MINUTES OF THE SENATE COMMITTEE ON COMMERCE, LABOR AND ENERGY

SUBCOMMITTEE ON ENERGY

Seventy-ninth Session April 7, 2017

The Subcommittee of the Senate Committee on Commerce, Labor and Energy was called to order by Chair Pat Spearman at 1:08 p.m. on Friday, April 7, 2017, in Room 2144 of the Legislative Building, Carson City, Nevada. The meeting was videoconferenced to Room 4404B of the Grant Sawyer State Office Building, 555 East Washington Avenue, Las Vegas, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file in the Research Library of the Legislative Counsel Bureau. SUBCOMMITTEE MEMBERS PRESENT: Senator Pat Spearman, Chair Senator James A. Settelmeyer SUBCOMMITTEE MEMBERS ABSENT: Senator Patricia Farley (Excused) GUEST LEGISLATORS PRESENT: Senator Moises Denis, Senatorial District No. 2 STAFF MEMBERS PRESENT: Marji Paslov Thomas, Policy Analyst Bryan Fernley, Counsel Christine Miner, Committee Secretary OTHERS PRESENT: Jessica Scott, Regional Manager, Interior West, Vote Solar Justin Wilson, Coalition for Community Solar Access Jessica Ferrato, Solar Energy Industries Association Robert Johnston, Western Resource Advocates Paul Bony, Solar Energy International Anne Macquarie, Toiyabe Chapter, Sierra Club

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 2 Tom Polikalas Ken Evans, The Uplift Foundation of Nevada Andrew Perla Melvin Green, KME Architects Tammie Stockton, Principal, High Desert Montessori Charter School Sami Connolly Jordan Gauntt Ali Jabir Patrina McKinney, Las Vegas Urban League Young Professionals Mary L. House, Mountaintop Faith Ministries Lindsay Toste Kevin McGehee, Nevada Data Mining Kyle Davis, Nevada Conservation League Garrett Weir, Public Utilities Commission of Nevada Reverend Leonard B. Jackson, Associate Minister, First African Methodist

Episcopal Church; Director, Faith Organizing Alliance Jerry Holliday, The Uplift Foundation of Nevada Bertha Robledo David Gibson, Powered by Sunshine Joanne Leovy Rosario Cervantes Lena Paola Hillerie Patton Ernie Adler, International Brotherhood of Electrical Workers Local 1245 Judy Stokey, NV Energy Jesse Murray, Director, Renewable Energy Programs, NV Energy Fred Voltz CHAIR SPEARMAN: I will open the hearing on Senate Bill (S.B.) 392. SENATE BILL 392: Revises provisions relating to energy. (BDR 58-663) SENATOR MOISES DENIS (Senatorial District No. 2): Senate Bill 392 allows for the development of community solar gardens. I was at a solar conference with Hispanic legislators and one of the topics of discussion was the impact energy has on minority communities. My concern is for individuals who may want or need to have access to solar energy.

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 3 Nevada is blessed with numerous sources of renewable energy, including geothermal and solar. We are proud of our history of supporting policies that encourage the development of renewable energy. Included in these policies is the ability of homeowners and businesses to directly participate in the solar economy by placing solar panels on rooftops, connecting with the electric grid and receiving a fair and reasonable credit on their utility bill for the power their panel produces to offset their energy needs. There is a segment of the population that has been excluded from participating in the solar economy. I have heard from many of my constituents who are not able to participate directly in the solar economy for various reasons. Perhaps they are renters or live in condominiums or townhomes with a shared roof, or the home rooftop solar systems are uneconomic, or their roofs are unable to support solar panels. More than 30,000 homeowners have gone to solar energy. There are many whose homes simply do not allow them to share in and benefit from this resource. Community solar gardens provide an opportunity for those who previously could not participate in the solar economy. Community solar gardens are off-site solar systems. Multiple customers participate through subscriptions and receive credits on their electric bills for the energy their solar array provides to the grid. Since other states and the District of Columbia have passed legislation specifically allowing community solar facilities, it is time we do the same in Nevada to expand this great renewable resource to all Nevadans. Senate Bill 392 has another critical component to ensure community solar gardens provide the opportunity for solar access to all Nevadans. Included is a provision whereby the Public Utilities Commission of Nevada (PUCN) is required to allow 10 percent of the program be available for use by low-income customers and low-income service organizations. This provision is critical to expanding access to many of my constituents who are in the low-income category and who are renters seeking the same opportunity as rooftop customers to participate in the solar economy in cost-effective ways. There are many nonprofit organizations who could benefit from having access to clean energy and who wish to do so.

