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September 30, 2016

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Regulators deal a blow to rooftop solar industry

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Kyle Roerink

SolarCity workers practice installing solar panels at the company’s new facility in Las Vegas.

Updated Tuesday, Dec. 22, 2015 | 4:04 p.m.

With no discussion, state regulators today voted unanimously to slash the value of credits rooftop solar customers earn for generating excess energy.

The three-member Public Utilities Commission adopted a proposed order that would reduce by 75 percent the amount NV Energy pays customers for excess power their solar panels produce and change the flat service rate for customers with solar panels. The changes in so-called net metering policies would phase in over four years, starting Jan. 1.

The exact amounts of the changes haven't been decided, but solar companies say they expect their customers' base service charge to ultimately double or triple.

The decision is a blow for rooftop solar companies, which count on the net metering credits to make solar economically advantageous for customers. They condemned the decision for not grandfathering in existing customers at the higher rate.

SolarCity threatened on Monday to end sales and installations in Nevada if the commission approved the order.

“We have the lowest cost structure in the industry, so if we can’t do business here, we can only assume that others cannot as well,” said Chandler Sherman, a company spokeswoman.

NV Energy issued a brief statement. "We are currently reviewing the order to determine its impact on our customers," it said.

In its original filing, NV Energy argued lowering the net-metering rate was important to avoid shifting costs from solar customers to other ratepayers. The utility, regulated by the commission, had originally sought the introduction of a new charge, but the commissioners rejected that proposal.

The PUC’s position in the order is that higher bills are being paid by nonsolar users to provide “hidden subsidies” for those with solar panels. The PUC said solar users in Southern Nevada have been getting an annual subsidy of about $623. The subsidy for solar users in Northern Nevada is about $471.

Customers with solar units avoid paying for some of the fixed costs NV Energy incurs, according to the order. Those costs include NV Energy's investment in the infrastructure necessary to meet the electricity demands of solar customers when their units are not producing energy.

Bryan Miller, president of the Alliance for Solar Choice, said his organization is considering legal action.

“In a similar situation in Wisconsin, the commission acted without evidence and attempted to eliminate the solar industry,” said Miller, also an executive at rooftop solar company Sunrun. “TASC sued and TASC won, and TASC expects to do the same here.”

Before the meeting, Gov. Brian Sandoval released a statement saying he was “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 made it clear he would not interfere with the decision. But parties to today’s decision could seek reconsideration or judicial review, he said.

Sandoval said he is looking forward "to hearing more from the consumer advocate and his position on the final order.”

The PUC was required to decide on solar rates by the end of the year.

Dozens of solar advocates delivered public comments, arguing that the order as proposed would kill the industry. The PUC hired extra security for the meeting to account for the large turnout.

Four energy efficiency programs also were at stake at today’s meeting.

In a separate decision, commissioners voted to reduce funding for NV Energy’s efficiency programs, eliminating programs for residential LED lights, refrigerator recycling and the installation of high-efficiency pool pumps.

A last-minute change retained funding for the Energy Smart Schools program, which provides educational institutions with incentives to be more energy efficient. The cost of the subsidies are picked up by NV Energy ratepayers.

Las Vegas Sun reporter Cy Ryan and the Associated Press contributed to this report.

CORRECTION: This story has been updated to remove reference to the authority under which the consumer advocate operates. | (December 22, 2015)

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