Nevada Power proposes trimming credit for net metering
CARSON CITY — A new rate structure for Nevada Power Co. customers who want to install rooftop solar and participate in net metering would provide a credit of about 5.5 cents per kilowatt hour instead of the current 11.6 cents, according to a filing made Friday by NV Energy with the state Public Utilities Commission.
The company said the credit being proposed for net metering customers under the new rate structure better reflects the costs that all customers have to pay for electric service from the utility, including infrastructure and new energy capacity. NV Energy operates in Southern Nevada as Nevada Power.
Net metering allows residents who install rooftop solar to receive a credit from the utility company for any excess energy generated. The utility recently estimated it had 9,571 total net-metering customers. Some 7,990 of them are in Southern Nevada.
Under current rules, average residential net metering customers see their bills reduced by $1,180 a year compared to those without net metering, or 52 percent less. Under the new rate structure, net metering customers would see a bill reduction of $739, or 33 percent less than that paid by non-net metering customers.
The rate proposal could come in for some criticism from the rooftop-solar industry in Nevada, which wanted state lawmakers to extend the current net metering program by raising the 3 percent cap to a higher number.
But Kevin Geraghty, vice president of generation at NV Energy, said the utility buys power for about 4.4 cents per kilowatt hour, so there is still an additional financial benefit to rooftop-solar customers.
With the price of solar panels coming down, there will still be a profit margin for the rooftop solar industry under the new rate structure, he said.
Geraghty noted that one of the biggest residential solar companies in the U.S., Vivint Solar of Utah, announced in July that it would open for business in Nevada. The announcement came after the Nevada Legislature mandated the new rate structure, he said.
The new rate structure will create “a long-term sustainable future,” for the industry, he said.
Even so, the company warns in the filing that those who install rooftop solar under the new rate structure could ultimately end up paying more in energy costs when the cost of buying or leasing a system is taken into account, the filing says.
Lawmakers balked at raising the existing net metering cap and instead passed a measure asking the PUC to set a new rate structure for net metering customers that ensures regular customers of Nevada Power do not subsidize those who install rooftop solar systems.
The new rates would take effect on Sept. 15 for new rooftop-solar customers when the existing net metering cap of 235 megawatts is reached.
The latest estimate is that the cap will be reached by Sept. 1.
The new rate and rules “better reflect the cost of providing service to customer-generators” than the existing net metering rules, the filing says. The new rates are “just, reasonable and fair to all customers and reduce the shifting of costs from customer generators to other customers that occurs” under the existing policy, the filing says.
The PUC has until Dec. 31 to adopt a new rate structure for net metering customers. But NV Energy is asking that the new rates be adopted quickly so that there is no interruption in rooftop solar installations when the existing cap is reached, which could happen later this month.
The Alliance for Solar Choice has separately petitioned the PUC to take action to address the concern about the cap being reached before a new policy is put into place.
The PUC is expected to act on the petition this month.
Contact Sean Whaley at swhaley@reviewjournal.com or 775-687-3900. Follow @seanw801 on Twitter.