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 4 JESSICA SCOTT (Regional Manager, Interior West, Vote Solar): Vote Solar is a nonprofit organization. Vote Solar works on state-level solar policy throughout the Country. One of our policy priorities is expanding equitable access to solar energy. Community solar is a program which accomplishes this equity goal including the low-income access component. I will explain what community solar is in my presentation (Exhibit C). Community solar is also called shared solar or solar garden. It refers to local solar facilities shared by individual community members receiving credits on their electricity bill for their portion of the power produced. A local solar project allows an individual to become a subscriber. The project is built by a community solar developer and tied to the electric grid. The energy from the project goes to the local utility company. The utility company then credits the subscribers of the energy productions from their shares in the solar project. This structure provides access to renters and businesses who lease its buildings and homes that are shaded or do not have suitable roofs for rooftop solar. Community solar can provide access to local, affordable, and clean energy for all energy customers large and small, most of whom do not have the option today. Only 20 percent of the Nevada market is able to install rooftop solar panels. Community solar is the missing piece in Nevada’s clean energy programs. Community solar has enormous public support, particularly from communities of color and low-income customers. A recent poll conducted by Global Strategy Group found community solar programs enjoy 80 percent support from Latinos, African-Americans and Asian-American Pacific Islanders in Nevada (Exhibit D). Fourteen states and the District of Columbia have enacted community solar programs. The interactive map shown in Exhibit C is from the Website <http://www.sharedrenewables.org>. By clicking on each state, it provides the legislation that state is proposing or has enacted on its renewable programs. In Minnesota, the Shiloh Temple International Ministries in northern Minneapolis has a 202 kilowatt shared solar array which helps lower energy bills for Shiloh Temple and 40 households from their congregation and the broader community. It is a partnership between Minnesota Interfaith Power & Light, the Sierra Club, Cooperative Energy Futures, job training partner Renewable Energy Partners, Inc., and the local congregation. Customers have 2 options for participation, a single upfront payment that delivers 25 years of bill credits or a pay-as-you-go option in which subscribers receive monthly bill credits of higher value than their

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 5 monthly bill payments. Seventy percent of subscribers chose the monthly option. By prioritizing equity and community in every stage of its development, the Shiloh Temple International Ministries garden is connecting the dots between social justice, economic opportunity and climate change. In 2010, Colorado became the first state to pass statewide shared renewables legislation, the Community Solar Gardens Act. This Act includes direction on a number of design elements making shared renewables work for utility companies, developers and consumers. Colorado defines solar gardens as projects between ten kilowatts and two megawatts in size located in or near the same community as the customers being served. These shared solar systems should serve at least ten subscribing customers. The owner of the system can be either the utility company or a third-party operator who contracts with the utility for the solar power production, creating diverse opportunities for market participation. Care was taken to make sure that all of these new megawatts of local solar power add to rather than detract from the state’s other successful clean energy policies like net metering. Community solar garden subscribers in Colorado receive full retail credit for their portion of the power produced, minus a reasonable charge to cover the utility company’s costs of delivering the electricity from the garden to the customer. Similar to net metering, this bill credit can be carried forward if it exceeds the customer’s electricity use in any given billing period. Community solar participants can be residences, churches, businesses, school districts or municipalities. The lowest funded school district in Colorado, Pueblo County School District 70, was able to offset 100 percent of its electricity needs through community solar. It has 1.1 megawatts from nearly 12,000 panels from 2 community solar arrays. It is expecting over $2 million in savings over the life of the program. In Washington, D.C., the Community Renewables Energy Act was enacted in 2013. There is no overall program capacity limit. The system size limit is five megawatts. Participants are compensated at the utility standard service rate for general service low voltage non-demand customers. The low-income component in S.B. 392 is tied to the Renewable Energy Programs created by Nevada Revised Statutes 701B and regulated by the

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 6 PUCN. The programs are administered by NV Energy and funded by NV Energy ratepayers. Senate Bill 392 adds language to include community solar as eligible projects in this program. The bill specifies not more than $2 million per year be allocated to benefit low- and moderate-income customers including homeless shelters, low-income housing developments and public entities serving low-income and moderate-income residents. According to NV Energy’s February 2017 RenewableGenerations Monthly Report, the remaining budget is just over $57 million. Senate Bill 392 is consistent with the guiding principles for these projects across the Country. The principles are to expand renewable energy access to a broader group of energy consumers and to provide tangible economic benefits on customers utility bills. We see an average of 10 percent savings on the energy bills of consumer solar subscribers. The projects should be flexible enough to meet consumers’ preferences and be additive to and supportive of existing renewable energy programs. JUSTIN WILSON (Coalition for Community Solar Access): My presentation will introduce the Coalition for Community Solar Access (CCSA), our membership, our mission and core principles which we use to assess programs across the Country (Exhibit E). The Coalition for Community Solar Access is a business-led trade organization working to expand the community solar market. It formed in 2006 and has been working to build industry expertise and provide education to policy makers and jurisdictions considering community solar programs. Its members represent developers and operators of community solar gardens, solar equipment manufacturers, large construction companies, nonprofit advocates and customers of community solar facilities. One of CCSAs first projects was to develop a set of core principles its members could endorse. It supports policies, programs and practices that allow customers to participate and benefit economically using new resources, not repurposed resources. Its principles include a fair bill crediting mechanism, an opportunity for diverse customer participation, protection of customers over the long term, ensuring full disclosure of risk and benefits and complying with all laws to further reduce customer risk and provide consumer protections. It supports collaboration with utility companies to efficiently move projects from concept to

