Despite COVID-19 shutting down business as usual, Nevada utilities companies grew over the past year. New customers signed on. New pilot programs started up. New agreements between agencies were entered into. New sources for commodities and renewable resources were found. Disconnects for nonpayment were suspended in response to the pandemic.
“Utilities in Nevada have been very resilient over the past year, and we have continued to see strong growth,” said John Hester, president and CEO, Southwest Gas. The utility has two million customers throughout the west in Arizona, Nevada and California, and in the past year, 37,000 new customers signed on. “A lot of the growth that we’re seeing in Nevada is related to the booming housing industry,” Hester added. The majority of new homes use natural gas.
“We’ve actually kept up with new growth,” said John Entsminger, general manager, Southern Nevada Water Authority/Las Vegas Valley Water District (SNWA/LVVWD). “Going into the pandemic we thought we would see a bit of a decline in new connections and new construction, similar to what we saw during the recession, and that hasn’t really materialized.”
New Sources and Resources
“Ninety percent of our water comes from the Colorado River via Lake Mead, and nothing is really going to change that,” Entsminger said. SNWA is the wholesaler that buys water; LVVWD delivers that water to customers.
But while the source hasn’t changed, availability has. SNWA entered into an agreement with the Metropolitan Water District of Southern California, helping that utility reuse wastewater currently being discharged into the Pacific. In return, SNWA can take more water out of Lake Mead.
In northern Nevada, water is allocated through TROA, the Truckee River Operating Agreement, which allocates water between Nevada and California, Pyramid Lake Paiute Tribe and Truckee Meadows Water Authority (TMWA). A system of upstream reservoirs and high elevation lakes make the area more drought-resistant than most people think.
“This is where Truckee Meadows is really different from other communities because people hear on the news ‘We’re in a drought, we don’t have enough water,’ and that’s where TROA comes into play,” said John Enloe, director of natural resources, TMWA. “Because even if it stopped snowing right now, we’d have enough water in the upstream reservoirs.” TROA dictates when and how much of that water is released into the Truckee River, not just for TMWA itself but for the Truckee-Carson Irrigation District, for Fallon, Fernley and the Pyramid Lake Paiute Tribe.
Enloe added, “There’s going to be sufficient water flows in the river again this year, all because of those upstream reservoirs and the storage they provide.”
However, that doesn’t mean there’s no need for more water. Only so much can be stored in the reservoirs by law; the rest goes downstream to Pyramid Lake. That’s not a bad thing, but it does mean conserving water today doesn’t mean it’s in the reservoir tomorrow.
That’s part of the reason for the new Mt. Rose Water Treatment Plant. The plant is taking water from Whites Creek to augment supplies at Arrowcreek, Montreux and St. James Village communities. That area has relied exclusively on groundwater, causing more pumping than the water table could handle.
The new plant won’t divert all the water out of Whites Creek. Below the diversion, water will be left for wildlife and habitat maintenance. The plan was approved by the State of Nevada and the Department of Wildlife and received a letter of recommendation from the Nature Conservancy.
Sources of natural gas are also expanding. Conventionally, natural gas has come from Wyoming, Canada and the Permian and San Juan Basins.
But new sources of supply include renewable natural gas (RNG): Collecting methane from dairy farms, wastewater treatment plants and landfills then scrubbing and entering the supply into the natural gas pipeline for alternative uses like transportation.
Transportation is responsible for 28.2 percent of greenhouse gas emissions (EPA, Dec. 2020). Using RNG for company fleets like those of Republic Services and Waste Management, allows them to reduce their carbon footprint.
“Natural gas supplies generally produce significantly lower amounts of carbon dioxide than diesel or gasoline,” said Hester. “There’s a lot of interest from fleet operators in RNG so they can further reduce their carbon footprint from an already relatively friendly conventional natural gas perspective, moving to an even greener net zero renewable natural gas supply footprint.”
RTC in Southern Nevada recently executed an agreement with Southwest Gas to introduce RNG supplies so when municipal bus operators are looking to have a net zero carbon footprint in the future. There will be a couple different ways to accomplish it.
Natural gas is the better choice for buses because electric buses are significantly more expensive and don’t have the operating characteristics of a conventional diesel or natural gas bus.
However, integrating electric vehicles into Nevada’s transportation choices is important in reducing carbon emissions. Greater use of electric vehicles requires infrastructure to support it.
