Homeowners in Nevada with photovoltaic (PV) systems got some welcome news last week in the form of a unanimous decision by utility regulators allowing them to keep full retail net-metering reimbursements for the next 20 years.
The settlement, worked out by the utility NV Energy, the staff of the state’s Public Utilities Commission, solar installer SolarCity, and the state’s Bureau of Consumer Protection, reverses a controversial decision late last year that boosted fixed charges and lowered reimbursement rates for homeowners with PV systems. The settlement deal was approved by the PUC last Friday. It will affect 32,000 solar customers in the state, according to an article posted at Utility Dive.
The announcement followed by less than a week a ruling by District Court Judge James Wilson throwing out the PUC’s rate plan for customers who own PV systems. Judge Wilson ruled that the rate plan was a “denial of fairness and due process through inadequate notice.”
However, Wilson also found that the changes to net-metering and fixed service charges for new solar-equipped customers were neither arbitrary nor capricious and did not violate the U.S. Constitution. And the settlement approved last week affirms those terms.
Regulators had approved a proposal from NV Energy late last December to triple monthly service charges for solar customers, from $12.75 to $38.51, while reducing the reimbursement rate for excess solar electricity from the retail to the wholesale rate of 2.6 cents per kilowatt hour over a period of four years. But the plan lacked a grandfather clause protecting customers who already had installed solar panels, and both customers and installers were livid. SolarCity and other installers said that they would no longer do business in Nevada, and a group of solar customers filed a class action lawsuit to block the plan.
The case in which Wilson ruled last week was filed against the PUC of Nevada by Vote Solar, a solar advocacy group.
“This court decision is a win for existing solar customers, although there’s still plenty of work left to be done to bring solar choice and solar jobs back to Nevada,” Jessica Scott of Vote Solar said in a statement posted at the group’s web site. “The court rightly ruled that the PUCN unfairly changed the rules of the game on existing solar customers without due notice. We believe we had a strong legal case for reversing the decision for future solar customers as well and would have appreciated the opportunity to better make that case through oral arguments, which we were not allowed in this case.”
Deal ends a period of uncertainty
It’s been a wild year for owners of PV systems in Nevada. After the PUC decision in December, Governor Brian Sandoval created a task force representing the solar industry, regulators, and environmentalists to examine net-metering issues. Then, in July, Sandoval announced he would not reappoint PUC Commissioner David Noble, the regulator who had written the net-metering decision. As Utility Dive reported, Sandoval said that he wanted a “new direction” for the PUC.
The decision paid off for the solar industry. Existing solar customers got their rates back, prompting a warm endorsement from the Solar Energy Industries Association.
“We thank Governor Sandoval for his leadership and support and appreciate the steps taken by the PUCN to stabilize solar policy,” the SEIA said. “We now must put policies in place that support new solar customers in Nevada so that solar jobs can once again increase, and the robust economic activity associated with solar development can resume.”
The agreement, however, doesn’t directly address whether the solar customers who have been paying higher rates, and getting lower reimbursements for excess power, will be reimbursed. And, as SolarCity pointed out, the deal still leaves some solar customers in a separate rate class, with new solar households paying the higher fixed charges and getting lower reimbursements.
“The Public Utilities Commission’s decision to grandfather existing solar customers is an important step forward for Nevada, to protect the investments thousands of Nevadans have made in our clean energy economy, and affirms that grandfathering should be the law of the land,” Jon Wellinghoff, SolarCity’s chief policy officer said in a written statement.
SolarCity said that the agreement will grandfather all state residents who had applied to install solar panels by the end of 2015. That includes thousands of people who have yet to install their solar systems, and can now move ahead with their plans.
SolarCity Deputy Director Chandler Sherman said in an email last week, “Unfortunately, the rules still in place for the rest of Nevada make rooftop solar unaffordable for anyone who wishes to go solar in the future. Solar applications have fallen 99% since the decision (only 176 people have applied to go solar in the past seven months under the current net metering policies, down from about 1,400 per month before the PUC decision), which is not enough customers to sustain the once-booming solar industry. SolarCity cannot restart operations until the state sets solar policies that work for consumers.”
PUC also pleased
Following Wilson’s ruling in district court, the PUC released a statement of its own, pointing out that the decision “confirmed that the Commission acted lawfully and that the decision to protect non-[net -metered] customers from unreasonable cost-shifts was based on substantial evidence.”
The only part of the PUC’s December order that was vacated applied to existing net-metered customers, the commission said, “for whom the court found that the commission did not provide sufficient notice.”
The court decision did not overrule the PUC’s conclusion that net-metering would unfairly shift $16 million in costs from solar to non-solar customers, Utility Dive reported. The argument that non-solar customers subsidize those who can afford solar panels is a common refrain by utilities in net-metering cases. Some studies, however, have found that utilities understate the value of distributed solar energy.