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 7 interconnection. The Coalition for Community Solar Access wants to keep an eye on the entire industry to ensure it is moving forward in an appropriate manner. Senate Bill 392 applies industry standard definitions and concepts allowing for program development. It establishes a statewide community solar goal and prescribes certain program elements. The bill directs the PUCN to develop rules for other program elements and establish a bill crediting structure. Sections 5 through 10 of S.B. 392 adds definitions and clarifies existing terms. Section 5 identifies two criteria which facilities must meet to be considered a community solar garden. The facility must generate less than 20 megawatts and be owned by a subscriber organization. Section 6 defines a subscriber as a utility customer who must be in the same service territory as the facility. This ensures customers are not crossing between service territory boundaries. For example, a Sierra Pacific customer cannot participate in a solar garden in Nevada Power territory. Section 7 defines the subscriber organization as the entity owning or operating a community solar facility. It allows for a broad range of ownership including for-profit companies, nonprofit companies and utility companies. Section 8 defines subscription as a contract between a subscriber organization and a subscriber. Section 9 defines unsubscribed electricity as the portion of the community solar project that has not been subscribed. It has a value and needs to be accounted for. Section 10 defines a utility as a public utility that supplies electricity in Nevada. Section 11 defines the regulations that must be adopted by the PUCN. Subsection 1, paragraph (a), subparagraphs (1) and (2) establish the goals for the amount of electricity the solar gardens must produce. The bill directs the PUCN to set a goal at 5 percent of statewide peak demand between now and 2023 and directs the Commission to establish a goal for each year thereafter. Subsection 1, paragraph (b) establishes the community of the garden. This is to ensure customers from all sectors can participate. Paragraph (c) allows a subscriber organization some flexibility on how a project is organized and developed. Paragraph (d) is the provision ensuring access and participation from low-income residential customers and low-income service providers. Paragraph (e) ensures the projects are open to all customers. Paragraph (f)

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 8 ensures customers remain in their applicable rate class and are not moved to a different rate class by participating in the solar garden program. CHAIR SPEARMAN: Would you clarify rate class? MR. WILSON: Some customers who have participated in various renewable energy programs have seen their rate classes shift and be put in a new rate class with a different rate structure. This can penalize customers for long-term decisions they have made. Section 11, subsection 1, paragraph (g) allows for a subscription to be transferred to a different premises. Renters can keep their subscriptions and move them from one address to another. It allows subscriptions to be transferred between ratepayers. Subsection 1, paragraph (h) directs the PUCN to establish fees and processes for interconnections. Section 11, subsection 2 ensures the same requirements for any utility wishing to participate in the community solar garden market. Section 12, subsection 1 establishes the bill crediting mechanism for the proportional share attributed to the customer’s subscription. Subsection 2 deals with how the subscriber organization will provide the information necessary to the utility company to implement the bill crediting mechanism. Section 13 deals with unsubscribed energy. It is the energy not attributed to a subscriber but placed onto the electric grid. This provision directs the utility company to submit a plan to the PUCN for approval. Section 14 directs the issuance for the ownership of the production energy credits. Section 15 clarifies the developers of community solar gardens are not considered public utilities. SENATOR SETTELMEYER: When a subscriber moves, does the subscription transfer with the subscriber or with the new homeowner. If it transfers with the home, what happens if the new homeowner does not want to participate in the program? Does the original subscriber need to find a purchaser for the subscription?

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 9 MR. WILSON: There are variations in programs for each state. The subscription is tied to an account number. If the subscription owner were to move to a different district in a state, the subscription could be kept. If a subscriber were to move out of state, he or she can negotiate the sale of their subscription to someone waiting for an opening in the solar garden program. SENATOR SETTELMEYER: Is the 10 percent savings in a person’s energy bill before or after the costs to be a program participant? MR. WILSON: It is the total cost savings including participation and bill savings. SENATOR SETTELMEYER: Regardless of the energy program, be it hydroelectric, wind or solar, are the costs for transmission of energy addressed in the bill? How have other states determined power transmission costs? MR. WILSON: Section 12 of S.B. 392 gives the PUCN the discretion to determine the transmission costs as the rules and regulations are being developed for the solar garden program. The Colorado program has all-in kilowatt hour electricity rates of approximately 9 cents. The Colorado public utilities commission determined the appropriate credit rate for a community solar subscriber to be just over 7 cents per kilowatt hour. This is the retail rate, minus a charge for connecting to the system. It is a consistent charge across all community solar programs in Colorado. SENATOR SETTELMEYER: They would have established a conversion ratio on their net metering. How is the ratio determined for a subscriber to keep a rate class or be transferred into net metering? MR. WILSON: A customer remains in his or her rate class according to the provisions in S.B. 392.

