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Power Disruption is on Nevada’s Horizon

When it comes to “disruptors” – new players in a market that totally upend the conventional way of doing business – I’d have to say today’s top three are Uber for what it’s done to the taxi industry, Airbnb for what it’s done to the lodging industry…and Donald Trump for what he’s done to the GOP.

The next major disruptor could hit the power industry.

Despite the Armageddon-like kvetching by the rooftop solar companies about the long overdue end to taxpayer and ratepayer subsidies to their industry, I believe the end of those subsidies will actually spark a growth spurt in rooftop solar.

As it is, as long as someone else is helping to pay for these systems there’s no real incentive for solar companies to lower costs.  Removing their training wheels will help force this budding industry to finally stand on its own, as it should.

That said, the fact remains that one way or the other the solar energy boom will continue to grow.  And that will mean a growing abundance of surplus energy during the day that someone is going to find something to do with.

It would seem that if the proverbial “price is right,” the natural purchasers would be the highly-regulated power companies, such as our own NV Energy.  Especially since it might preclude the necessity for building new generation facilities that will only drive up energy costs for ratepayers.

Speaking of which, greater attention needs to be focused on the government’s “regulatory system that turns corporate accounting on its head” by making it profitable for electric companies to “invest” in unnecessary or inappropriate projects.

Indeed, an April 2015 Wall Street Journal column by Rebecca Smith pointed out that with their profits capped by government regulation, some power companies are spending ratepayers’ money on questionable projects such “electric car charging stations” and “replacing or repairing thousands of power poles” that might not actually need repair or replacement.

Any government regulatory system that incentivizes such decisions cries out for disruption.

A third brewing disruption centers on attempts by big corporations – such as Switch, Wynn Resorts and the Las Vegas Sands in Nevada – to purchase their electricity from sources other than NV Energy.  If/when such big guys are allowed to leave, it’ll only be a matter of time before pressure comes to bear to make such competition available to small and medium sized companies, as well.

NV Energy is trying to forecast how they’ll deal with the coming disruption brought by new competition and these big energy users potentially leaving their grid.  Hopefully as they review their plan with the state they can also forecast a smooth way to keep consumers from bearing the brunt of this disruption and any costly efforts to bridge that gap.