New York serves as a model in how to reform electric utilities

Sunday, Jan. 31, 2016 | 2 a.m.

Nevada certainly is off to a bumpy start in tapping our greatest natural resource — the sun — to create electricity on rooftops.

Even as photovoltaic solar panel manufacturers and installers were getting more than 15,000 incentive-stoked customers to turn their rooftops into micro power stations, NV Energy was complaining that its conventional customers would be stuck with more than their share of the cost of running the power grid. So the Nevada Public Utilities Commission adopted new rates and charges for solar customers, which were not at all what the customers had thought they signed up for and which felt punitive. Facing threats of lawsuits, NV Energy said it would be OK for the initial round of customers to enjoy the beneficial terms that were offered at the time. But new customers face rates higher than what they’d have had they stayed with NV Energy.

Any way you looked at it, it seemed Nevada wasn’t ready for this day. Solutions for how to accommodate home-spun solar energy were framed within NV Energy’s seemingly inflexible business model as the primary source of electricity and the owner-operator of the distribution grid to deliver it to us. The monopoly-protected utility showed no enthusiasm in technological innovation, reducing greenhouse gas emissions or promoting a way for Nevadans to contribute cheap electricity to the grid during peak-use hours, when utilities normally pay a premium for power.

It’s not like we should have been surprised by the retail commercialization of solar power, especially with the plummeting prices of silicon. Gov. Brian Sandoval, politicians and business leaders certainly trumpeted Tesla Motor Co.’s construction of a ginormous manufacturing plant outside Reno to make batteries — not just to run electric cars but to store electricity generated by home solar systems. There will come a time when those industrial-sized batteries will allow homeowners to leave the power grid entirely — even if they’ll have to pay NV Energy to escape its clutches.

Nevada is giving the bum’s rush to rooftop solar at a time when public utilities commissions from California to New York to tiny Vermont — all of them states with regulated utility monopolies — are looking for ways to make rooftop solar work.

In fact, Nevada should have been anticipating this day. Our state law is peppered with references to Nevada’s commitment to explore and develop clean energy, through the Governor’s Office on Energy. Among its basic marching orders: “to promote the use of renewable energy in this state,” and specifically to “encourage the maximum utilization of existing sources of energy in the state” — to which we would include the biggest, cheapest source of all, the sun.

So why did the Legislature, Sandoval and the PUC seem unprepared for the commercial arrival of rooftop solar panels? Maybe because NV Energy was unwilling to complicate its life with a new variable that threatened its bottom line.

We can hear the backroom grumbling now: Wait, you homeowners want to use incentives and federal tax breaks to do what? Develop your own rooftop power-generating stations? That’s what we’re here to do! How can that be fair to everyone else? You can’t do that! Well, maybe we can work out a deal. We’ll buy your excess solar-generated electricity on sunny afternoons when you’re at work and you’ve got extra to sell — but we’re only going to pay you wholesale prices even though you’re saving our neck at peak-use hours when we’d have to pay top dollar somewhere else. And for good measure, we’re going to make you pay us every month to make up for the revenue we’re no longer getting from you. Yeah, you heard us right. Call it a ransom. Remember, we’re a monopoly. We call the shots. And the PUC has our back.

If we’re sounding a bit dramatic, it’s because many Nevadans are feeling betrayed, especially when we look around the country. Energy experts say the technology is there and homeowner solar rooftop systems are assets that should be tapped by the utilities.

Can the electric industry’s business model change? NV Energy isn’t showing any signs of flexibility. But changes are occurring — and dramatically — in New York. A year ago, Gov. Andrew Cuomo announced plans to restrict utilities from owning power plants and for them to instead just be in the delivery business by operating the grid. Customers could then decide from competing power companies what sort of energy to buy — wind, solar, water and the like — and from whom.

It’s good to read what Audrey Zibelman, chairwoman of New York’s Public Service Commission, said of this bold new plan, playing out in a city where Thomas Edison laid out the nation’s first electricity grid in 1884:

“The landmark steps New York State is taking today will reorient both the electric industry and the ratemaking process toward a consumer-centered approach that harnesses new technologies and markets. Just as the Internet revolutionized the communication, retail and media industries, so too will a modernized regulatory and delivery system for electricity give consumers maximum value for their energy dollar.”

A spokesman for Cuomo said, “New York is pioneering a new statewide approach, giving customers new opportunities for energy savings, lower power generation and enhanced reliability to provide safe, clean and affordable electric service for all customers.”

One of the outcomes of the state’s reshaped power system: a significant increase in the use of residential rooftop solar systems, which have a purposeful role in meeting the state’s energy needs.

Nevada is a state of pioneers and, we like to think, a place for companies that embrace the latest technologies and clean energy. To keep pace with the very industries we are trying to attract to Nevada, the governor and legislators need to seriously review and modernize our public utilities system, with NV Energy contemplating a refashioned role. This is a time for innovation, not stubbornness, in tapping the sun for all it’s worth.