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 10 SENATOR SETTELMEYER: If a person stays in the same rate class, would there be any accountability for the cost of transmission? MR. WILSON: Section 12 could be where that is remedied. If the retail rate is 11 cents per kilowatt hour in southern Nevada, the PUCN could determine the appropriate credit rate for participation in a solar garden to be 9 or 10 cents per kilowatt hour. SENATOR SETTELMEYER: It would have to apply across the entire rate class, not just the individuals participating in the community solar project. JESSICA FERRATO (Solar Energy Industries Association): The Solar Energy Industries Association is a national trade association representing 10,000 members. The Association supports S.B. 392. Community solar gardens are an excellent way to expand access in Nevada for solar energy. The bill will increase access to solar for apartment building or condominium renters, or homes not feasible for solar panels. The Association agrees with the requirement for a percentage of the subscriptions be for low-income Nevadans. ROBERT JOHNSTON (Western Resource Advocates): Western Resource Advocates supports S.B. 392. Nevadans are demanding clean energy choices, and many do not have rooftop solar options available. Community solar gardens are an opportunity for those who want to participate and make an investment in solar energy. PAUL BONY (Solar Energy International): Solar Energy International is a Colorado-based contractor training organization with over 40,000 alumni including many Nevada contractors. Solar Energy International supports S.B. 392. When I worked for Sierra Pacific Power Company in Nevada, I was responsible for turning the electricity off for those who could not pay their electric bills. I concluded that charging individuals for a service they could not afford and turning it off for using it was not a good path. It launched my career in energy efficiency and renewable energy. Community solar delivered through a not-for-profit model can produce electricity for low-income families for 8 cents per kilowatt hour. It is less than the electricity

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 11 rates being charged today. By partnering the nonprofit model with for-profit investors and contractors, there are federal tax credits that will cover 40 percent of the construction costs. After seven years when the tax credits have been harvested, the nonprofit can own a community solar array that produces electricity for 4 cents to 5 cents per kilowatt hour. That array would have a life of another 15 or more years. Nevada assisted 24,000 families at a cost of $16 million in 2014 through the energy assistance program. A mature not-for-profit community solar array, after taxes and depreciation, can deliver solar energy for the same cost per family as the State is subsidizing the energy assistance program. It is based on an average electric bill of $111 per month and electricity at half the retail rate. Nevada has over 100,000 low-income working families to consider for solar programs. I have worked in the utility transmission sector of energy. There are transmission and distribution costs for transferring electricity from the North Valmy Generating Station to a school in Carson City. Kilowatt hours go to the nearest load and need to be consumed as soon as possible. The transmission of kilowatt hours of electricity is longer from Valmy than a rooftop solar unit would be if a solar array was put near the school and also used by local residents. Solar would then reduce transmission costs. SENATOR SETTELMEYER: I agree solar reduces transmission costs, but those costs still exist. When a power pole breaks and needs repair, the costs for repair and upkeep need to be shared. There has to be some associated costs to help pay for repairs. That is what I am trying to determine with transmission costs. Once we have determined fair transmission costs, there are many renewable energy resources we can consider. MR. BONY: Yes, a formula will need to be determined, and it will not affect the economic savings percentage a community solar array can deliver. ANNE MACQUARIE (Toiyabe Chapter, Sierra Club): I will read from my written testimony (Exhibit F).

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 12 TOM POLIKALAS: I am a native Nevadan and resident of Reno and support S.B. 392. I am a renter and support the expansion of the solar industry in the most economical way and one that maximizes local production of energy. I would like the choice to participate in a community solar array. I would like to help establish a community solar array at my son’s elementary school and assist in the establishment of solar arrays in other Reno schools. I lived in Colorado and have seen a local community solar array there. It was a great learning tool for public school and home-schooled children. This program stimulates science, math and other educational opportunities and is motivating for children. Jobs and economic development can be advanced by these solar programs. According to the American Jobs Project, 28,000 jobs are possible through advanced energy technology focusing on solar, batteries and other energy sources. If Nevada could lure a solar panel manufacturer to the State, possibly 3,000 to 4,000 jobs could be available. Policies encouraging the use of photovoltaic are integral to bringing manufacturing to Nevada. Distributed generation increases grid resiliency and national security from threats to our grid by physical assaults and cyberattacks. Recent developments in the Middle East with U.S. cruise missiles hitting military targets in Syria can exacerbate tensions between the U.S. and Russia. The Russians, as highlighted in many news stories, are actively engaged in penetrating the U.S. electrical grid. In December 2015, a power failure plunged the Western Ukraine into complete darkness. It was allegedly caused by a Russian cyberattack. Bringing solar alternatives will help increase our resiliency in these uncertain times. CHAIR SPEARMAN: Mr. Evans, can you respond to Mr. Polikalas regarding the national security. KEN EVANS ( The Uplift Foundation of Nevada): I am a retired U.S. Air Force lieutenant colonel. I have served in Iraq and Afghanistan. Energy power for our bases in those countries is critical. We are unable to stay on an independent grid. Low fuel is an issue and causes great concerns for military bases. Nevada has the potential competitive advantage to develop this industry, create the technology for military applications and improve our national security.