“We want to make sure the infrastructure is available to every Nevadan regardless of geographic location or economic position,” said Doug Cannon, president and CEO, NV Energy. The goal is to reduce range anxiety and provide incentives for customers who want to install chargers at their home or business.
Hydrogen is a RNG resource. Already extremely common, it can be generated by performing hydrolysis on water, said Hester, maybe using excess renewable energy electric providers have generated at peak times of day and can’t store. “You can harness that green electric energy to provide green hydrogen, which can be injected into the natural gas distribution system and essentially be a storage vehicle for that renewable electric energy.”
Climate Change
Because most of Southern Nevada’s water comes from the Colorado River, low snowpack in the Rockies for the past two winters is a concern. In response, LVVWD will turn to conservation programs to ensure sufficient water supply. That means enforced restrictions on day of week and time of day water usage.
Climate change’s effect on Rocky Mountains snowpack affects 90 percent of Southern Nevada water systems. “It also affects our local operations,” said Entsminger. “We’re seeing air conditioning units run 30 or 40 days longer than they did even a decade ago. We see increased temperatures having an impact on the amount of water our customers consume. We see the need to shift our work schedules, so we don’t have our field crews out during the hottest periods of the day.”
In northern Nevada, TMWA’s new Water Resource Plan update did a deep dive into climate change scenario planning. Different climate change models predict the effects on water and some models fit the Northern Nevada, Northern California and Lake Tahoe area better than others.
“Basically, we looked at these different climate change models out to the year 2100, really trying to see under what conditions our water supply could have problems,” said Enloe. Since one of the possible scenarios is less snow and more rain, TMWA is working to change restrictions on when water can be released from reservoirs. Currently the Corps of Engineers or Bureau of Reclamation establishes when water can be released.
“Those reservoirs have an old science establishing when you can start releasing water,” said Enloe. “So today you need to basically keep letting water pass through until April 15 before you can start storing water again.” In a bad snowpack year when runoff starts in March rather than April, all that water passes through and goes downstream. So TMWA is drafting a new operating agreement with TROA entities to allow them to adapt to changing climate and store water earlier if necessary.
“It could greatly improve and maintain the water supply conditions in the event that the climate does change and we see more variable hydrology,” said Enloe. Variable is important because the models aren’t consistent. Some point to warmer, wetter winters and others to warmer and drier. The models do agree that more extremes will be seen, demonstrated by 2015—the driest year on record—and 2017, the wettest.
“So, that’s what we keep looking at,” explained Enloe. “How do we manage the community’s water supply under these more variable conditions we can expect in the future?”
Statewide, NV Energy has reduced carbon emissions caused by generating electricity by 50 percent by replacing coal-fired power plants with natural gas-fired plants. The remaining coal-fired plant in Northern Nevada will be retired by 2025.
With most of Nevada’s electric needs met by natural gas-generated energy, NV Energy can focus on bringing in additional renewable energy. “Since 2018 we’ve announced more than 2600 megawatts in 12 different projects across the state,” said Cannon. The carbon-free solar generation projects will have more than 1000 megawatts of battery storage associated with them, allowing the system to use solar power even after sunset.
Energy efficiency also reduces carbon emissions. The kilowatt hour that’s never used never emits carbon. NV Energy offers a variety of energy efficient products and resources for businesses and residents. Tying utility’s rates to efficiency, Public Utilities Commission of Nevada (PUCN) allows Southwest Gas a decoupled rate design. This means that, rather than the utility’s profits being connected to sales of natural gas, the rate of return is aligned with meeting revenue targets and rates are adjusted to meet target revenue rather than relying on selling maximum commodity.
“If we’re able to help reduce customer’s usage, we still are able to recover our costs of service, but we wind up buying less commodity of supplies to help get customers the energy services they want,” said Hester.
Pilot Programs and Partnerships
Water conservation is nothing new to Nevadans. Today, reclamation can be added to conservation efforts.
A new entity, One Water Nevada, a collaboration between cities of Reno and Sparks, Washoe County, TMWA, UNR and Western Regional Water Commission, is studying the best use of water in the region, whether that’s groundwater, wastewater, surface water, or reclaimed.
One project being investigated is the feasibility of using advanced purified water, or A+ water.
“Essentially that’s some very rigorous treatment technologies that treat wastewater to better than drinking water standards to allow us to recharge that water into the groundwater table and bank it for future use,” said Enloe. A recent successful small-scale demonstration treated 10-15 gallons a minute at the RenoStead reclamation facility.
