NV Energy proposes keeping lower rates for existing solar customers

By Daniel Rothberg

Published Monday, Jan. 25, 2016 | 1:26 p.m.

Updated Monday, Jan. 25, 2016 | 5 p.m.

Amid criticism of a decision by state regulators to raise bills for all solar customers, NV Energy is backing a proposal to allow ratepayers with rooftop solar to stay on the grid at more advantageous rates for as long as 20 years, the utility announced on Monday.

NV Energy will propose the rules for existing solar customers on Feb. 1 in a filing with its regulator, the Public Utilities Commission, which would need to approve the rules.

In December, the commission approved higher tariffs for solar customers, arguing that ratepayers with solar panels, which produce a portion of their energy, shift costs to other ratepayers. The panel increased a fixed fee for solar ratepayers and slashed the value of credits they can earn generating excess electricity under a program known as net metering.

The three-member commission made the new rates applicable to all solar customers. Many had made sizable investments in the technology before the rates changed and argued the decision amounted to a bait and switch. NV Energy’s proposal would correct this issue.

By grandfathering existing customers, NV Energy would allow solar users, who applied for service before the commission’s ruling, to keep the favorable rates for up to 20 years.

“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,” Paul Caudill, NV Energy president and CEO, said in a statement today.

NV Energy estimates that it has about 17,000 net metering customers.

The omission of a grandfather clause is one of the most contentious issues in the commission’s order to raise bills for solar customers, and one the commission was already revisiting. At a meeting today, the commission said it would hear additional testimony on the issue of grandfathering existing customers and hold a hearing on the issue in February.

The solar industry, which has harshly criticized the new tariffs and has appeals pending before the utilities commission, was largely supportive of the progress on the issue.

"The people of Nevada, the solar industry, and NV Energy all agree: existing solar customers should be grandfathered under net metering for 20 years,” Bryan Miller, the president of The Alliance for Solar Choice said in a statement, urging the commission to approve the proposal.

Lyndon Rive, the CEO of SolarCity, which pulled operations from the state and laid off more than 550 employees after the new tariffs were implemented, also applauded NV Energy’s proposal.

But he said the state should restore the prior rate structure for future customers, too. SolarCity filed a referendum today that would restore the more favorable rate regime for all solar customers. It would also allow an unlimited number of participants in net metering.

At a rally in Las Vegas this morning, Rive said the Legislature should call a special session to create a short-term solution that would allow the industry to continue installations in the state before the ballot measure would, if successful in November, created a permanent fix.

“The referendum is the long-term fix, but it still doesn’t solve the decimation that is occurring right now in the industry,” he said in an interview. “The industry is being decimated.”

During the 2015 legislative session, lawmakers approved language — the result of compromise between NV Energy and the solar industry — that charged the utilities commission with developing a permanent rate structure for solar customers by the end of 2015. It also gave the commission leeway to impose new charges and adjust the value of net metering credits. The law served as the basis for the commission’s decision in December.

“Going back to the 2015 legislative session, key stakeholders and industry participants agreed that rules for net metering needed to change,” Shawn Elicegui, NV Energy senior vice president of regulatory and strategic planning, said in NV Energy’s news release today.

He added that the “commission order was the result of a fully litigated, public proceeding made on the basis of a sound evidentiary record. The record includes two hearings, the testimony of 28 witnesses, more than 100 exhibits, and hours of transcribed testimony.”

Rive argued that a special session is merited, claiming that NV Energy misled legislators.

“Before the legislators were convinced that what NV Energy was telling them was true,” Rive said. “I think now the Legislature realizes that the solar industry wasn’t crying wolf.”

The utilities commission has said the move to increase bills for solar customers was necessary to eliminate a cost shift to other ratepayers. They argue that solar users avoid paying some of the utility’s fixed costs. Advocates of the rooftop solar industry argue the assumed cost shift does not give enough weight to the benefits of solar to all ratepayers.

Caudill, NV Energy’s chief executive, said “a fair, stable and predictable cost environment is important to all of our customers.”

“Our proposal seeks a balance for those who selected solar prior to the implementation of the new rules ordered by the (commission) and those without solar,” he said.