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June 25, 2017

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5 takeaways: Task force pushes for net metering, energy efficiency, consumer protection

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Kirk Speer/The Gazette via AP

Replacing insulation is one way to make a home more energy-efficient, and a task force just recommended that Nevada should require utility regulators and NV Energy to direct at least 5 percent of its energy-efficiency spending to low-income households.

Ending a half-year process involving energy executives, renewable advocates and policymakers, a state task force submitted nearly 30 recommendations to Gov. Brian Sandoval last week that, if fully enacted, would have wide-ranging implications for Nevada’s energy policy. They could affect the future of the rooftop-solar industry, the renewable sector, electric vehicles, utility regulators and energy-efficiency funding.

Although most of the recommendations require legislative proposals, others direct the Governor’s Office of Energy and the Nevada Department of Environmental Protection to take specific actions.

“A lot of them, I think, would have a significant impact,” said Angie Dykema, director of the office of energy. “There are some that are more policy-focused recommendations that don’t require statutory recommendations… But the majority of the recommendations would require legislative changes.”

Proposals ask legislators to consider policies ranging from restoring favorable rooftop-solar rates to limiting the amount of energy Nevada takes from fossil fuels. One directs regulators to encourage electric vehicles and balance fuel-tax revenue issues, while another asks state officials to prepare for the Clean Power Plan, a sweeping EPA emissions-reduction rule that was stayed as several states challenge it.

A rooftop solar compromise?

National companies SolarCity and Sunrun halted Nevada sales after the Public Utilities Commission slashed retail-rate net metering, a program that credited solar customers for sending excess energy back to NV Energy at a rate equal to what they paid NV Energy for electricity. The task force, “to resurrect the residential and small commercial solar business,” proposed an interim policy fix in its final report.

The Legislature, it said, should reinstate retail-rate net metering while utility regulators evaluate the costs and benefits of rooftop solar. In return, solar customers would have to pay a minimum bill not to exceed $25 to ensure they pay their fair share for maintaining the grid. SolarCity supports the concept.

Where it could get tricky is in the Legislature. In the past, NV Energy has been opposed to retail-rate net metering, arguing that it burdens non-solar ratepayers and is an inefficient way to provide solar energy.

Low-income energy efficiency

According to the Southwest Energy Efficiency Project, low-income Nevadans often pay two to three times more for their energy bills as a proportion of their income, a statistic partially due to less energy-efficient residences. One task force proposal, if adopted by the Legislature, would address this issue by requiring utility regulators and NV Energy to direct at least 5 percent of its energy-efficiency spending to low-income households. It would also change the formula that utility regulators use to approve NV Energy’s efficiency programs, which could result in more rebates for all Nevada residents.

Last year, utility regulators cut a portion of NV Energy’s energy-efficiency budget, despite the utility’s objections.

Consumer protection for rooftop solar

With the exception of one member, the task force unanimously approved a recommendation to consider legislation requiring regulations to oversee rooftop solar and consumer complaints against solar businesses.

But this has been another contentious issue since the last legislative session and in statehouses across the country. Solar companies see this type of legislation, which singles out rooftop solar, as an anti-competitive measure pushed by a national trade group for utilities. They believe that current statutes punishing deceptive trade practices and fraud are generally applicable and already protect solar customers.

Implementing the Clean Power Plan

Task force members directed environmental regulators to continue developing a strategy for complying with the Clean Power Plan, even though it's on hold pending the outcome of federal litigation. State regulators met once before the stay. Gov. Sandoval’s administration has said that the state is on a trajectory to meet the rule without many adjustments. Several states are challenging the rule. Nevada has not joined the lawsuit, though Attorney General Adam Laxalt submitted a court brief in support of the challenge. Sandoval’s administration released a statement saying the brief represented Laxalt’s opinion.

“While the requirements for Nevada to meet the Clean Power Plan are straightforward and attainable, there could be some development opportunities for Nevada to work with neighboring states on meeting their requirements,” the task force wrote, arguing that many Western states are also continuing to plan.

Curbing Nevada’s fossil-fuel use

Since the late-'90s, Nevada has had a renewable portfolio standard that requires 25 percent of its energy to come from renewables by 2025. Although some members of the task force argued that the standard should be increased to 50 percent, the panel took a different approach. It recommended the Legislature constrain the amount of energy that is produced by fossil fuels, arguing that it was a more effective path.

Despite the renewable portfolio standard, most of Nevada’s energy, about two-thirds, comes from fossil fuel in the form of natural gas. The task force’s proposal asks the Legislature to consider a requirement that utilities and energy providers would only be able to source 50 percent of energy from fossil fuels by 2040. Proponents said the policy would encourage the development of solar and geothermal resources.

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