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 13 CHAIR SPEARMAN: My top priority is to be sure we are insulated from potential attacks which concern our national security. We do not think it will happen until it does. ANDREW PERLA: I will read from my written testimony (Exhibit G). I represent a baseline of successful users of solar energy and validate the savings are more than projected. I am more aware of my electric utilization and have saved 50 percent on my electric bill. I support S.B. 392. MR. EVANS: The Uplift Foundation of Nevada supports S.B. 392. The Uplift Foundation has been involved in education, awareness and advocacy for community solar arrays and other forms of renewable energy. It supports economic opportunity for consumers and can touch households that come from neighborhoods traditionally not exposed to or aware of renewable energy options and the benefits it can offer ratepayers. There are economic development opportunities for small businesses to participate in this initiative in various capacities. Some businesses will be in a position to have a competitive advantage. Statistics suggest Nevada has more solar days than many other places in the Country. MELVIN GREEN (KME Architects): KME Architects supports S.B. 392. KME Architects has been working with sustainable designs. It is important to protect our earth for future generations. Our projects include the Rainbow Dreams Academy installation of a solar array system, the historic Westside Grammar School preservation project using solar and Booker Elementary School using solar tubes connected to the grid system for lighting. I have seen the devastation of pollution in China, where I lived for two years. Clean air and renewable energy sources are important for our Country. CHAIR SPEARMAN: I had the opportunity to speak to students from High Desert Montessori Charter School. They have been awarded the U.S. Department of Education’s Green Ribbon Schools designation and have been able to turn their cost savings into additional programs for the school.

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 14 TAMMIE STOCKTON (Principal, High Desert Montessori Charter School): High Desert Montessori Charter School has been in existence for 14 years. It has grown from 40 students to 400 students. It urges all of its students to be participating members of a socially conscious and green community capable of reflection, communication and action. It is proud of its development of the EcoStudents Program. The students create ideas for school expansion projects. A large part of that is sustainability. The school developed a curriculum around the lead parameters for construction. It was adopted by the Washoe County School District and the State. The school’s EcoStudents receive environmental science credit. The school’s 1970s buildings are old. It is consistently working to make them more energy efficient. It installed 300 kilowatts of solar power generation in the past 4 years to bring down energy costs. It has consistent continuing education for teachers. It is recognized as the first Green Ribbon School in Nevada. Some of its fifth graders are visiting the Capitol today for clean energy day. High Desert Montessori has been able to cut its utility bills in half by installing the 300-kilowatt system. It is able to purchase more computers, hire more teachers and bring more resources to the school with the savings it has enjoyed from its energy costs. The school is always looking for ways to improve the old buildings to put resources back into the classroom. SAMI CONNOLLY: I am a student with High Desert Montessori. Our school has cut its utility bills in half with our solar panels. Our students have seen others in our communities who cannot have solar panels on their properties. The community solar allows them to use energy for clean energy. This will bring Nevada to a cleaner State as a leader in clean energy. Working toward the U.S. having clean energy can help with our pollution and help future generations. JORDAN GAUNTT: I am a student at High Desert Montessori School. I want to stress why we need to move to renewable energy. Over the years of our planet being alive, we have slowly been polluting it. We need to stop what we have been doing and grow as a human race. We could wipe out our planet and the animals on our planet. By moving Nevada to a clean energy state, we can influence our Country toward clean energy and eventually the whole world. We can save millions of lives, both humans and animals. As climate change has been growing, our world is

