Nevada regulator urges commission not to delay new solar net metering rates

Dive Brief:

Commissioner David Noble of the Public Utilities Commission of Nevada filed a draft order this week recommending against any delay in imposing a higher basic service charge on NV Energy customers with rooftop solar and reducing the value of the credit they get for the electricity their systems send to the grid.
The commission is scheduled to complete deliberations Jan. 13 on motions from solar and consumer advocates to postpone the order’s implementation. Solar developers especially object to retroactive provisions in the ruling that apply the new charges and reduced remuneration rates to exsisting rooftop solar systems, as well as new ones. They want implementation of the ruling delayed until the “irreparable harm” to the solar industry and to solar owners can be better evaluated.
Noble decided the ruling will not do irreparable harm. Republican State Senator Patricia Farley, lead author of the SB 374 law that authorized the PUCN ruling, said the law was not intended to drive away solar companies and solar jobs. The three biggest national solar installers have terminated Nevada operations.

Dive Insight:

SB 374, signed by the Nevada Gov. Brian Sandoval (R) in June, was negotiated to address claims that Nevada's over 17,000 rooftop solar customers were not paying their fare share for grid infrastructure upkeep. Because net metering credits allow them to pay less to the utility, NV Energy argued that solar owners shift those costs to customers without their own generation.

That shift is over $16 million per year, according to Noble’s draft decision. Solar and consumer advocates participated in the negotiation of SB 374, according to Senator Farley.

But the negotiations were held as the previous NEM policy was expiring. Because a new policy was urgently needed they couldn't debate the cost shift effectively, according to SolarCity CEO Lyndon Rive.

“We literally had a gun against our head," Rive told Bloomberg this week.

The new rates will increase the monthly charge for NV Energy customers who own solar from $12.75 to $17.90 per month in the first year of the phased increase, and they will eventually reach $38.51 at the end of five years. The NEM credit for present and future solar owners would fall from $0.11/kWh to $0.09/kWh in the first year and then, progressively, to $0.026/kWh in 2020.

Nevada regulators will meet to consider Noble's draft order and a delay in implementation of the ruling. Especially contentious are provisions applying the new rates to exsisting rooftop solar systems, which some critics say may violate the contracts clause of the U.S. Constitution.

In his draft order, Noble urged the full commission not to put the new rates and charges on hold, but rather to return funds to solar customers if the new rates are found to be inappropriate.

"If the order is found to be erroneous as it relates to any NEM ratepayers, the issuance of a stay is unnecessary because any amounts that will be paid by NEM ratepayers that should not have been paid can be refunded and otherwise corrected through billing mechanism," Noble said, according to the Review-Journal.