Dire warnings issued for rooftop-solar industry after new rates OK’d
CARSON CITY — State regulators on Tuesday approved a new rate structure for residential rooftop solar customers despite concerns from customers and industry officials that the changes are punitive and will end the industry in Nevada.
A solar industry group said it will sue over the decision.
The new rate structure approved by the Nevada Public Utilities Commission will increase the monthly fixed charge solar customers will have to pay, and it will reduce the credit received for each kilowatt hour of excess energy generated to wholesale rates.
The new rate structure will take effect Jan. 1 and will apply to rooftop solar customers no matter when their systems were installed.
Firm numbers on what the 113-page ruling will mean in hard dollars to individual customers were hard to come by.
NV Energy will now calculate the exact amounts of the rates based on the PUC’s instructions. The new rates will be filed with the PUC for final review within seven days of the effective date of the order.
NV Energy said only it is reviewing the decision to determine the effect on customers. There are 14,832 interconnected net metering customers at Nevada Power Co. in Southern Nevada, and 2,423 customers with Sierra Pacific in Northern Nevada.
The approval came despite concerns about what it will mean for the rooftop solar industry.
The Alliance for Solar Choice, in a statement following the unanimous decision, said it will challenge what it called an illegal decision.
Bryan Miller, senior vice president of public policy and power markets at Sunrun and president of TASC, said: “We believe the Commission’s decision flies in the face of Nevada law, which requires the state to ‘encourage private investment in renewable energy resources, stimulate the economic growth of this State; and enhance the continued diversification of the energy resources used in this State’ through net metering. We believe the Commission, appointed by Governor Sandoval, has done the exact opposite today. In a similar situation in Wisconsin, the Commission acted without evidence and attempted to eliminate the solar industry. TASC sued and TASC won, and TASC expects to do the same here.”
Chandler Sherman, a representative of the rooftop solar company SolarCity, said the company is evaluating how to proceed in Nevada based on the decision.
Rooftop-solar customer Louise Helton of Las Vegas said the changes will result in higher costs estimated at $623 per year for an average rooftop-solar customer. Even if the new rate is phased in over four years, the changes will add $12,460 to the cost of the system over the remainder of its life that Helton said she installed five years ago.
Gov. Brian Sandoval issued a statement ahead of the meeting, saying the three-member panel’s rulings are independent from the Office of the Governor and all other elected positions.
Solar advocates had asked Sandoval to intervene in the controversy, but Sandoval declined.
“The commission is required by law to provide for energy rate stability and balance the interests of ratepayers with business,” he said. “I cannot, and will not, interfere with its deliberations or try to influence decisions issued by the PUC as it meets its statutory obligations.
“In this matter, I am hopeful that the Commission will find a solution that takes into consideration the thousands of jobs created by this emerging industry while balancing the interests of all ratepayers,” Sandoval said. “The current docket, established by Senate Bill 374, will present a decision that any party can ask for reconsideration or seek judicial review.”
The Sierra Club also criticized the decision.
“At a time when we should be encouraging customers to invest in energy independence through rooftop solar, the PUC chose to side with a NV Energy and hike fees for solar customers,” said Elspeth DiMarzio, organizing representative for the Sierra Club’s Beyond Coal campaign. “Nevada has the potential to be a national leader in the clean energy economy. By investing in clean energy we can create good, living-wage jobs. Right now, Nevada’s clean energy jobs pay $8,000 more than the median wage for other jobs in the state. The number of solar jobs in Nevada doubled last year — but this decision will stop that trend in its tracks.”
The group Vote Solar said: “Today’s decision falls short of serving the best interests of Nevada energy consumers. The PUCN just changed the rules of the game for all Nevadans that have invested in rooftop solar,” said Jessica Scott, regional director for the group.
The draft order will make the following changes:
— Separate ratepayer classes for all small commercial and residential net metering customers to ensure no cost shift to other ratepayers.
— Excess energy produced through net metering systems will be compensated at the wholesale market rate.
— An increase to the fixed charge and corresponding decrease to the volumetric commodity charge to reduce inequities among net metering customers.
— An optional time-of-use pricing option to allow net metering customers to take advantage of energy generation that occurs during peak and off-peak demand periods.
The new rate was the result of action by the 2015 Legislature, which declined to increase the 3 percent cap on net metering customers in effect for most of this year. Lawmakers directed the PUC to craft a new rate for this class of customers.
The news rocked shares of solar companies on a day in which major indexes rallied. SolarCity, fell $3.77, or 6.84 percent, to close at $51.32. Sunrun fell $1.80, or 13.43 percent, to close at $11.60.
Contact Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Find him on Twitter: @seanw801
