The economic effects of session 2013’s SB123
Executive Summary
Executive Summary
In the coming years, Nevada residents will come face-to-face with the state’s energy policy as Senate Bill 123 is implemented. The law was passed by the 2013 Legislature and requires NV Energy to shut down its remaining coal-fired power plants by the year 2020.
In this analysis, the Beacon Hill Institute at Suffolk University looks into the economic implications of implementing the renewable energy bill. Using its State Tax Analysis Modeling Program — a five-year model programmed to simulate changes in the economy such as taxes and costs — researchers at Beacon Hill were able to estimate the shift in employment, disposable income, energy costs and more that will occur as SB123 is implemented.
As Nevada shifts to renewable energy sources in the coming years, energy rates for individual consumers as well as business and industry will increase, leading to eventual job losses in the thousands. In 2020, SB123 will cost the state over $100 million and lead to 2.8 percent increases in electricity.
By the time of full implementation, residential customers are estimated to pay an additional $40 each year for energy as a direct result of SB123. Commercial ratepayers are projected to face an additional $170 in energy costs each year, while industrial customers are expected to face rate hikes of $9,450.
In response to the increased cost of energy, 2,630 jobs are projected to be lost by 2020. And, as families and businesses adjust their spending behavior to account for higher energy bills, real disposable income within the state is projected to decline by $226 million per year and investments may drop by at least $29 million annually, though costly renewable energy projects may offset this loss somewhat.