A Verification and Clarification on Reno’s Resiliency Initiatives

Matthew Egan, advised by Dr. Mohammed Ben-Idris

Abstract

Many municipal governments wish to power themselves with more renewable energy, whether to combat
climate change or as a cost effective alternative in their market. This paper will summarize the methods these
governments use to accomplish this. Accomplishing these objectives will help to not only improve the sustainability
of a government, but also drive the local economy and advance movement away from fossil fuels. The strategies to
accomplish these goals include Renewable Energy Certificates, net and smart metering, Community Solar Gardens
and various other methods. Each method has costs and benefits, each of which varies depending on the attitudes
of larger surrounding institutions. This research is done in collaboration with multiple local groups, including NV
Energy and UNR staff. Research will include an analysis of current regulations in the state of Nevada that may help
or hinder renewable growth, as well as the current progress of the City of Reno toward divesting themselves from
unsustainable practices in energy. Keywords—Renewables, Municipal, Community

1 Nomenclature

• CoR – City of Reno
• CSG – Community Solar Garden
• DER – Distributed Energy Resources
• IOU – Investor Owned Utility
• NGR – Nevada Green Rider
• NRS – Nevada Revised Statute
• NSB – Nevada Senate Bill
• NVE – NV Energy
• PUCN – Public Utilities Commission of Nevada
• REC – Renewable Energy Certificates
• RPS – Renewable Portfolio Standard
• RIAPS – Resilient Information Architecture Platform
for the Smart Grid

∗Author: Matthew Egan.

2 Introduction

Climate Change is a clear and present threat to all humanity. This is especially true for those living in the CoR, who is one of the fastest warming cities in the country [18]. If humanity is to avoid the worst effects of this danger, then governments at all levels should contribute to alleviating the present crisis. The CoR can, should, and is doing their part to improve their energy mix through a combination of self-owned generation, PPA agreements, and energy saving initiatives, but it can always do more with improved data. Many other cities face similar challenges. The majority of this paper will focus on the Nevadan state of affairs, and Reno in particular. In Nevada, there is a large institutional support for renewables, especially solar energy, both within the state government and the largest Investor Owned Utility, NV Energy [10]. This gives municipalities there a large number of options for growing their renewable portfolio. This paper analyzes Reno’s potential for renewable growth, states various policies that help make a municipality operate more sustainably, and provides policy suggestions. The work presented here is part of undergraduate research support provided by the CoR. The rest of the paper is organized as follows. Section III explains how Reno is situated with the most relevant regulations, as well as what they are currently doing to meet their goals. Section IV explains various methods that any municipality can use to increase their renewable penetration. Section VI states what potential impacts having more renewable energy would have on the grid. Section must generate 28 percent of its energy through renewable VII states what a municipality can or should do when in resources, assuming it receives its energy from a supplier an area with friendly, unfriendly, or mixed institutions who is doing the bare minimum to comply with energy towards renewable growth. Section VIII provides clos- standards, more on that later. Thankfully, this is a lower ing remarks, acknowledges significant contributors to the bound, and the main electric utility for the state, NV paper’s funding and information, and future directions. Energy, is highly committed to encouraging the growth of renewable energy.

3 Energy Sustainability

The CoR is doing their part to ensure the success of renewable energy. The CoR’s Reno Resiliency plan lays out nine initiatives for a more sustainable city [16]. Among other goals, the city wanted to be powered by 50 percent renewable energy by the end of 2020, which it met, have fully renewable power by 2025, and reduce its energy usage by 20 percent compared to its usage figures in 2014, also by 2025. These figures are based around peak load, or the highest amount of energy a group uses over the course of a day, rather than around net load, or the ability to be powered fully renewably, or at least offset the energy consumed at night with solar panels during the day. Both of these figures would require a significantly higher investment into either energy storage or renewables with much higher nameplate generation, i.e. the amount of power manufacturers state a device can generate under ideal conditions, as they are situated in an area where the primary method of renewable energy generation is based around solar, which is highly intermittent, but has its highest time of production roughly coinciding with peak load time. National regulations on renewable energy will not be covered in this paper. As such, this paper shall cover regulations and programs from the PUCN, NV Energy, and the CoR. There are many specific references to legal codes for Nevada, but the programs mentioned are fairly common, so researchers in other states should still find this a useful reference [17]. A. Renewable Portfolio Standard

