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May 28, 2016

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Lawsuit filed over new rooftop solar utility rates

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Steve Marcus

Solar supporters rally in front of Public Utilities Commission offices Wednesday, Jan 13, 2016.

Advocates of rooftop solar are opening a new front in their challenge of increased bills for NV Energy solar customers. Two law firms filed a class-action lawsuit in Clark County District Court this week.

The suit, filed Tuesday, alleges the utility, which is regulated by the Public Utilities Commission, gave the three-member panel false or incomplete information as it considered the new rates.

In late December, the commission approved new rates for solar customers. The commissioners voted to increase a fixed service fee and reduce the value of credits solar customers earn for generating excess electricity under a program known as net metering.

Since the decision, those changes have come under scrutiny from advocates of the solar industry. Their complaints include the fact the rates include no grandfathering clause for early adopters and are more stringent, in some cases, than the rates NV Energy initially proposed.

SolarCity and Sunrun, two national rooftop installers, pulled their sales and installations teams from the state, a move that resulted in the termination of at least 650 employees.

A number of groups, including the state’s Bureau of Consumer Protection, which represents ratepayers in matters before the commission, are asking the panel to revisit the decision.

The class-action lawsuit is the first attempt to challenge the decision in court. Other law firms have been considering similar action.

The lawsuit claims NV Energy violated the Nevada Deceptive Trade Practices Act and the Nevada Unfair Trade Practices Act, in addition to engaging in consumer fraud, negligence and unjust enrichment at the expense of solar customers.

NV Energy said it does not comment on litigation.

The lawsuit seeks restitution for “anticompetitive actions, deceptive and unfair trade practices resulting in a restraint of trade, monopolization and maintenance of a monopoly over the electric utility in Nevada, price discrimination between different buyers, artificial price inflation, conspiracy to cause the aforementioned results through illegal means, and negligence.”

NV Energy has said in the past that the new rates would not increase its profits. At a recent meeting, commissioners added that if NV Energy were to generate a profit as a result of the new tariffs, the commission would collect it in an account and disburse it to customers.

During the legislative session, lawmakers tasked the commission with setting new rates for solar customers.

NV Energy suggested rates to the commission based on a study it did comparing its costs to serve solar customers and nonsolar customers. That study has been criticized as flawed by a number of groups, including the state’s consumer advocate, who heads the Bureau of Consumer Protection.

The lawsuit argues that NV Energy pressured the commission to approve the new rates.

The commission and NV Energy have argued that solar customers, because they do not purchase as much electricity and, therefore, avoid paying for some of the utility’s fixed expenses, shift costs to nonsolar ratepayers. Solar advocates reject these claims.

Advocates of the industry instead argue that the commission should weigh the benefits of solar. In a filing last week, the consumer advocate, arguing for a more moderate approach, said any alleged cost shift must be balanced with the benefits of solar to all ratepayers.

Those benefits include a reduction in NV Energy’s need to build expensive infrastructure and the promotion of renewable energy, which has long been a goal of state policy.

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