Energy Choice Initiative

A Message From General Manager Mendis Cooper

Recently, a number of articles regarding Ballot Question 3, also known as the Energy Choice Initiative (ECI), have appeared in the local newspapers. You may have also noticed increased television advertisements regarding this issue. All of the information can be confusing. In a recent article in the Mesquite Local News Thomas Mitchell predicted that you will be “inundated in the coming months with ’facts and figures’ that are wildly contradictory…”. That day has arrived.

I assume many of you will think I am talking about the Energy Choice Initiative (ECI) because I am fighting for my job. That is not the case. I decided to respond because first of all, I have 31 years of experience in the electric industry and I have met with business leaders, government officials, and the sponsors of the ballot question, and finally, I am an OPD residential customer just like you. I pay the same cost for power that you do. That is why I am concerned and that is why I want to share my thoughts with you.

Why am I concerned? Because the ECI promise of a lower power bill cannot be substantiated. All of the data that I have seen which includes a report from the Public Utilities Commission of Nevada (PUCN), a study by Harvard University, and various studies from other states point out that choice has not lowered power bills. In fact, the PUCN report states that, “Concerns exist that the Energy Choice Initiative will have considerable negative financial impact to the rural communities of Nevada.”

During the PUCN investigatory hearings, the PUCN Commissioner asked repeatedly if any of the proponents in the audience could step forward and state for the record that this initiative would lower bills and he never received a response.

ECI cannot guarantee lower power bills as promised. Consider this, OPD is a non-profit entity with hydro power contracts and a market-based contract. If ECI passes, OPD may lose all existing hydro power contracts and the market-based contract. Those contracts will be replaced with a market-based contract of your choice.

If ECI passes, you will see new items on your power bill, including charges for transmission service, distribution service, and customer related items such a metering. You will also pay a new charge for a wholesale market to provide for generation of electricity, a new charge for the retail market (among other things this charge will be for the regulated website where you can choose your electric provider), you will also see a new charge for government regulation and oversite of the energy market, another new charge for stranded costs that will be incurred in the switch over to ECI, and then you may need to add taxes on top of that because you will be buying retail product.

Does all of this sound confusing and expensive? It is.

So, what about businesses? Will they benefit from the Energy Choice Initiative? Some of the very largest businesses in the state with high consistent usage may see a benefit. For the great majority of businesses, including small business and larger commercial customers, your power bill will be affected in the same way residential customers will be affected. The PUCN report supports this and says that ECI “is reasonably likely to increase the monthly electricity bill across customer classes.”

The average cost of power in Nevada for a residential customer is 12.49 cents per kilo-watt hour (kWh). The average OPD customer pays less than 8 cents per kWh for electricity. Even with the base charge entered into the calculation the average OPD residential customer pays 10.6 cents per kWh or 14% below the Nevada average.

I am not going to tell you how to vote. But before you go to the polls in November, I encourage all of you to carefully study the facts. Please feel free to check the OPD website for data and news regarding this topic. As always, I welcome you to reach out to us. My staff members and I are prepared and willing to answer your questions.

Mendis Cooper
Overton Power District No. 5
General Manager