An RPS is a set percentage that electrical producers in a state are either encouraged or required to produce with either renewable or carbon neutral energy. Fig. 1 shows a map of all states with an RPS, with the referenced website having precise figures for each state [17]. An RPS can serve as a barometer for how likely a government is to assist in the growth of renewable energy. States with high or frequently amended RPS standards can be more easily lobbied for policies shown below than those without an RPS or with low RPS goals. The State of Nevada has an RPS which states that, according to NRS 704.7821.1.(g), “For calendar year 2020, not less than 22 percent of the total amount of electricity sold by the provider to its retail customers in this State during that calendar year [must be produced with renewable energy].” This means in order for the CoR to meet its required goal in its own measures, it Fig. 1:

Fig. 1: A map of states and territories in the United States referencing whether they have an RPS [3]

B. Utility Initiatives

In the 2016 and 2018 Nevada ballots, question 3 passed and failed to pass respectively. Question 3 was an initiative, mostly led by smaller generators such as Solar City, to amend the Nevada constitution to “[prohibit] the granting of monopolies and exclusive franchises for the generation of electricity” [8]. Due to the failure of question 3, NV Energy is still the only provider of energy in Washoe County and the majority of the state. NV Energy has a few goals as of this moment, including a commitment to being very environmentally conscious in its energy production. NV Energy has consistently met and exceeded the state’s RPS standards, reaching 5 percent above the current requirements of 27 percent as of last year [15]. The relevant question for this paper will not be whether or not NV Energy continues this trend, but by how much. Table 1 shows what percentage the CoR must produce or purchase, considering potential behaviors of NV Energy by 2025. As stated previously, NV Energy is likely to exceed the goals of the Nevadan RPS. The bottom row uses the given formula for calculations:

This formula is fairly simplistic. All it says is that the amount that someone needs to generate or purchase renewable is equal to the amount that they want minus the amount that their utility, in this equation NV Energy,generates. Then, this is divided by 100 percent minus the same utility figure. The amount that NV Energy made in the year 2019 can be found publicly on the PUCN website, and was already mentioned in their RPS compliance report. [15]

Fig. 2: This table shows data on Reno’s Renewable Generating Capacity.

Fig. 3: This table shows data on Possible Levels of NV Energy Renewable Generation CorrelatedWith How Much
Energy Reno Must Use Renewably.

Table II lays out four potential scenarios, in order of the amount of renewable power generated by a utility and thereby the amount a municipality must save or produce itself. The first assumes NV Energy will make the minimal possible progress and only comply with minimum RPS standards, which is at 34 percent per Senate Bill 358 [10]. The assumptions are that NV Energy exceeds PUCN standards by: nothing, four percent, 3 years, or 2 tiers of the Nevadan RPS regulations, meaning they will be making 34 percent, 38 percent, 42 percent, or 50 percent respectively. The safest assumption would be to follow the median and say by 2025, NV Energy will be providing Reno with at least 40 percent renewable energy. Forty percent is also what NV Energy themselves assume, according to their 2019 RPS Compliance Report [15].

C. Current Local Initiatives

The CoR has a number of existing renewable power sources across the city, creating in total 81.8 gigawatthours over the course of a month, though billing periods varied from early to mid-January to February 2020, shown in Table I, aggregated for the sake of brevity and privacy. The CoR has not installed a significant amount of new solar in the past few years, and only has one major installation planned at 911 Kietzke Lane for their new police station. [5] Noting this lack of new developments, the CoR will need to reach its goal through more outside measures, such as the ones listed below. Most of the gains made will likely come from saving energy, thereby lowering the amount they need from the utility’s fossil fuels, rather than producing new energy.

4 What Can Be Done

Each section has a table after it indicating the pros and cons of a given solution. None are perfect, but some may be more beneficial than others.

