Nevada Agricultural Profitability And Irrigation Power Rates
By: Doug Busselman, Executive Vice President
Nevada agricultural profitability is the fundamental key to Nevada agricultural sustainability. No matter how “socially aware” farmers and ranchers are supposed to be, if they don’t make a profit – they aren’t going to be sustainable.
Along the lines of past posts, energy and the costs of energy are significant elements in Nevada the overall picture of Nevada agricultural profitability. Even with very decent prices, energy costs have caused bottom lines to be less than positive.
Nevada’s number 1 crop is alfalfa hay. Not only does this crop constitute the largest volume of crop production it also is produced by the most producers. Whether they are growing hay to feed their own livestock or producing it for sale, hay is the green that makes Nevada agriculture go.
Nevada (for those who might not be aware or possible overlooked it) is a desert and growing alfalfa or any other crop requires irrigation. Much of that irrigation requires energy (mostly electricity).
Keeping electricity affordable for agricultural irrigation has been and continues to be a priority for farmers and ranchers as well as advocates (such as our organization).
Over the past couple of years, leading up to the start of the 2007 Nevada Legislative Session, a major initiative has been playing itself out, dealing specifically with the electrical rates for agricultural irrigators in the service area for the public utility formerly known as Sierra Pacific (now called NV Power).
In the 1980ies a special electrical rate was established through legislation that provided agricultural irrigation customers with a lower rate in return for the agreement that their irrigation power could be interrupted during times of need for other users. The rate is identified as IS-2 (agricultural irrigation interruptible).
The legislative initiative AB 144 of the 2007 Nevada Legislature was geared to adjusting the IS-2 rate to make it more affordable. As energy rates continued to climb over the past several rate setting processes, the IS-2 rate was becoming unaffordable for Sierra Pacific agricultural irrigators.
The Sierra Pacific IS-2 rate was also getting out of line with the rates other agricultural producers, outside of Sierra Pacific’s service area, were paying for their power.
With the passage of the legislation, IS-2 power rates were calculated using a formula of averaging all of the lowest rates offered by vendors of electrical power in Nevada.
Having accomplished the legislative authority for this new rate determining system, the focus turned to changing regulations and tariffs to match up with the legislative directives of AB 144. This area of responsibility falls under the authority of the Public Utilities Commission of Nevada.
Shortly after the end of the 2007 Nevada Legislative the process of working with the PUC of Nevada started and after an extensive interchange with the PUC (Commissioners), rural legislators, agricultural producers, Nevada Farm Bureau’s representative (me), PUC Staff, Sierra Pacific Power representatives, and other power customers – the end result was achieved of an operating process to carry out implementation of the new system.
Change Isn’t Always Easy Or Completely Pleasant:
On the plus side of the new IS-2 system, The 2008 irrigation season (March-October) was the first year of the new system’s operation and those who qualified and signed the necessary contract were able to purchase IS-2 (interruptible irrigation rate) power for $0.5836 per kilowatt hour. This rate compared to $0.08132 per kilowatt hour in 2007.
The regulatory process also included provisions dealing with “interruption”. Equipment was required to be installed that provides the ability for the power company to turn off power going to IS-2 customers.
Also included in the “interruption” details is an agreement that a “Peak Power” time-frame will be recognized and that using agricultural irrigation power during this “Peak Power” time-frame will be charged at a much higher rate.
In accordance with the regulations and rates established in the 2008 PUC ruling, irrigation customers who choose to not self-curtail power usage during the designated Peak Hours – (from 2:00 p.m. to 6:00 p.m., Monday through Friday, during the months of July and August). The charge for this use will be $0.30522 per kilowatt hour.
Because of the importance of this subject area – we’ll be covering it in further detail in upcoming posts.
Nevada agricultural profitability is the fundamental key to Nevada agricultural sustainability. No matter how “socially aware” farmers and ranchers are supposed to be, if they don’t make a profit – they aren’t going to be sustainable.
Along the lines of past posts, energy and the costs of energy are significant elements in Nevada the overall picture of Nevada agricultural profitability. Even with very decent prices, energy costs have caused bottom lines to be less than positive.
Nevada’s number 1 crop is alfalfa hay. Not only does this crop constitute the largest volume of crop production it also is produced by the most producers. Whether they are growing hay to feed their own livestock or producing it for sale, hay is the green that makes Nevada agriculture go.
Nevada (for those who might not be aware or possible overlooked it) is a desert and growing alfalfa or any other crop requires irrigation. Much of that irrigation requires energy (mostly electricity).
Keeping electricity affordable for agricultural irrigation has been and continues to be a priority for farmers and ranchers as well as advocates (such as our organization).
Over the past couple of years, leading up to the start of the 2007 Nevada Legislative Session, a major initiative has been playing itself out, dealing specifically with the electrical rates for agricultural irrigators in the service area for the public utility formerly known as Sierra Pacific (now called NV Power).
In the 1980ies a special electrical rate was established through legislation that provided agricultural irrigation customers with a lower rate in return for the agreement that their irrigation power could be interrupted during times of need for other users. The rate is identified as IS-2 (agricultural irrigation interruptible).
The legislative initiative AB 144 of the 2007 Nevada Legislature was geared to adjusting the IS-2 rate to make it more affordable. As energy rates continued to climb over the past several rate setting processes, the IS-2 rate was becoming unaffordable for Sierra Pacific agricultural irrigators.
The Sierra Pacific IS-2 rate was also getting out of line with the rates other agricultural producers, outside of Sierra Pacific’s service area, were paying for their power.
With the passage of the legislation, IS-2 power rates were calculated using a formula of averaging all of the lowest rates offered by vendors of electrical power in Nevada.
Having accomplished the legislative authority for this new rate determining system, the focus turned to changing regulations and tariffs to match up with the legislative directives of AB 144. This area of responsibility falls under the authority of the Public Utilities Commission of Nevada.
Shortly after the end of the 2007 Nevada Legislative the process of working with the PUC of Nevada started and after an extensive interchange with the PUC (Commissioners), rural legislators, agricultural producers, Nevada Farm Bureau’s representative (me), PUC Staff, Sierra Pacific Power representatives, and other power customers – the end result was achieved of an operating process to carry out implementation of the new system.
Change Isn’t Always Easy Or Completely Pleasant:
On the plus side of the new IS-2 system, The 2008 irrigation season (March-October) was the first year of the new system’s operation and those who qualified and signed the necessary contract were able to purchase IS-2 (interruptible irrigation rate) power for $0.5836 per kilowatt hour. This rate compared to $0.08132 per kilowatt hour in 2007.
The regulatory process also included provisions dealing with “interruption”. Equipment was required to be installed that provides the ability for the power company to turn off power going to IS-2 customers.
Also included in the “interruption” details is an agreement that a “Peak Power” time-frame will be recognized and that using agricultural irrigation power during this “Peak Power” time-frame will be charged at a much higher rate.
In accordance with the regulations and rates established in the 2008 PUC ruling, irrigation customers who choose to not self-curtail power usage during the designated Peak Hours – (from 2:00 p.m. to 6:00 p.m., Monday through Friday, during the months of July and August). The charge for this use will be $0.30522 per kilowatt hour.
Because of the importance of this subject area – we’ll be covering it in further detail in upcoming posts.
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