Gibbons: Give energy companies break

CARSON CITY -- Republican Gov. Jim Gibbons drew a largely negative response from legislators Tuesday when he urged them to reduce taxes to induce renewable energy companies to build facilities in Nevada.

Gibbons said Arizona and New Mexico already offer "aggressive tax incentives" to recruit renewable energy companies and it is "imperative to keep Nevada competitive" through tax incentives.

Under his Senate Bill 395, property and sales tax breaks would be extended to geothermal and wind generating companies. Solar companies already can qualify for some tax abatements in Nevada.

The governor said Nevadans now pay $2 billion a year on energy imported into the state. He wants Nevada to become energy independent by 2020 through renewable energy and conservation, and becoming the Silicon Valley of renewable energy technology.

"We would once again be the fastest-growing state, like we were two years ago," Gibbons said.

Sen. Mike Schneider, D-Las Vegas, questioned whether Nevada would be "giving away the farm."

Schneider chairs the Senate Energy, Infrastructure and Transportation Committee, which Gibbons addressed.

The senator said he was concerned that energy companies would build facilities with the assistance of state tax breaks and then export their power to other states. Surrounding states have business profits taxes to recoup tax breaks, Schneider said.

Earlier in the legislative session, Assemblywoman Marilyn Kirkpatrick, D-Las Vegas, criticized Sempra, which built a solar plant in Boulder City with the help of $1.8 million in tax breaks and ended up hiring only one permanent full-time worker.

Schneider took no vote on the bill, which was not embraced by a key Republican.

"If we get in a bidding war in the West (for renewable facilities), we will lose," said Sen. Randoph Townsend, R-Reno.

California and Arizona have an advantage because renewable energy facilities there would be close to population centers, and the states have excellent research universities, he said.

A Democratic energy bill that will be heard today in the Assembly would levy taxes on the power renewable energy companies based in Nevada sell to other states. Legislation to reduce tax abatements will be reviewed there Friday.

Gibbons said levying corporate taxes on energy companies is the wrong approach. Nevada needs to return to its "One Sound State" philosophy of the 1930s, when the state advertised its lack of taxes to attract businesses, according to the governor.

State Economic Development Commission Director Mike Skaggs said also tax incentives are needed to attract renewable energy companies at a time when Nevada has lost 140,000 jobs.

"This is the best chance we have to turn the economy around," Skaggs said.

Gibbons' testimony in the Senate committee Tuesday marked the first time this session he has addressed a legislative committee.

In SB395, he proposes:

• Requiring the state to purchase energy efficient appliances, equipment and lighting.

• Requiring Nevada electrical utilities to make sure at least 25 percent of the electricity they sell to customers comes from renewable energy sources by 2025. That requirement was 8 percent in 2008.

• Requiring auto dealers starting with 2012 model cars to disclose the carbon dioxide emissions released from the cars they sell.

• Removing a requirement for smaller renewable energy facilities to go through a Public Utility Commission environmental protection permit process. Gibbons said the change will save them six months.

• Restricting new power plant construction if the facility emits greenhouse gases and the plant is not required to ensure energy for Nevada customers.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.