Power should have an easier time meeting Nevada’s Renewable Energy Portfolio Standards (RPS) now that renewable energy projects in the area have some funding insurance from the state.

The Nevada Public Utilities Commission (PUC) approved the Temporary Renewable Energy Development (TRED) program in a 3-0 vote. The program is meant to assist renewable energy development companies with obtaining project financing so they can then partner with the utilities that need to comply with the state’s RPS targets. Companies were hesitant to partner with Nevada Power last year because of the utility’s “impaired credit rating”, according to a press release from the PUC Web site. The rating also made it difficult for developers to secure project financing if they decided to partner with the utility despite the credit rating. It led to a circular situation where none of the parties involved could harness the funding resources that would ensure project development and renewable power generation. “The TRED program is an important step in advancing the development of renewable energy projects in Nevada as well as fulfilling the requirements of the Renewable Portfolio Standard,” said Carl Linvill, PUC Commissioner and presiding officer. TRED was created through a collaborative effort of representatives from the Governor’s Office, renewable energy developers, Sierra Pacific and Nevada Power companies, and the PUC staff. Under the program, a predetermined allocation of funds collected by the state’s electric utilities will be placed in a third party trust that will disburse payments to renewable energy developers for the electricity sold to the utilities. By creating an independent trust, project financiers are guaranteed payments regardless of the financial situation of the utility. The PUC will determine which projects are eligible to participate in the TRED program. In order to be eligible, the developer must show that the impaired credit rating of the utility is impeding his ability to obtain financing. According to a statement from Renewables Program Manager Gary Porter that is posted on the Nevada Power Web site, the company was waiting for PUC approval to complete contracts for 50 MW of solar, and 227 MW of wind and geothermal power. Reporter John G. Edwards for the Review-Journal in Las Vegas identified the projects as Solargenix’s Ely Wind project in the Eldorado Valley, and Earth Power Resources’ geothermal project in Elko County.
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