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 15 heating up, and it is affecting wildlife and humans, and fresh water supplies will eventually start depleting. We need to change soon, or we will not have time to change. It is happening now and we need to fix it. We can make a big difference by switching to clean energy. ALI JABIR: I am representing High Desert Montessori School. Senator Settelmeyer mentioned saving $8 in taxes, we pay $6. My rebuttal statement is this is not the final step. Opening the conversation and getting to the next step is a good idea. Any law we make, we can take back. There is a profitable amount in this. There is talk of having competition with California and Maine, who are leading in clean energy. If we can beat those guys in the race, it would be good and we could market it to other countries. I hope the bills will be made better through time for a more profitable and cleaner Nevada. PATRINA MCKINNEY (Las Vegas Urban League Young Professionals): I will read from my written testimony supporting S.B. 392 (Exhibit H). MARY L. HOUSE (Mountaintop Faith Ministries): Mountaintop Faith Ministries supports S.B. 392. We have over 200 solar panels on our rooftop. It would be wonderful to be a community solar subscriber. I support clean and solar energy. It has been my passion since the 1980s. I am happy Nevada is leading the way in clean energy efficiency and community solar paneling. LINDSAY TOSTE: I am a resident of Reno interested in Nevada’s economic development. I am in favor of S.B. 392 because solar technology is a tremendous economic opportunity for Nevada. I am a renter and cannot install solar panels. I find community solar is the most attractive option for me. This legislation is needed to provide me and thousands of other renters in Nevada the choice in energy options. Seventy-two percent of Nevadans voted for energy choice in the last election. Facilitating community solar projects is a way to provide consumers the choice in their energy supply. This bill will increase demand for solar installations in Nevada which will send a strong signal to clean technology industries that Nevada is a good place to do business. Nevada is well positioned and has the resources and potential to be a national and possibly a global leader in the solar industry. Economic growth and diversity will be driven by S.B. 392.

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 16 Such policies create a market in Nevada for renewable technologies that will attract entrepreneurs and manufacturers and subsequently employ hundreds if not thousands of hard-working Nevadans. KEVIN MCGEHEE (Nevada Data Mining): I am a small business owner in Reno and support S.B. 392. It gives most citizens the opportunity to participate in solar energy. Seven out to ten voters in Nevada support clean energy. The citizens of Nevada are giving the Legislature the green light to move forward with boldness and confidence with policies to pursue clean energy. KYLE DAVIS (Nevada Conservation League): The Nevada Conservation League supports S.B. 392. SENATOR SETTELMEYER: The bill does not allow an individual to be shifted to another rate class. They retain the class they are in prior to the installation of said project. I do not see how there is an ability to account for transmission costs other than through the whole rate class, rather than transfer to a different rate class to help pay for the transmission. GARRETT WEIR (Public Utilities Commission of Nevada): Section 12 of S.B. 392 does not provide the discretion to the Commission to assign any additional charges for recovery of fixed costs. It provides for a one-for-one crediting based on kilowatt hour production from the system. It is essentially net metering based on volume of production by the community solar installation. Transmission costs are recovered through the rates all customers pay through residential rates. There would not be an additional charge or mechanism to recover that. The crediting of energy use may result in less collection of fixed costs. SENATOR SETTELMEYER: That is a beginning of an answer to my concerns. SENATOR DENIS: I have a proposed amendment to S.B. 392 (Exhibit I). It adds subsection 3 to section 11 stating, “Annually, each subscriber organization shall file a report with the Commission demonstrating compliance with the provisions established

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 17 in Section 11 of this act”. The PUCN is required to create regulations by the provisions in section 11. Section 12 adds subsection 3 stating,

A subscriber organization shall on a monthly basis and at other reasonable times determined by the commission provide a report demonstrating compliance with the rules developed pursuant to section 11 of this act.

Language is added to section 13, subsection 1:

Compensation for unsubscribed energy must be provided to the subscriber organization at the rate offered for short-term purchases from qualifying facilities as set forth in NAC 704.8711 through NAC 704.87893.

CHAIR SPEARMAN: Does the proposed amendment address Senator Settelmeyer’s concerns about the rate class? SENATOR DENIS: The rate class issue is a power issue across the board. CHAIR SPEARMAN: We are considering S.B. 392 with an eye toward expanding renewable energy in Nevada. This bill addresses solar energy. How does it address geothermal, hydroelectric power, bioenergy or any other resources we have for renewable energy? MR. WEIR: This proposed amendment does not get to the issues of rate class. Section 12 is the area where a future amendment could address those concerns. Another bill, A.B. 270, is a vehicle for discussion on the valuation and treatment of access generation for individual rooftop solar customers. Any amendment addressing consistent treatment for community projects would need to change section 12 of S.B. 392 to mirror the language adopted in A.B. 270 or whatever resolution is reached regarding the valuation of rooftop solar for individual customers. Those discussions should address the fixed costs mentioned by Senator Settelmeyer.

