The 2024 NV Energy Integrated Resource Plan (IRP) proceeding is coming to a close, with a decision expected from the Public Utilities Commission of Nevada (PUCN) by December 20, 2024.

In Nevada, an IRP proceeding is conducted every three years with the goal of ensuring that NV Energy has the resources it needs to reliably and affordably serve Nevada’s electric customers and meet state policy goals. However, NV Energy’s proposed IRP, similar to those preceding it, exemplifies how the IRP process encourages investment in new gas resources, despite the availability of cheaper clean energy resources, such as Nevada’s abundant solar, geothermal, and distributed energy resources increasingly found on Nevadans’ rooftops and driveways. 

Although NV Energy has made progress in increasing its procurement of advanced energy, there is still more potential being left untapped. NV Energy has proposed three new battery and solar projects amounting to about 1000 MW. However, alongside these advanced energy sources, NV Energy has also proposed to build 400 MW of company-owned gas assets, with total project costs amounting to an estimated $573 million. 

While it is true that energy demand in the state is growing and will continue to do so, investing in expensive gas plants and increasing ratepayer exposure to volatile, imported gas costs isn’t the most efficient or cost-effective strategy to meet that demand. NV Energy has the opportunity to leverage existing in-state resources, such as demand-side technologies, to meet the projected demand more affordably and on a faster timeline. Demand-side technologies such as smart thermostats and battery storage, aggregated into Virtual Power Plants (VPPs), could meet a significant portion of the near-term demand, potentially deferring or eliminating the need for costly gas peaker plants. 

So why, if demand-side technologies are cheaper and more easily deployed, has NV Energy consistently opted to invest in gas? In large part, this is likely because it is more profitable for utilities to invest in gas peaker plants than in demand response or demand-side management. Big capital projects allow the utility to earn a better return on investment than demand-side technologies. However, this is not the only obstacle that skews investments toward gas resources. It is also due to the underestimation of the value of demand-side technologies in the IRP. 

The current consideration of distributed energy resources does not model their potential to reduce or meet demand in the same way as gas peaker plants. As a result, gas peaker plants are seen as the most viable option to meet demand.  

In an effort to dissuade the PUCN from approving the unnecessary and expensive proposed gas assets, Advanced Energy United has advocated for more ambitious energy savings and peak demand capacity savings targets, in addition to encouraging a higher budget for investments in demand-side management technologies and more comprehensive modeling to fully capture the potential of distributed energy resources.  

An increase in targets for energy savings and demand capacity savings would provide incentives for investment in demand side management technologies. Higher capacity savings targets would open opportunities for NV Energy to expand existing and successful demand response programs into a full-fledged VPP that leverages existing technologies, like solar+storage systems, EV charging, and smart thermostats. VPPs reduce system-wide costs while empowering customers, putting money back in their pocket for technologies they already own.  

In order to meet more ambitious goals, regulators can recognize the need to re-think traditional demand-side management programs and increase the budget for programs that result in peak demand capacity savings. In redirecting funding, NV Energy’s interests can better align with both business and ratepayer interests, ultimately providing a path away from investing in gas to meeting peak demand through more affordable alternatives. 

Overall, Advanced Energy United hopes that the PUCN will recognize the value of demand-side technologies and clean energy alternatives to gas investments in its final decision. And as the state looks to meet its future energy needs beyond the current IRP, we hope to see the PUCN consider the ways in which the current structure of the IRP isn’t serving Nevadans.