In November, the SNWA board voted to add more than $2 billion in new capital projects to build out over 10 years. “A lot of that is for economic diversification in the southern part of the Las Vegas Valley and along the I-15 corridor, as well as water and wastewater systems to Apex Park,” said Entsminger. The latter is a partial solution for Apex, which has been stalled by infrastructure needs.
SNWA’s Horizon Lateral Project will create a 10-to-12-foot diameter pipeline from treatment facilities at Lake Mead to the I-15 corridor to ensure water capacity accommodating projected growth there.
For natural gas utilities, one study found that, by 2040, there could be enough RNG developed to serve all residential usage in the state. Hester also expects the industry will continue to find ways to develop hydrogen for use as RNG, and for the price to drop the same way solar did over the last 25 years.
“The issues with renewable are reliability and difficulty in storing that energy economically,” said Hester. Cloudy or windless days interrupt solar and winddriven plants and require other sources of energy to meet customer demands.
Natural gas is a good partnership for renewables. That means air conditioners running on July nights after sundown can rely on natural gas powering the electric utilities. In Nevada, 70 percent of electricity is already natural gas generated. Increased usage of natural gas across the country is the number one reason greenhouse gas emissions are down in the U.S.
Southwest Gas recently created a 14-mile transmission line interconnect to deliver service to Mesquite, turbo charging their economic development possibilities. Another recent project is Spring Creek, near Elko, where 5,000 homes can now convert to natural gas.
In January’s “State of the State” speech, Governor Sisolak called on utilities to look at infrastructure needs as opportunities to create jobs, helping Nevada recover from the COVID-19 economic downturn. In turn, NV Energy brought a proposal before PUCN to construct two new transmission line segments to enable future development of renewable energy resources, and create the infrastructure to allow business growth between industrial parks in Southern and Northern Nevada.
“Those two projects together represent more than $2.5 billion of economic development opportunity in Nevada,” said Cannon. The project is expected to take 10 years and create 4,000 jobs.
Keep Going
Utilities have had to adapt during the pandemic, but because operations are critical, they didn’t have the option of shutting down to keep employees safe.
Water treatment plants are manned around the clock, so TMWA kept employees in the same pods to avoid transmission of the virus between crews. Field workers take trucks home and report from there rather than dispatching from the office. “We’ve had zero workplace transmissions of COVID at TMWA in the last year,” Enloe said.
“Like a lot of industries, we’ve got a substantial part of our workforce working remotely, but there are jobs at water utilities that can’t be done remotely,” said Entsminger. “You can’t fix a main break over a Zoom call. You have to have people out there, on the backhoe, and make sure you can get the pipe patched.”
Modifications put in place mean one person per vehicle, increased sanitization of tools, and personal protective equipment in place, including gloves, especially when crews enter customers’ homes.
“If you’re going to be a new customer of a natural gas service, we have to come to your home,” said Hester. The utility needs to check appliances for safe operations before initializing service. The response to the safety protocols has been phenomenal and there’s been very limited issuances of COVID-19 being spread in the workplace, said Hester.
Going Forward
From a perspective of rates, increases or decreases that customers can expect to see in 2021 differs by utility.
SNWA customers will see an increase in 2022 on commodity and infrastructure charges assessed to monthly bills. Infrastructure charges will increase 4.6 percent annually; commodity charges by 4.8 percent annually, both through 2028.
LVVWD rates adjust every February to inflation; in 2021, that will be by 1.5 percent.
Throughout the pandemic, utilities have suspended disconnects for customers who can’t pay, and tried to keep rates down. NV Energy issued a $120 million refund to customers in December 2020, or a $107 credit per customer, and there was a rate decrease in January. They’re focused on keeping rates down. “We want to be part of the solution, not add additional economic challenges for families and businesses already struggling,” said Cannon.
With customers spending more time at home during the pandemic, Southwest Gas has worked to keep service reliable and affordable. Hester expects stability for natural gas service rates. Going forward he expects continued stability in rates. A significant amount of domestic production keeps natural gas rates low as it is, a competitive advantage for the utility.
“We want to make sure we have the lowest bill possible for our customers, and we look at this as a competitive advantage,” said Hester. Average monthly rates in Southern Nevada run $46, and in Northern Nevada with winter heating, $84. “We know that all of our customers don’t have to have natural gas service, it’s a choice. We want to make sure we provide them with a compelling value proposition.”
