Question 6 in the coming election asks whether Nevada’s Constitution shall be amended to require that, beginning in 2022, all Nevada sellers of retail electricity increase the amount of “renewable” energy resources they use so that at least 50 percent of their electricity comes from those resources by 2030.
We have long supported increasing diversity in energy supplies via economic development of renewables. But the mandates proposed by Question 6 are a big mistake and we strongly counsel voting against it.
Over 40 years ago, Ron wrote a masters thesis assessing the economics and performance issues for the full range of electric generating technologies, from nuclear, coal, oil and gas to solar, geothermal, wind, cogeneration and other alternatives. Subsequently, he testified numerous times as an expert witness in various states in favor of both general renewables policies and specific technologies and projects.
He testified on these matters as a staff witness at the California Energy and Public Utilities Commissions, for public agencies and other commissions, environmental and public-interest intervenors, renewable developers and utilities across the country and even in Hawaii. He also observed critically the progress and development of the renewables industry and the experience with it around the country and internationally.
So, why no on Question 6?
First, this is exactly the kind of matter that does not belong in any government constitution. It is a highly technical matter for which the underlying economics and other factors are subject to unexpected great change that undermines the case for a particular technology.
Government constitutions are best and most effective when they address mainly the structural and procedural basics of government and the fundamental rights and protections of individuals. The American constitution is the best functioning and most ideal model precisely because it is the shortest and is confined to those basic matters.
If this measure is enshrined in Nevada’s constitution, due to the amendment process, it would take at least six years to correct any flaw we subsequently find that needs fixing. Meantime, we’d be stuck with it.
A particular example from energy economics is instructive here. About 1980, natural gas became so expensive in world markets that it was being mostly abandoned by electric utilities for electricity generation. Much government policy treated it as too valuable as a chemical feedstock to be used as an energy source of any kind.
By the mid-1990s, there was a glut of gas, and prices collapsed. In the last decade, its prices have again plummeted due to new producing technologies that were unforeseen, and it has become the fuel of choice.
Policies adopted 40 years ago to discourage using natural gas for energy supply and set prices for renewable technologies have cost consumers large amounts. This is a classic example of the inability of policy makers to anticipate important future developments and the overreach and hubris of much planning and policy. Question 6 may be a bigger disaster for Nevada.
Another problem is that “renewable energy sources” are not even defined in the proposed constitutional amendment. While the measure’s proponents have an idea of what they mean by the term, it is very likely to lead to extensive and wasteful litigation.
The proposed measure would require Nevada’s legislature to pass legislation implementing its constitutional intent. But there are no standards to determine what legislative measures would be necessary, appropriate and sufficient. In short, it is really a bonanza for lawyers to litigate.
Further, the legislature’s fiscal analysts confess they cannot say how this measure would be implemented, nor what implementation would cost the state or consumers. Legislators lack the expertise and focus to decide such matters, so they will be subject to undue influence by lobbyist and their big business clients. That’s the reason public utility commissions were invented and embraced by almost all states to handle such matters.
Experience in other states is generally not very helpful in predicting the effects in another state, because the important facts vary greatly from one situation to another. With one exception: Broad, bold policies are most likely to lead to economic disasters, while careful consideration of specific projects and technologies as they are proposed are least likely to do so.
So, no on 6.