Nevada’s Office of the Military figured it would be money ahead after entering into a contract with a firm to build solar panels on three of its sites around the state to supply it with electricity.
But officials with the office recently won approval from the state Board of Examiners to seek $46,284 from a legislative contingency fund to pay excess utility costs. The reason is because the solar energy being provided under the contract is costing the agency more than if it purchased electricity directly from NV Energy.
The actual shortfall is $74,000 but budget savings are being used to help reduce the amount needed from the contingency fund.
Jennifer McEntee, administrative services officer for the agency, said the 20-year contract with Sierra Solar 1 charges 15 cents per kilowatt hour. Currently NV Energy is charging about 11 cents per kilowatt hour. At the time the contract was signed, NV Energy was charging 14.75 cents per kilowatt hour so it looked like a good deal.
The board, made up of Gov. Brian Sandoval, Attorney General Catherine Cortez Masto and Secretary of State Ross Miller, approved the request, which will now go to the Legislature’s Interim Finance Committee.
State Budget Director Jeff Mohlenkamp also told the board that such contracts going forward are being reviewed carefully to ensure they make financial sense for the state.
“I can assure you that we are looking very carefully at the future awards that we give out,” he said.
Sandoval was told there is no interest in renegotiating the rate by the contractor although some concessions were made. The deal was approved before Sandoval was elected governor in December 2010, retroactive to September 2009.
“We actually spent probably about six months with representatives of Sierra Solar attempting to renegotiate,” said Lt. Col. Rick Blower. “Their position had always been that they have invested millions of dollars to build this system and that the income stream was what made it possible for them to build the project with their funds with no state funds or federal funds.”
Sandoval said after the meeting: “As I said we will be vigilant as we move forward to make sure we’re not in that position again.”