What’s really going on with Tahoe’s power situation?

An investor-owned utility company serving tens of thousands of Lake Tahoe residents in California is seeking a new power supplier starting next year, with customers left in limbo about who that might be.

Liberty Utilities services approximately 50,000 customers across the Tahoe Basin - including North and South Lake Tahoe as well as parts of Truckee. 

The California-based company sources its energy from Nevada. A portion comes from solar facilities, but the majority is purchased through another investor-owned utility, NV Energy, which will stop supplying Liberty after May 2027.

The announcement has sparked months of media coverage, much of which focused on the upcoming deadline and the impact of power-intensive data centers.

Both utilities maintain that customers will not be left without service during the transition to find a new supplier.

South Lake Tahoe

South Lake Tahoe Mayor Cody Bass said the power supply situation came as a surprise, both as a resident and as a local official. “We really didn’t get any notice prior to the public press release about this,” he told CapRadio.

Bass said the city has met with Liberty and state regulators, and “we have been assured that the lights aren’t just going to turn out.”

But the mayor said the bigger concern is about the procurement process for that new supply, and the financial impact on residents. “I think we’re pretty aware it’s going to cause higher rates, and that of course becomes a major issue for our residents, businesses and for everybody else because our rates are already pretty high,” Bass explained.

He said rates have increased “drastically” during his time in Tahoe, and fears the California Public Utilities Commission (CPUC) may allow Liberty to charge more.

Liberty’s latest rate schedule for “Domestic Service” shows a range of between 41 cents and 46 cents per kilowatt-hour (kWh) for residential permanent customers, and around 45 cents for residential non-permanent customers. A January 2018 brochure from the utility lists residential rates of between 12 cents and 15 cents per kWh. 

PG&E’s rates for “Residential Services” range between 32 cents and 40 cents per kWh, while SMUD’s residential rates range between 15 cents and 37 cents, depending on the season and peak demands.

A Liberty Utilities FAQ page states affordability is a “primary goal” in its supplier search but acknowledges “no utility can predict the exact future cost of energy."

Bass said city staff have been meeting with officials in Truckee, Placer and El Dorado counties, and other municipalities to address the issue together. “I think one of the best things we can do is make an alliance for the Lake Tahoe region in California that does approach the utilities commission together… as well as Liberty,” Bass said. 

A cross-state relationship

The Tahoe Basin is a unique region, with four counties spanning California and Nevada. Power arrangements for some of these communities also cross state lines.

NV Energy says it agreed to temporarily supply power to Liberty starting in 2009, when it sold off its California service area. NV Energy said this came with the assumption that Liberty “would ultimately secure its own transmission access and energy supply.”

Liberty Utilities is connected entirely to Nevada’s electricity grid through NV Energy’s transmission lines; it is not connected to the California grid. NV Energy falls under the jurisdiction of the Public Utility Commission of Nevada, while Liberty only services California customers and thus falls under the CPUC.

Sanjiv Malhotra worked for the Department of Energy under the Obama and first Trump administrations, and told CapRadio that this arrangement is not unusual. “There are various situations where a utility buys power from across state lines,” Malhotra said. “It happens quite frequently actually.”

NV Energy’s supply agreement with Liberty is expiring as the Nevada utility nears completion of the Greenlink transmission project — a series of power lines stretching hundreds of miles across Nevada.

NV Energy spokesperson Katie Jo Collier told CapRadio in an email the current agreement was previously set to expire in 2025, but will now continue through May 31, 2027, “or until Liberty has sufficient transmission capacity in place through Greenlink, whichever comes later.” 

NV Energy will remain Liberty’s transmission provider even after the supply agreement runs out. Liberty will specifically be able to use Greenlink West, a 350-mile stretch from Las Vegas to Yerington, Nevada, to find a new generator.

Liberty Utilities declined to answer specific questions from CapRadio regarding its power supply and operations in the Tahoe region, and did not make a representative available for interview. A company spokesperson instead pointed to the utility’s FAQ page.

Liberty’s page states it has evaluated connecting to the California grid, but that it would require a large transmission line to be built over the Sierra. “Such a project would require a significant investment with environmental and other notable considerations,” it reads. 