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 18 ASSEMBLY BILL 270: Revises provisions governing net metering. (BDR 58-686) REVEREND LEONARD B. JACKSON (Associate Minister, First African Methodist

Episcopal Church; Director, Faith Organizing Alliance): First African Methodist Episcopal Church and Faith Organizing Alliance support S.B. 392. Opening solar energy to the entire community is equaling the playing field. Often it is assumed people living in elaborate homes and communities are the only ones who can take advantage of solar energy. This bill will encourage new jobs, clean energy and the health industry. It is a social justice issue. JERRY HOLLIDAY (The Uplift Foundation of Nevada): The Uplift Foundation of Nevada supports S.B. 392. Let us put our sunny 110-degree days to work for us. BERTHA ROBLEDO: I support S.B. 392. In Nevada, we have over 300 days of sunshine giving us the opportunity to harness its power. I have had the opportunity to talk to various people in the community, and they are excited about community solar. This bill is a step in the right direction to put Nevada on the map when it comes to clean energy in the community. DAVID GIBSON (Powered by Sunshine): Powered by Sunshine supports S.B. 392. It is an important step forward to making clean energy accessible for all Nevadans. JOANNE LEOVY: I am a physician and a member of the Nevada State Medical Association and Physicians for Social Responsibility. I support S.B. 392 and will read from my written testimony (Exhibit J). ROSARIO CERVANTES: I support S.B. 392 and will read from my written testimony in Spanish (Exhibit K). LENA PAOLA: I will read from my written testimony in support of S.B. 392 (Exhibit L).

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 19 HILLERIE PATTON: I am a resident of North Las Vegas and support S.B. 392. Communities of color are disproportionately affected by fossil fuel burning. I support the opportunity for solar access for everyone. ERNIE ADLER (International Brotherhood of Electrical Workers Local 1245): The International Brotherhood of Electrical Workers Local 1245 is neutral on S.B. 392. Section 15 states “Notwithstanding any other provision of law, a community solar garden, subscriber organization or subscriber is not a public utility and is not subject to regulation by the Commission … .” If the solar gardens are not subject to regulation by the Commission, then the rest of the bill does not apply to a subscriber organization that owns and operates the solar facility. I thought the purpose of the bill was to regulate this industry. Section 15 exempts regulation. SENATOR DENIS: The intent in section 15 is to clarify the community solar programs are not utility companies. BRYAN FERNLEY (Counsel): Section 15 indicates the solar garden will not be regulated by the Commission as a public utility. They will be subject to regulations in section 11 of the bill. MR. ADLER: Should it say that in section 15? MR. FERNLEY: We can look at whether we need to word it differently. The intent seems clear. SENATOR DENIS: The intent is the solar gardens and subscriber organizations will not be regulated as a public utility. CHAIR SPEARMAN: I have letters of support from Sara Birmingham of Solar Energy Industries Association (Exhibit M), Roxann McCoy of NAACP (Exhibit N) and Willandra Whiting (Exhibit O).

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 20 JUDY STOKEY (NV Energy): NV Energy is a proponent of renewable energy in Nevada. Its customers have benefited from the low-cost renewables it has been able to enter into with contracts. NV Energy is in opposition to S.B. 392. JESSE MURRAY (Director, Renewable Energy Programs, NV Energy): I am responsible for administering the solar, wind and water demonstration programs for Nevada Power and Sierra Pacific utility companies. NV Energy is supportive of combining solar, wind and water budgets as outlined in S.B. 392. It supports the development of solar projects to help the low-income population of Nevada. The low-income solar energy pilot program, created in 2013, has just been completed. NV Energy spent $6.5 million to install 2 megawatts of solar projects directly benefiting children, veterans and families in need. It installed 8 projects at Title I schools and 15 nonprofit entities. As part of the requirement for participating in this program, those entities had to commit to applying the bill savings directly towards the programs they provide for low-income populations. The concerns NV Energy has with S.B. 392 revolve around the capacity and the costs of the program. This bill outlines a 5 percent of peak load goal. That equates to 400 megawatts of capacity within the next 5 years. Compared with its current private rooftop solar installations, it has taken 20 years to install 230 megawatts. It almost doubles the capacity in a quarter of the time to install these projects. The cost to install one megawatt is $2 million to $3 million, depending on the location and type of system. The peak load in S.B. 392 equates to $1 billion in costs to install these projects. Another concern is how the fixed costs and grid services the utility companies continue to provide community solar customers would be recovered. It is important to note that a community solar project still utilizes the transmission and distribution systems of utilities to deliver that energy. Senate Bill 392 does not adequately address this issue. The increase in the allocation of the solar, wind and water demonstration programs is up to 75 percent. Public entities have already received $185 million in funding through the solar, wind and water demonstration programs which equates to about 70 percent of all of the funds paid through those programs to customers who ultimately adopted private generation systems. NV Energy looks forward to continuing to work with the bill sponsors to address some of its concerns.

