Dive Brief:

• The Nevada State District Court for Carson City has overturned higher rates for existing rooftop solar customers approved by the state’s Public Utilities Commission (PUC).

• Judge James Wilson of the district court found that the PUC’s proposal to reduce net metering compensation and increase fixed charges for existing rooftop solar customers was a “denial of fairness and due process through inadequate notice.”

• The court did uphold, however, the net metering and fixed charge changes for new rooftop solar customers, finding that they were not arbitrary or capricious and did not violate the contract clause of the U.S. Constitution.

Dive Insight:

On the heels of a proposal to grandfather existing rooftop solar customers, a Nevada court set aside and remanded the rate changes that have fueled policy debates throughout this year. 

The new net metering policy approved by the PUC late last year lowered the net metering credit to $0.09/kWh from $0.11/kWh, with it eventually declining to $0.026/kWh by 2020. The new rates also established a new customer class for rooftop solar users, who will now be levied a monthly fixed charge of $17.90, up from $12.75. The fixed charge will move up to $38.51 in four years as the volumetric rate falls to $0.099/kWh, from $0.108/kWh.

The PUC’s net metering ruling was challenged by several groups, including Vote Solar and the Attorney General’s Bureau of Consumer Protection. The PUC and NV Energy were the defendants.

The court’s ruling is likely to carry weight as the PUC prepares to rule on an agreement, reached this week with SolarCity and commission staff, to grandfather existing customers, allowing them to keep their original rates and charges.

The proposal, on the other hand, could lessen the likelihood that the defendants would challenge the court’s ruling.

While the district court ruled against the PUC on the issue of due process, it agreed with the PUC’s finding that existing net metering rates unfairly shifted $16 million in costs from to solar customers to non-solar customers.

The court also upheld the PUC’s revised rates for new solar customers, but those rates could face further challenges.

“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," Jessica Scott, Interior West Regional Director for Vote Solar, told environmental law firm Earthjustice.