Tahoe SPARK

Danielle Hughes is a North Tahoe resident and founder of Tahoe SPARK, a consumer advocacy organization for Liberty customers.

She said she is one of 17,000-20,000 permanent residents in the Lake Tahoe region. Like Bass, Hughes is concerned about the costs that could come with Liberty’s upcoming power transition. 

“Our rates are going to be the highest in the country most likely, and we are not being considered,” Hughes said. “We’re going to now be competing… they’re going to buy either from Utah, Idaho, possibly Oregon.”

Hughes said her concerns extend beyond just future rate hikes. She said the Tahoe region is not accurately represented in energy modeling frameworks or growth projections used by state regulators, especially since Liberty is not connected to the California grid. 

She also said the costs of the Nevada infrastructure used by Liberty are falling onto Liberty’s California customers, and that the peak demand costs are shifting onto a declining group of permanent residents.

“Basically they've set up a rate structure where a permanent resident has a demand charge… we’re always going to exceed the base rate because we live here all the time,” Hughes said.

“Someone like Mark Zuckerberg who’s a non-resident doesn't have a demand charge, but has a high peak demand… he won't have a demand charge and won't be here all the time, but he will heat a bigger area or have a bigger need,” she added.

The commission did not respond to specific CapRadio questions regarding concerns raised by Hughes. A CPUC draft resolution notes multiple concerns raised by Tahoe SPARK and other organizations, including the Public Advocate’s Office and the Sierra Club. 

These include concerns the California Energy Commission “relies on statewide averages that do not reflect Liberty’s distinct load profile… characterized by nighttime and winter peaks.”

Tahoe SPARK also argued the CPUC approved rate increases, cost recovery and infrastructure investments for Liberty Utilities without a "transparent process or a current, integrated evidentiary record.” 

According to the draft resolution, Liberty’s response said while the utility appreciates Tahoe SPARK’s concerns and acknowledges the impact on affordability, it “does not believe they are relevant” to its current filing. The same resolution says the utility commission agrees with Liberty’s position, and that the issues are “outside the scope of the approval requested.”

Legislative responses

Bass said he has spoken with Tahoe’s legislative representatives, and believes the legislature can help create a connection with California’s grid to supply the region. “Part of that also becomes: do these utilities want to make the investment to provide power here,” he explained. “I think that’s where they could get involved and really help us.”

But the mayor acknowledged that those conversations have not gotten very far yet. “I don’t believe we’re at that level of a solution yet that will drive that policy,” Bass said.

Hughes said she reached out to her political representatives on the county and state level while looking at Liberty’s operations, since “the policies weren’t making sense, the mapping wasn’t making sense.” 

“Unfortunately they seem to just be bringing forward Liberty’s statement,” she told CapRadio, adding that she believes local governments may not understand the complicated nature of energy policy. “They keep trying to say, ‘don’t worry, this is not a problem.’ That’s not true.”

CapRadio reached out to Assemblymember Heather Hadwick and State Senator Marie Alvarado-Gil’s offices for interviews or comments regarding the Lake Tahoe power situation. Hadwick’s office said the assemblymember is unavailable for comment.

In a statement Alvarado-Gil’s office said the senator “continues to closely monitor” the power supply situation in the Lake Tahoe region. She is also reportedly in contact with local officials, company representatives and constituents, and soliciting feedback online.

The statement said Alvarado-Gil "believes the best path forward is to allow the regulatory process and utility negotiations to play out under the oversight of the California Public Utilities Commission (CPUC), while ensuring reliable service and reasonable rates for Tahoe families and businesses.”

“At this time, she does not believe a legislative solution is the appropriate response but will continue advocating strongly for our communities,” it adds.

The data center question

An ongoing question surrounding the upcoming power transition has been whether the electricity is being diverted to new data centers in Nevada, which have been placing an increasing demand on the state’s grid.

The Las Vegas Review-Journal reports NV Energy’s Director of Business Development Jeff Brigger told a panel last September these facilities were driving requests to triple the utility’s peak demand. Brigger said the company was “excited to serve the load,” but added that it “cannot impact our existing customer base.”

