Utility regulators in Nevada have approved a new net-metering plan for their solar customers that will increase the fixed service charge and gradually lower reimbursements for electricity sent from a homeowner’s photovoltaic (PV) array to the grid from the retail to the wholesale rate.
The unanimous vote by the Nevada Public Utilities Commission took place on December 22. The next day, SolarCity announced that it would suspend operations in the state and accused regulators of damaging the state’s economy and jeopardizing thousands of jobs.
“The PUC has protected NV Energy’s monopoly and everyone else will lose,” SolarCity CEO Lyndon Rive said in a statement reported by Greentech Media. “We have no alternative but to cease Nevada sales and installations, but we will fight this flawed decision on behalf of our Nevada customers and employees.”
Changes go into effect on January 1. SolarCity, the nation’s largest installer of residential PV systems, said that the commission’s decision to apply the rates to existing as well as new customers amounted to “sabotage” of customer investments.
“Most disturbing is the Commission’s decision to retroactively sabotage existing solar customer’s investments by not grandfathering them onto current rates,” Rive said. “The Nevada government encouraged these people to go solar, and now the government is putting them at great financial risk.”
Vivint Solar, the second largest residential installer after SolarCity, also said that it would halt operations in Nevada if the plan won approval, Greentech Media said.
Compensation gradually declines
The Associated Press said that the exact amounts of the changes have not yet been determined, but base service charges were expected to double or triple over five years while the reimbursement rate for excess electricity would decline by 75%.
Regulators said that the current net-metering plan, which pays the state’s 17,000 solar customers the retail rate for excess electricity, shifted costs of maintaining the grid to customers who didn’t own any PV panels, the AP reported. This is the same argument that utilities around the country have been making in other net-metering disputes.
The Nevada PUC, however, did reject a proposed “demand charge” because it might confuse customers at a time when other rate changes were going into effect. Demand charges, more common for large commercial customers, bases rates on highest use and can penalize even thrifty customers who experience a spike in electricity consumption at certain times of the billing cycle.
The PUC said in a statement prior to the vote that the changes would “eliminate unreasonable cost shifts between ratepayers without resulting in any additional profits to NV Energy.” NV Energy is a holding company whose two main subsidiaries, Nevada Power Company and Sierra Pacific Power Company, have 1.3 million customers in the state.
“The draft order finds that current rates enable net metering customers to avoid paying for some of the fixed costs associated with the sale of electric service by NV Energy to net metering customers,” the PUC said. “For example, NV Energy incurs significant costs investing in the infrastructure necessary to ensure that it can meet net metering customers’ full electricity demands when the customers’ solar energy systems are not generating electricity.”
It said that paying the full retail rate for electricity “unreasonably increases the costs that are ultimately borne by other ratepayers.” Lowering the rate to the “avoided cost,” what NV Energy would pay to generate or buy the power, would reflect its “true value.”
The order, however, allows customers with PV systems to take advantage of time-of-use and time-of-production rates.
“Time-of-use pricing will enable net metering customers to respond to price signals for both the excess generation produced by their net metering systems and the electricity delivered by NV Energy, while position them to benefit from future advancements in technologies such as storage,” the PUC said.
New training center will close
There’s some painful irony in SolarCity’s decision to stop Nevada installations: SolarCity opened a 13,000-square-foot regional training center in Las Vegas less than a month before the PUC’s vote.
The opening of the West Las Vegas facility, which had been expected to train as many as 4,000 workers per year, was lauded by Governor Brian Sandoval and Senator Harry Reid, among others. SolarCity Public Affairs Manager Amanda Myers said the center will close.
“There are no more jobs to train people for,” she said in an email.
The company said in a news release that it employs more than 2,000 Nevada residents, and that the state is the top solar job creator in the county on a per capita basis. It’s wasn’t immediately clear what would happen to SolarCity’s employees in Nevada.
“We will try to minimize the impact as much as we can with transfers and relocations, but we still expect several hundred Nevada-based employees may be affected by the PUC decision,” Myers’ email said. “The specific impacts will be determined in the coming days and weeks.”
She added that the PUC is considering motions from both the Nevada Bureau of Consumer Protection and The Alliance for Solar Choice to delay the new rate plan. “Both grounds have also suggested they will file a petition for reconsideration of the PUC’s decision,” Myers said.