A. Net metering

Net Metering is the process by which people or entities who produce an excess of energy are allowed to sell that energy back to utilities at a rate lower than the retail cost [7]. This allows consumers to become producers, which helps them financially justify installing larger amounts of renewable energy than if they only saved money from not paying a utility. The CoR can apply for this program under current PUCN regulations, thereby reducing the time until a solar panel would break even, in a program similar to designs laid out in [1]. The sooner a city implements a net metering application for new installations, the better the results will be. Table IV demonstrates how much power the State of Nevada has registered which utilizes the net metering programs. It is split into four tiers, with tiers 1 through 3 each being limited to 80 MW of installed solar capacity. This is an arbitrary figure, but it encourages people to install renewable energy sooner rather than later, as they would receive a greater financial benefit from their installations than if they had waited and been limited to lower amounts. Tiers 1 and 2, which grant 95 percent and 88 percent of the retail price of energy respectively, are both no longer available for applications, and Tier 3, which grants 81 percent of energy, is already 90 percent full, assuming all pending net metering applications are accepted. These figures accurately display that the total net metering capacity is closing fast. Therefore, the CoR should state their intentions to invest further in solar energy sooner rather than later so they can reap greater rewards from net metering, and thereby receive greater economic benefit from having PV solar installed.

B. Meter aggregation

Meter aggregation is a subset of net metering, wherein entities who own multiple meters that consume energy, and multiple meters that generate energy can combine these two in a way “…that allows for a single generating system to be used to offset electricity use on multiple meters, without necessarily requiring a physical connection between the system and those meters” [2]. This mainly differs from net metering because net metering can only give credit to the producer for the point that it is being generated at. This means that net metering can only give a financial benefit if the place that uses this electricity already uses a fair amount, which is often in places where space is at a premium, such as downtown areas. Any renewable energy generated by the CoR could be sold on the market for other users, therefore allowing for places with low energy usage, but high solar potential, such as parks, or places with high energy usage, but low solar potential, such as City Hall, to better take advantage of these disparities. If NV Energy and the PUCN could negotiate an arrangement with the CoR, that could lower costs by installing generation on cheaper land or in places which are closer to the grid’s substations. Meter aggregation would thereby make the process of transitioning to green energy more cost effective.

Fig. 4: This table shows a pros and cons list of net metering.
Fig. 5: This table shows the current net metering capacity in Nevada.
Fig. 6: This table shows a pros and cons list of meter aggregation.

C. Exiting the Utility Grid

To become powered only by renewables, the CoR must receive no power from non-renewable resources. Even receiving one percent of power from a natural gas plant would mean non-compliance with the Reno Resilience measures. Therefore, without RECs to offset the power received from the utility, it is mathematically impossible for the CoR to be powered solely by renewable energy unless the grid is also 100 percent renewable, or it has met all its energy needs through renewables. If those two things cannot be met, the CoR may wish to exit the grid and find another provider of power who could make up the difference in energy they still lack. Please note this should only be done with a clear and distinct plan to find power. NV Energy is extremely committed to renewable energy, and likely will stay as such for the immediate future, not counting some extreme change in company policy. The city may also need to pay an additional stipend to NV Energy if they exit. Casinos such as Wynn, Caesar’s Palace, and MGM had to pay a fee in order to exit because of the loss of revenue NV Energy would receive. [12] [13] [14] Reno, or any municipality, as a customer of similar size, could face similar sanctions if a utility felt the dependability of Reno and the bulk purchases they provide would be a significant enough loss by their departure. Unless it would be deemed demonstrably easier and cheaper than staying and paying more for RECs, and NV Energy is either unable or unwilling to provide the COR with the energy it needs, they should not leave.

Fig. 7: This table shows a pros and cons list of exiting the utility grid.

