Restructuring the Electricity Market in Nevada? Possibilities, Prospects, and Pitfalls

The subject of Question 3: The Energy Choice Initiative—namely the proposed restructuring of Nevada’s electricity markets—is complex. Supporters and opponents of Question 3: The Energy Choice Initiative are providing data and arguments that appear to conflict with each other. This policy report summarizes and evaluates the primary arguments for and against passage of Question 3. While the Guinn Center does not take a position on Question 3, we seek to inform the debate so that decision-makers, ratepayers, and voters better understand the issue. Given that the evidence we reviewed is comparative and historical, rather than predictive, we cannot demonstrate conclusively that energy choice (Question 3) is either “good” or “bad” for Nevada. That can be known only with the wisdom of hindsight. The Guinn Center notes, however, that the transition to a restructured (or “energy choice”) electricity market in other states was characterized by variability in rate behavior, implementation challenges, and, for residential ratepayers, increased uncertainty resulting from greater exposure to wholesale electric prices.