A January report from the Desert Research Institute (DRI), part of the University of Nevada, noted that over 40 data center projects underway in Northern Nevada, identified as one of the fastest-growing markets in the country.

DRI said 12 data center projects are outlined in NV Energy’s 2024 Integrated Resource Plan. The utility estimates these will impose an energy demand of 5,900 megawatts, almost three times the capacity of the Hoover Dam. The 12 centers will also result in almost 26,000 gigawatt-hours of load growth by 2033, more than half of Nevada’s 2024 net generation.

In an email, a CPUC spokesperson told CapRadio “according to Liberty, the decision by NV Energy not to renew their full services agreement with Liberty was partially due to projected demand by data centers in the region.”

The commission pointed to an April 2026 letter from Liberty stating that “unprecedented large load growth” from large data centers led NV Energy in 2025 to specify “it could not continue full-requirements service beyond the energization of Greenlink West.” 

The CPUC said Liberty also acknowledged the existing arrangement would eventually be discontinued, regardless of demand growth, a statement corroborated by NV Energy spokesperson Katie Jo Collier.

“NV Energy did not plan to continue servicing Liberty’s customers beyond the current agreement, regardless of population growth or new developments like data centers,” she told CapRadio.

NV Energy’s website says Liberty’s plan to change suppliers dates back more than a decade, ”well before data centers became a factor,” and that both factors are “not related.” It also states “data centers did not influence this decision.”

Collier acknowledged that NV Energy must serve customers who meet state requirements, including data centers. “We must balance that obligation with our responsibility to protect existing customers—making sure new demand doesn’t drive up costs or affect reliability, while also delivering on Nevada’s clean energy requirements,” she wrote.

South Lake Tahoe Mayor Bass thinks state and federal officials need to take action on regulating the demands of data centers, and that residents should be the priority. 

“It shouldn’t go back on ‘well, we’re going to cut thousands of residents’ power to allow for one data center to be powered,” Bass said. “If your data center has a higher demand, then you need to meet that demand.”

Danielle Hughes, the consumer advocate, considers the data centers “a distraction, mostly because it’s not addressing the underlying issues of how we got here.”

“There are no data centers being introduced within my utility area; it’s the larger system that is manipulating it so that those costs are just playing out here,” she said.

What are the options?

The CPUC says it is scheduled to vote on the resolution July 2, which will allow Liberty to search for a new supplier. Liberty’s FAQ page says it expects the bidding process to open this summer, and to provide state regulators with a preferred selection in winter 2026-27.

Bass said South Lake Tahoe has considered entering into a long-term franchise agreement with Liberty Utilities for years, but claimed the utility was “not willing” to make the same climate commitments as the city.

He also said Liberty previously closed a walk-in center in South Lake Tahoe, making it more difficult for residents and businesses to pay their bills. “We feel that Liberty has definitely not made the investments — actually almost divested — from providing the service that’s critical,” Bass said. 

Both Bass and Hughes noted ongoing conversations about potential alternative power suppliers, specifically with Pioneer Community Energy. A Community Choice Aggregator (CCA), Pioneer procures energy from different sources but delivers it through existing utility lines, namely PG&E, a model the company says provides more local control over power generation.

CEO Don Eckert told CapRadio that Pioneer has talked with South Lake Tahoe for “a number of years… it just never went very far because Liberty Utilities has never been part of that CCA discussion.”

He said Pioneer expects to start those conversations with Liberty soon, and could serve as their energy provider if selected in the bidding process. But, Eckert noted a major issue is Liberty’s cross-state connections, which could bring future expenses. 

“Everything in PG&E’s territory is going to be connected through the California Independent System Operator (CAISO),” Eckert said, referring to the overseer of the state’s power system and energy market.

“There’s no tie between CAISO and Nevada…. we need to do our due diligence in exploring the options of procuring power on the Nevada side of the fence and to see if this makes sense,” he explained.

Ultimately, Hughes said change needs to come on the state level “for the Tahoe Basin, for understanding our needs and how we are not being represented in any climate policy, energy demand, or cost effectiveness.”

“Reach out to your legislators and ask for support for us,” she said. “It’s a scary thing for our community; we will have power, it will increase our costs, but we can build a coalition and have a voice.”

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