D. Community Solar Gardens

Community solar is the establishment of PV solar generation systems that users can subscribe to which will provide them with RECs of no greater than 40 percent of the total amount produced, and limited to 12 megawatts per parcel. [10] [11] If the CoR wanted to, it could contract with an outside third party to install solar panels on their properties, not dissimilar to the current installations. However, as individuals can only take 40 percent of the total power generated, the city would receive smaller direct benefit. [11] This could be an advantage, as it would give a larger indirect benefit to Reno citizens through a combination of education initiatives and subscriptions. A Community Solar Garden would especially help those who lack the capability to install solar systems on their own property, such as renters or low income individuals who, while environmentally minded, may lack the capital to install their own generation [11] . Renters would benefit as it would mean that an entire apartment complex could install and receive energy from a single installation, and lower income people could also cite all their energy from a single source. These people could help to ease the cost for the city, as well as increase local benefit and buy-in to Reno Resilience programs. This may make it more popular, as laid out in a UK study on such community initiatives which shows that if an initiative is labelled as community based, it is more successful if it has a noticeably positive impact on their lives [20]. If the CoR did something like this, either by contracting to build on their land through PPA or under their own authority, it would benefit many people, as well as the city themselves. Low-income people would gain access to solar renewables, the city could build solar panels off site of high-energy demand places and bear a smaller financial burden, and the grid in general would benefit from having more renewable energy. The following section will have more details on the general impacts and benefits of renewables, especially distributed, on the community at large.

Fig. 8: This table shows a pros and cons list of CSGs

E. Renewable Energy Credits

The City of Reno can make its power usage more environmentally conscious through RECs. RECs are ways for anyone to purchase renewable energy from their utility, in this case NV Energy, to state the energy purchased was offset with a certain amount of renewable power [12]. Using RECs for renewable energy has its advantages. For one thing, the simplicity of RECs can be very appealing, and it can be done with no additional infrastructure construction on the City of Reno’s land. The main disadvantages of REC usage is it remains centralized, so it would have higher losses during transmission, and without a concrete example it may be less politically popular, as observers would be skeptical of how well backed the RECs are if they are not fully aware of the system’s intricacies. As of this moment, NV Energy has the NGR program as its best method for encouraging renewable growth [14]. This program was utilized by the City of Las Vegas to meet their needs 100 percent four years ago in 2016 [13]. Pricing is not listed specifically on the document as it is dependent upon the cost of constructing and maintaining the necessary facilities to power an applicant. Many companies and municipalities have contracted NV Energy to meet their energy demands, receiving 558,258,153 kWh in Northern Nevada last year [15]. As of this paper’s writing NGR is closed to new applicants. It may be more or less expensive than typical grid rates. However, given the continuously falling cost of Solar across the state, it would not be unreasonable to say the City could save more money using RECs than having their own on-site facilities. However, the best avenues for REC purchase are not open as of this moment, and RECs lack the benefits can be found in more decentralized methods of power generation. Therefore, until programs such as the NGR become available, the City should continue with its progress on its own terms, and be vigilant for when it opens again to better utilize the resources available to them.

Fig. 9: This table shows a pros and cons list of RECs.

5 Policy Suggestions

Policy suggestions for this are broken up into three sections, based around the surrounding institutions. In the state of Nevada, and in most states, there are two entities a planner should concern themselves with: the Utility, who makes the power, and the Public Utility Commission, who say how the power can be made through regulations. In many states, these two entities frequently collaborate, though there is the potential for disagreement between them. One may also be concerned with fellow members of a city government, but it is likely that if one is considering a resiliency plan that they would already fall into the supportive category. A city can do some things on their own, such as install solar installations or establish a utility, but most of these plans would be made far easier with the support of other groups.

A. Supportive Entities

The best course of action as of this moment for the CoR, and for other areas whose states firmly believe in growing renewable energy, weighing the various pros and cons, would be to invest more in and lobby more for community solar gardens so that lower income people can benefit from renewables and Reno can install solar energy in areas where it would be cheaper to build and maintain. Reno can also invest in energy saving and wait until NV Energy enters into an agreement with the City of Reno to provide the rest of its energy needs through RECs with the benefits of bulk solar facilities. Doing this will provide the benefits from distributed energy for Reno while also lowering NV Energy’s obligation to meet the rest of their needs, thereby reducing their construction cost and time. This suggestion follows for any other local government situated in a region whose government or power company is not only capable of assisting, but has already implemented the infrastructure to create these changes, whether through financial incentives or through more traditional Commandand- Control styled regulations.

