Nevada’s utility regulators have taken another swing at net-metering rules for residential solar customers, reversing an earlier decision and restoring more attractive rates to those in the northern part of the state.
In a draft order approved late last month, the Public Utilities Commission of Nevada voted unanimously to restore retail net-metering reimbursements for new solar customers in NV Energy’s Sierra Pacific Power Company service area, up to a cap of 6 megawatts.
It’s the latest move in what has become a year-long tussle between regulators, NV Energy and solar advocates over the monthly rates that solar customer pay, and the amount of money they earn for supplying the grid with electricity from their home photovoltaic systems.
The latest ruling is likely to get the solar industry moving again in northern Nevada, even if it leaves long-term policy undecided. The December 22 rule says that opening up as much as 6 megawatts of rooftop solar capacity for new and existing customers in the Sierra Pacific service area under old net-metering rules is “just, reasonable, and consistent with the public interest.”
Regulators said that allowing more solar customers on the grid would decrease rates for the average residential customers in northern Nevada by a penny a month, and reduce the average bill for a small commercial customers by 43 cents.
“It is not much,” the draft order concedes. But the slightly lower rates are evidence there will be no “unreasonable” cost shift between customer classes. “[Net-energy metering] may grow,” the order says, “while average bills should not.”
New solar customers covered by Nevada Power, the much larger NV Energy service area in the south, however, are still stuck with service charges and net-energy metering (NEM) rates that won’t make solar very attractive.
“Resolution of valuation of NEM issues in Nevada requires more study and collaboration,” the order says. “But the policy of the State of Nevada clearly supports the development and growth of diverse forms of solar and renewable energy as a priority, including NEM.”
Disruption started a year ago
At the end of 2015, regulators approved a plan from NV Energy to triple the monthly service charges for solar customers — to $38.51 per month — while reducing the amount paid for excess solar electricity from 9.1 cents to 2.6 cents per kilowatt hour. The new plan was to be phased in over a period of years.
The new rate structure did not grandfather existing solar customers, and that made a lot of people unhappy. It was apparently the first time that a utility had succeeded in imposing new rules on existing solar customers, who had invested in systems under much more favorable terms. With lower reimbursements, solar customers faced longer paybacks for their investments. Installers worried that customers would default on their power purchase agreements.
Nevada became one of the most closely watched solar battlegrounds in the country. SolarCity and Vivint, the two biggest solar installers, said they’d halt sales there and SolarCity went as far as to shutter a just-opened training center for solar workers in Las Vegas.
The phase-in for new rates was extended in another ruling by the Public Utilities Commission in February, and then in September of last year, retail net-metering was restored for all of the state’s existing 32,000 solar customers. Anyone who had applied to install a solar system by the end of the year would be grandfathered for the next 20 years.
But those applying to become solar customers after January 1, 2016 in the southern part of the state — the Nevada Power area — are still subject to climbing monthly charges and sinking reimbursements. Not much appears to have changed for the largest group of Nevada rate payers.
Ruling seems to point to a change of heart
The significance of the most recent PUC ruling probably lies with the change of heart it signals, not with the number of customers it directly affects now.
In looking back at the aftermath of earlier rulings, the PUC acknowledges that its order of February 2016 “all but crushed the rooftop solar industry in Northern Nevada, reducing the booming industry from 983 applications by residential homeowners and small commercial businesses in Sierra Pacific Power service territory in 2015 to 41 applications in 2016.”
“The landscape on these issues continues to grow,” the draft order continues. “Abraham Lincoln once said that ‘[b]ad promises are better broken than kept.’ The PUCN’s prior decisions on NEM, in several respects, may be best viewed as a promise better left unkept. The PUCN is free to apply a new approach.”
Nevada Power will be subject to new rate hearings this year, with a decision expected by the end of December. Customers in that service area can hope that the PUC extends its thinking on net-metering to them. “The PUC seems open to fixing this in the future,” a person familiar with the proceedings said. “This is a symbolic victory for solar.”
Still up in the air is what happens to new solar customers in the Sierra Pacific service area once the region hits the just approved cap: 6 MW of installed capacity should be enough to take care of 1,000 to 1,500 customers. After that, who knows?