NV Energy proposes 'grandfathering' existing rooftop solar customers

Dive Brief:

Nevada utility NV Energy has proposed keeping existing distributed solar users on previous rates for 20 years after regulators rolled out new net metering rules in December, PV Magazine reports.
Existing distributed solar users were moved onto the new rates, which decreased remuneration for solar owners from the retail rate to the wholesale rate and increased fixed charges, alongside new users in an unprecedented decision by the Public Utilities Commission of Nevada (PUCN).
With a lawsuit and a petition for repeal in motion, the PUCN announced last week that they would reconsider the "grandfathering" provision, setting an evidentiary hearing for February 8.
The Nevada Attorney General's Bureau of Consumer Protection originally made the request for the PUCN to reconsider the provision but has since withdrawn its petition. NV Energy has since made its own request to "grandfather" existing solar owners.

Dive Insight:

Things escalated quickly in Nevada after the PUCN unanimously agreed on a new net metering policy. Several provisions have sparked anger from the state's solar sector, including the controversial "grandfather" provision which incorporated 17,000 existing distributed solar users into the new rates and fees, along with the new users. Leading solar developers SolarCity and Sunrun ceased operations in the state shortly after the ruling, terminating more than 600 jobs. A group of rooftop solar customers also filed a class action lawsuit against NV Energy.

But in a surprise twist, Warren Buffett's Berkshire Hathaway-owned NV Energy has proposed to grandfather the existing distributed solar users into the previous rates they were under for the next 20 years. This came after the main petitioner, the state's Bureau of Consumer Protection, withdrew its request for a grandfathering hearing yesterday, PV Magazine reports.

"This grandfathering proposal is being offered in recognition of NV Energy's desire to treat all customers, including those who had previously made a decision to install rooftop solar, fairly," NV Energy CEO Paul Caudill said in a statement.

Aside from the grandfathering provision, the new policy reduced the remuneration under net metering from the retail rate to wholesale, created a seperate rate class for small commercial and residential solar users, and established a time-of-use pricing option for all customers that will be gradually implemented over four years. Regulators also approved an increase in fixed charges and a decrease in the volumetric commodity charge in order to better recoup costs from net metering customers.

The new rates will boost the monthly fixed charge for NV Energy residential solar users from $12.75 to $17.90 and reduce their volumetric rate from $0.111/kWh to $0.108/kWh. The net metering credit for present and future solar owners would fall from $0.11/kWh to $0.09/kWh in the first year and progressively decline to $0.026/kWh by 2020. Monthly basic service charges will scale up to reach $38.51 in four years as the volumetric rate will fall to $0.099/kWh over those four years.

State legislators directed utility regulators to create a new solar tariff in May 2015 that is satisfactory to both solar installers and NV Energy by the end of 2015. NV Energy, the state's major electric utility, proposed to lower the remuneration rate for solar customers and increase fixed fees, arguing that net metered customers don't pay their fair share to maintain the grid.

NV Energy anticipated hitting the 235 MW net metering cap by early 2016, despite warnings from solar installers that the quick pace of solar PV installations would mean the cap would be hit earlier than the projected timeline. Instead, the net metering cap was reached in August 2015, which temporarily halted solar installations and spurred Vivint Solar's exit, the first of three major solar installers to leave the state.

After hitting the cap, regulators voted unanimously to keep retail rate remuneration in place through the end of 2015 and set the stage for the new rate structure in 2016. NV Energy will submit the new grandfathering proposal by February 1, with the PUCN setting a hearing for February 8.

Correction: An earlier version of this post stated that solar remuneration rates were decreased from the wholesale to retail rate. That is not correct. Rates were decreased from the retail to the wholesale rate.