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May 31, 2016

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Rates for rooftop solar customers set to increase Friday

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John Harrington / Sunrun / AP

Real estate experts Drew Scott, left, and Jonathan Scott, center, stars of the HGTV show “Property Brothers” and solar enthusiasts, help install Sunrun solar panels Saturday, Jan. 24, 2015, on their “smart home” in Las Vegas.

NV Energy will implement steep rate hikes on Friday that triple a fixed fee and cut the value of incentive credits for rooftop solar customers, despite several last-minute efforts this week to delay the increases until an appeals process runs its course.

Solar companies, which argue the new rates devastate their model, have already pledged to challenge the rates with NV Energy’s regulator, the Public Utilities Commission, a three-member panel that approved the rates at the end of December.

NV Energy argues the fixed fee increase is necessary to cover the utility’s costs, such as infrastructure investment and the cost of delivering energy to solar customers when their panels are not operating. The revised rates also reduce the compensation solar customers receive from NV Energy for generating excess electricity. Rooftop solar customers are currently receiving the retail rate — what NV Energy customers pay for electricity. Under the new regime, they will receive NV Energy’s wholesale rates.

These new rates will be implemented gradually for all solar customers over a period of four years.

NV Energy currently charges all ratepayers, including solar customers, a fixed service fee of $12.75. With the rates approved by the PUC going into effect Friday, solar customers will pay $17.90 starting Jan. 1. By Jan. 1, 2020, that fee will rise to $38.51.

Under a policy known as net metering, NV Energy reimburses solar customers about 11 cents for per kilowatt-hour of excess energy they generate. The value of those credits will slip to about 9 cents Friday and eventually reach 2.6 cents in 2020.

NV Energy will notify customers of the changes with a slip in their January bill.

Earlier this week, several groups, including the state’s Bureau of Consumer Protection, urged the PUC to delay the new tariffs until all parties had time to request a reconsideration or clarification, since the deadline for such motions falls after Jan. 1.

Implementing the rates before considering appeals that might potentially change the rates could "result in possible confusion and whiplash in rates and possible overcharging,” Consumer Advocate Eric Witkoski argued Tuesday in a motion for a stay.

The PUC confirmed Thursday afternoon that it would not grant a stay. Instead, the panel will consider the requests for halting the rate hike at a Jan. 7 hearing and decide the matter at a Jan. 13 hearing. At the same time, the solar industry is expected to begin filing motions to request that the utility regulator reconsider its order to hike rates for solar customers.

According to the PUC, the rationale behind the rates is to prevent other ratepayers from assuming the costs of keeping solar customers connected to the grid. Because solar customers produce a portion of their energy and therefore do not purchase as much electricity from NV Energy as other ratepayers, NV Energy says they avoid paying some of the utility’s fixed costs.

“Net-metering customers receive grid services and use the grid differently and, as the commission’s order recognizes, require different prices than full-requirements customers,” said Jennifer Schuricht, a spokeswoman for NV Energy, said in a statement.

In his filing, the consumer advocate said the claimed cost shift should be kept in perspective. He argues it does not consider the impact the solar industry might have on NV Energy’s cost structure, including a $900 million investment in a natural gas facility.

"Such recognition of the value of rooftop solar could diminish any claimed subsidy substantially,” he wrote.

NV Energy says it services 17,255 net-metering customers, most of them in Southern Nevada.

With reconsiderations and the upcoming PUC hearing, the rate is far from finalized. The solar industry is expected to revisit the process of appealing the rates next week.

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