B. Antagonistic Entities

Some local governments will be in areas where the utility has a very low amount of renewable penetration, or in states where the government is openly hostile towards renewable energy. This will happen in areas such as West Virginia or Louisiana, who have high economic dependence on fossil fuels. For a municipality in these areas, options may be more limited, or they will have to do more of their own work than other states. The best options for these groups are to find the most cost effective solutions. Many states have more financial incentives for energy savings, so it will be in the best interest of a local government to focus on those. Exiting may be a more valid strategy in these antagonistic areas if a municipality can find a smaller producer who could nonetheless meet their own energy needs, or become that entity if the state’s PUC will allow it. This would undoubtedly be a more costly measure in the short term, but the long term extern. Also, these local governments should group with other local governments, such as the U.S. Climate Alliance. This way, they can buy equipment or power generators at bulk prices that benefit from economies of scale, thereby reducing the capital requirements to meet a given goal.

C. Mixed or Neutral Entities

There are certain places where one group may be supportive of increasing renewable penetration, but another may not. This can be in areas with a strong utility monopoly that has many coal fired power plants, but is in a highly liberal state, like Maryland, or in a conservative state that nonetheless may have a high amount of renewable resources, like Texas. When a utility is unhelpful, but a state government is cooperative, going off the grid will be a far more valid strategy, as a municipality can gain loans to reduce the cost of making their own power, or can find greater support for establishing CSGs with the government. In states that have supportive utilities but unfriendly state governments, investing in RECs with those entities will be easier for a local government. Utilities will be able to provide reduced prices than what the local government could gain if they were to make the energy themselves. They may not have access to other policies such as meter aggregation or CSGs, but would have access to reduced rates for energy efficiency, and may be able to provide special agreements if negotiated well. Overall, the best policy suggestion regardless of the attitudes of surrounding institutions would be to work with other local governments to achieve these goals, and to reference for various ways local governments have achieved renewable energy growth when faced with a neutral, if not openly antagonistic, federal government [4]. Adopting the measures in can also help make a city more sustainable, but may require some adjustments for local climate to account for what sources may work better, what amount of energy can be saved, etc [16]. Even if larger entities are supportive of this change, these will make the transition easier and help to build connections to make other kinds of change easier going forward.

6 Impacts

The impacts of the CoR’s plan from an environmental impact are clear. Using less power and sourcing more from renewable methods of generation means fewer greenhouse gases. Any strategy that employs decentralized power, such as CSG net metering, would have several advantages. One impact would occur inevitably as Nevada uses more solar power, the most economical source of renewable generation for the state, because solar energy is an intermittent source. This means it cannot generate power when needed, so power must either be used or stored instantly. This creates a phenomenon known as the “Duck Curve” wherein the daily demand on the power grid is bent by solar energy, making a steep increase at the end of the day, which means non-intermittent sources such as natural gas must ramp up to meet demand. This is undeniably a disadvantage of solar energyThis can be addressed through on site energy storage, or through better management of energy [4]. Renewable energy would greatly benefit the CoR, both the government itself and those within its jurisdiction. It would improve air quality, grid stability, and help ensure those in the future would be able to live in a better world.’

7 Conclusion

The CoR as of this moment is doing well to meet its renewable energy goals. It has reduced its carbon footprint by using PPAs, net metering, and various energy saving initiatives. As of this moment, though the author lacks direct accounting, it is safe to say the city will meet the initial goal of being powered at 50 percent by renewable energy resources by the end of the year. This is commendable and should be congratulated. However, it is clear that in order to meet its desired goal of being 100 percent renewable within the next five years as planned, it will have to take numerous additional measures. Further research will delve into methods for the CoR to increase the reliability and stability of the renewable holdings it has. It will also research the Resilient Information Architecture Platform for the Smart Grid, or RIAPS for short, which is an open source software and hardware system that allows groups to utilize smaller devices on-site that can help to distribute resources quickly and efficiently. If it takes the measures in this paper, being aware of the pros and cons, it should be possible.

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