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 21 CHAIR SPEARMAN: How can the bill address some of your cost concerns? MR. MURRAY: Transmission and distribution costs are concerns of NV Energy. A community solar project moves the energy utilizing the transmission and distribution systems. The discussion around the rate classes and the ability for those costs to be recovered by the participants is an important issue that must be addressed. The participating customers in the programs utilize the grid services, maintenance of the grid services and emergency response services that go with providing the services. How do you value that? The bill does not address these concerns for recovering the costs appropriately. FRED VOLTZ: It seems we are doing a fire, aim, ready approach to the subject, as opposed to a ready, aim, fire. More backup information is needed. There is no fiscal note for S.B. 392. It would be prudent to know what the total program implementation costs will be. This includes any customers spending their own funds or any other entities creating community solar, including program disbursements and administrative costs, with a cap on administrative costs. The solar thermal demonstration project for Sierra Pacific territory was approved by the PUCN in January 2017. They had 19 participants out of the 570 targeted over several years. The PUCN allocated $307,000 to the program to try and increase participation, tripling the incentives for residential and doubling them for the commercial nonprofit sector. Over half of the funds are going to administrative costs. The bill should identify the total program costs and what it hopes to accomplish. Assembly Bill 270, regarding net metering, establishes a minimum amount of reimbursement for excess generation. There is no calculation of actual costs to buttress that. Senate Bill 392 has no specific formula for figuring out what that reimbursement will be. The PUCN sent a letter to the Legislative Counsel Bureau in February showing the total impact of solar energy systems incentive programs in the State from 2010 to November 30, 2016. Over $203 million was spent out of $255 million representing almost 80 percent of the total funding from ratepayers. The number of megawatts installed is only 66 percent of the target. There is a mismatch between the dollars appropriated and the

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 22 target. It is hard to say whether this will be resolved by the time funding is complete from the original $255 million. Given the 2010 to 2016 program performance as mentioned, the objective in S.B. 392 to accomplish a 5 percent of the peak NV Energy load cannot be achieved with the $2 million per year allocation for low-income community solar gardens. CHAIR SPEARMAN: We have not yet received a fiscal note on S.B. 392. MS. SCOTT: Community solar provides endless opportunities for churches and nonprofit companies to partner with entities who can benefit from the 40 percent federal tax credit. Community solar provides the framework for which projects can be constructed to meet the needs of the communities. Vote Solar works closely with the NAACP at the national level, and we hosted an energy justice training event in Las Vegas. There is tremendous interest in the energy justice implications for churches participating in community solar projects. CHAIR SPEARMAN: Is it possible to connect the people in Minnesota with parties in support from Las Vegas, including Reverend Jackson? What Senator Denis is proposing in S.B. 392 is equivalent to John F. Kennedy’s speech in which he expressed before the end of the decade, we will be on the moon. We may not be able to get it all done, but I will not accept, “we will look at perfect and make that the enemy of the good.” Since the solar garden model has been done successfully in Minnesota, we can perhaps learn from them. MS. SCOTT: Vote Solar recently awarded Reverend Dr. Ralph Williamson, Pastor, and Reverend Leonard B Jackson, Associate Minister, of the First African Methodist Episcopal Church with solar justice awards. We will consult with them and with the Shiloh community solar members and get best practices from them.

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 23 SENATOR DENIS: This bill is important for our community which brings equity to all and allows individuals and organizations access to clean energy. We will work with interested parties on their concerns. CHAIR SPEARMAN: We will close the hearing on S.B. 392. Anything this Country has ever accomplished was not an easy task. We, as Nevadans, can figure out the energy issue. We may not do it all at once, but we should be able to lay a good foundation this Session. It will rely on all sides working together. My father always said, “Those who do not want to do will find an excuse. Those who want to do will find a way.”

Remainder of page intentionally left blank; signature page to follow.

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 24 CHAIR SPEARMAN: I adjourn this meeting at 2:57 p.m.

RESPECTFULLY SUBMITTED:

Christine Miner, Committee Secretary

APPROVED BY: Senator Pat Spearman, Chair DATE:

Senate Committee on Commerce, Labor and Energy Subcommittee on Energy April 7, 2017 Page 25

EXHIBIT SUMMARY

Bill Exhibit / # of pages Witness / Entity Description

A 1 Agenda

B 6 Attendance Roster

S.B. 392 C 13 Jessica Scott / Vote Solar Presentation

S.B. 392 D 2 Jessica Scott / Vote Solar

Global Strategy Group Survey Findings

S.B. 392 E 9 Justin Wilson / Coalition for Community Solar Access Presentation

S.B. 392 F 1 Anne Macquarie / Toiyabe Chapter, Sierra Club Written Testimony

S.B. 392 G 2 Andrew Perla Written Testimony

S.B. 392 H 1 Patrina McKinney Written Testimony

S.B. 392 I 2 Senator Moises Denis Proposed Amendment

S.B. 392 J 1 Joanne Leovy Written Testimony

S.B. 392 K 1 Rosario Cervantes Written Testimony

S.B. 392 L 1 Lena Paola Written Testimony

S.B. 392 M 1 Senator Pat Spearman Sara Birmingham, Solar Energy Industries Association Letter of Support

S.B. 392 N 1 Senator Pat Spearman Roxann McCoy, NAACP Letter of Support

S.B. 392 O 1 Senator Pat Spearman Willandra Whiting Letter of Support