- What is the meaning of the acronyms and terms used in these Frequently Asked Questions?
- “CRC” means the Colorado River Commission of Nevada.
- “EEI” means the Edison Electric Institute.
- “Industries” means the manufacturing companies comprising the Basic Management Industries located near Henderson, Nevada.
- “NAC” means the Nevada Administrative Code.
- “NRS” means the Nevada Revised Statutes.
- “RFP” means request for proposals.
- “SNWA” means the Southern Nevada Water Authority.
- “WSPP” means the Western System Power Pool.
- What is the Colorado River Commission of Nevada?
The CRC is an agency of the State of Nevada, authorized by state law to, among other things, sell electricity and provide transmission service or distribution service, or both, to certain groups of customers. The CRC purchases a substantial amount of the electricity requirements of its retail customers on the open market. These Frequently Asked Questions relate only to these open market transactions.
- What customer groups does the Colorado River Commission of Nevada support through its power procurement activities on the open market?
The CRC purchases power on the open market to support two different groups of retail customers. The first group includes the manufacturing companies that comprise the Basic Management Industries located near Henderson, Nevada. The second customer group includes the Southern Nevada Water Authority and those of its member agencies that have elected to purchase power from the CRC. The SNWA is a political subdivision of the State of Nevada.
- What products does the CRC purchase and sell?
Currently, the CRC purchases only physical electricity products for its customers. For the Industries, an RFP for short-term firm, fixed-priced, physical energy is issued every month. The RFP quantity varies from month to month based on the needs of the Industries. For the SNWA, the CRC primarily buys and sells firm, fixed-priced, standard products. However, from time to time, non-standard products may be purchased and sold and may be non-firm or unit contingent.
- Does the CRC purchase any energy on a real-time basis?
No. The CRC’s real-time functions are currently performed by Nevada Power Company.
- In what markets does the CRC purchase power?
For the Industries, all activity is limited to the Mead Substation in southern Nevada. For the SNWA, the CRC primarily transacts at Mead and Palo Verde Substations. However, from time to time, the CRC may transact at other delivery points primarily in the Southwest region.
- Does the CRC purchase physical natural gas products?
No. All physical natural gas products are purchased by the SNWA.
- Does the CRC purchase financial products?
No. All financial products are purchased by the SNWA.
- Does the CRC use a default standardized power sales contract for its power transactions?
Yes. CRC uses the WSPP Agreement for all of its power transactions on the open market. The CRC has been a member of the WSPP since July 1, 2001.
- Does the CRC transact under the EEI agreement?
The CRC does not transact under the EEI Agreement.
- Has the CRC signed the WSPP Netting Agreement?
Yes, the CRC signed this agreement on July 31, 2001.
- Does the CRC take title, in its own name, for all physical power that it procures?
- How are CRC’s power transactions supported?
The CRC is a state agency whose power purchases are authorized by law. Although there is no legislative “guarantee” or full faith and credit pledge of the State backing these purchases, CRC’s payment obligations are backed by revenue received from the sale of the power to CRC’s customers and by legislative revenue and spending authorizations for the CRC account from which the WSPP transactions are paid.
When CRC purchases power for the Basic Management Industries, it buys the power pursuant to one or more of its supplemental power or energy supply contracts with the Industries. Each contract obligates the customer to pay CRC for the power purchased for that customer, and, in addition, each customer has deposited with CRC sufficient cash or letters of credit as collateral to back up its payment obligations 100 percent.
Where CRC purchases power on behalf of the Southern Nevada Water Authority, CRC’s payment obligations are supported by SNWA’s contractual obligation to pay CRC for power furnished under their electric power supply agreement with the CRC as well as the credit standing of the SNWA and also by its respective budgetary authorizations.
- What documents are available to assist the CRC’s counterparties in evaluating the CRC’s creditworthiness?
A number of documents are available on the CRC’s website or upon request to assist counterparties in evaluating the CRC’s creditworthiness. These documents include:
- NRS 538.161(2); 538.181(1), (3), (5) (8); 538.201; 538.231; 538.251; and 704.787.
- NAC 538.744 and 538.746.
- First Amended and Restated Electric Power Supply Agreement between the CRC and SNWA, effective March 8, 2006. (available upon request)
- Contract No. P02-62 between the CRC and Titanium Metals Corporation for Supplemental Electric Power Supply Services, effective March 1, 2004, as amended. (available upon request)
- Contract No. P03-62 between the CRC and Pioneer Americas LLC for Electric Power Supply, effective January 1, 2003, as amended. (available upon request)
- SNWA Annual Financial Report
- Are the CRC’s counterparties required to post collateral under NAC 538.744?
No. NAC 538.744(1)(b)
expressly exempts “The Nevada Power Company and any other entity regularly engaged in the business of buying and selling electric power” from the provisions of this regulation.
- Are the CRC’s counterparties otherwise required to post collateral?
The CRC will ask a counterparty to post collateral in the event that the counterparty does not have its own set of audited financials or does not have a rating that is reported by either Standard & Poor’s or Moody’s. The CRC looks to these documents to evaluate the creditworthiness of its counterparties. If such a counterparty is a subsidiary of a company which does meet these requirements, a parental guaranty, letter of credit or other adequate collateral may be requested. The CRC’s preferred form of parental guaranty agreement is available upon request.
Unless a counterparty is also a holder of an allocation of hydroelectric power from the CRC, this regulation would not apply to the counterparty.
- Who should I contact for further information about the CRC’s power purchase and sale activities?
Contact CRC's Energy Service Group at (702) 691-5234 .