Lombardo seeks ‘balanced approach’ to natural gas, renewables in pivot from Sisolak plan

27 March 2023

Breaking with his Democratic predecessor and drawing criticism from environmental groups, Republican Gov. Joe Lombardo released an executive order Monday embracing natural gas as part of the state’s energy mix and calling for a review of a statewide strategy to fight climate change.

The executive order, signed last week, appeared to signal a major policy shift for the state in targeting a central goal outlined in the Nevada Climate Strategy. That plan called for an orderly transition away from fossil fuels, including natural gas, to reach a statutory goal of net-zero greenhouse gas emissions by 2050. 

That climate plan, developed by Democratic Gov. Steve Sisolak’s administration, recommended similar carbon reduction strategies used in states across the country, as global economies seek to transition from fossil fuels. But it faced criticism and skepticism from natural gas utilities and business interests. 

Lombardo’s order said the Nevada Climate Strategy will be “reviewed and revised, as applicable through a broad-based stakeholder effort, to reflect” the new policy direction. 

Since at least last week, the strategy — a comprehensive document inventorying climate science and addressing the impacts of climate change across economic sectors — had been taken offline. Instead of being publicly available, a password has been required to access the website

Links from other agency websites, including the Governor’s Office of Economic Development, still feature the Nevada Climate Strategy and direct the public to the password-protected site (the Governor’s Office of Economic Development has listed climate change as a “real threat”). 

Elizabeth Ray, the communications director for Lombardo, said Monday that taking the plan offline was a “temporary measure,” and the website is “under construction” as the state revises the strategy. 

Lombardo’s order calls for a “balanced approach” to power, specifying that Nevada’s energy portfolio should draw upon renewable sources — solar, wind, geothermal and hydropower — as well as fossil fuels, such as natural gas, to power electric plants and for use in buildings. The portfolio, according to Lombardo’s directive, could also include hydrogen and energy storage. 

The order, for instance, advocates for building more transmission to specifically benefit projects that could export renewable energy resources including solar, wind and geothermal. At the same time, the executive order does not advocate for a transition away from natural gas, especially in new home and business development — a policy that was highlighted in the Nevada Climate Strategy.

Instead, it directs state government to focus on “developing and maintaining a robust, diverse energy supply portfolio and a balanced approach to electric and natural gas energy supply and transportation fuels that emphasizes affordability and reliability for consumers.”

It further says homes and businesses should have “diverse energy options available to them,” including a choice between electric and natural gas service — a change from the original climate strategy, which had suggested a transition toward electric appliances.

Clean energy advocates have supported an approach, outlined in the climate strategy, to move toward a more decarbonized electric grid that could support an overall transition toward electric vehicles and electric appliances, including for stoves and heat pumps. Building more natural gas infrastructure, they argue, will lock in fossil fuel investments and leave ratepayers on the hook.

On Monday, the Nevada Conservation League sharply criticized Lombardo’s executive order, calling it a step back in the state’s goals to reduce greenhouse gas emissions and encourage clean energy jobs, saying it would “prove to be costly by creating expensive new projects that enrich utilities like Southwest Gas and NV Energy while driving up costs for Nevada families.”

In a statement on Monday, Jermareon Williams, the Nevada government affairs manager at Western Resource Advocates, said the conservation group was pleased by language calling for “continued development of renewable energy resources and transmission infrastructure,” in the executive order. But he added that “expanding the state’s natural gas system would only keep Nevadans reliant on an expensive and polluting energy source from beyond our borders.”

The order reflects a change of administration in Carson City and also the political influence of Southwest Gas, a Las Vegas-based utility vocally critical of elements within the climate strategy. In 2021, Southwest Gas beat back legislation that sought to move away from natural gas in homes and businesses. 

Last month, Lombardo appointed Dwayne McClinton, who worked as a senior legislative policy analyst for Southwest Gas, to lead his energy office. McClinton said in a statement Monday that Lombardo’s executive order would “provide a critical framework for the future of energy in Nevada.”

In other states, utilities such as Southwest Gas have lobbied state lawmakers to preempt local governments from moving to ban the use of natural gas in building construction. Southwest Gas has argued such bans would be costly, deprive consumers of choice and ignore other options, including the use of hydrogen.

But clean energy advocates, including businesses focused on reducing their carbon footprint, have argued that increasing the state’s reliance on gas plants — or expanding gas pipelines to serve new areas — would make it harder for Nevada to meet its statutory 2050 net-zero emissions goal. 

Angelyn Tabalba, a spokesperson for the conservation league, which hosted a lobbying day in Carson City Monday, said the order’s support for gas is “the wrong direction for Nevada,” adding that the executive order’s timing was “particularly disappointing and demonstrates that our state is not fully committed to reducing climate pollution and transitioning to a clean energy economy.” 

Lombardo’s order sets another benchmark: increase energy supply within Nevada’s borders, as the Western grid and state energy officials are exploring a more regionalized energy system. 

In 2021, the Legislature passed a wide-ranging energy bill, SB448, which directs utilities to join a regional transmission market by 2030. Unlike in other parts of the country, the Western electric grid remains largely siloed off with individual utilities operating in specific areas and often competing to buy power on the open market, something that can expose utility customers to uncertainty and risk. 

More regional collaboration would potentially allow utilities to pool resources, drive energy costs down, address uncertainty around the market rules and work more efficiently, supporters argue. Lombardo’s order said the state will continue to explore options for joining an organized market “when such a market furthers Nevada’s objects of reliability, affordability and sustainability.”

Increased temperatures, driven by climate change, have placed strain on the regional grid in the hot summer months when customer demands spike (as businesses and homes crank up their air conditioning) and utilities scramble to buy more electricity on the open market. In addition, prolonged droughts have made valuable hydropower supplies less reliable. These are among the reasons utility regulators recently approved NV Energy’s request to build a new gas plant.

NV Energy and staff of the Public Utilities Commission argued that the natural gas project was the most feasible and reliable option to fill in supply gaps. They noted that the plant would only run for a limited amount of time (when demand peaked) and that NV Energy still must comply with renewable standards — statutes that require utilities to deploy more clean energy sources.

Yet clean energy activists and tech giant Google were skeptical of NV Energy’s plan to fall back on natural gas to fill supply gaps when demand peaks in the summer. They criticized the roughly $350 million gas plant project, which could operate for decades. The utility should have explored more carbon-free options and further analyzed the impact of a regional market, they argued.

Building additional fossil fuel infrastructure, clean energy groups have argued, could leave utility ratepayers increasingly reliant on paying investments for a system most economies are working to move away from. These are known as “stranded costs.” In addition, they argue that volatility in gas prices, especially in recent months, has left customers more exposed to price spikes. 

But building new renewable infrastructure has faced significant obstacles. Although dozens of projects have been proposed in Nevada, many of these projects have conflicted with existing land uses and other priorities, including the conservation of important wildlife habitat. Last year, Nye County, for instance, placed a six-month moratorium on new solar applications. In addition, global supply chain challenges have caused delays in bringing new renewable projects online. 

Lombardo’s directive also seeks to cut regulations and streamline permitting “while providing for appropriate environmental and cultural resource reviews.” It says that projects should undergo “concurrent” review at the state and local levels. In addition, it says the state will advocate for streamlined review by the federal government, which oversees projects on federal public land.

The executive order is set to expire in 2033.

The post Lombardo seeks ‘balanced approach’ to natural gas, renewables in pivot from Sisolak plan appeared first on The Nevada Independent.

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