Is Nev. poised to change course on net metering?

Source: Benjamin Storrow, E&E reporter • Posted: Wednesday, November 2, 2016

Nevada became the poster child for the national net-metering debate last year when state regulators voted to slash the credits paid to rooftop solar owners who send power back to the grid. New installations ground to a halt, as prominent installers like SolarCity Corp. and Sunrun Inc. shut down operations in the Silver State.

But signs of change are afoot.

The Public Utilities Commission recently voted to grandfather existing residential solar producers, restoring retail pricing for some 32,000 panel-owning Nevadans (ClimateWire, Sept. 19). Gov. Brian Sandoval, a Republican who has said “a fresh perspective” is needed at the PUC, has shaken up the board. Two new commissioners, including the governor’s former general counsel, began work on the three-person panel this month. And a task force appointed by Sandoval to study energy issues recently recommended the Legislature temporarily resurrect net metering for new customers while the PUC works to determine the value of solar power.

The developments reflect a widespread sense that last year’s reforms went too far, observers say. Not even NV Energy, the state’s dominant utility, requested regulators do away with retail rates for existing rooftop customers, they note.

The PUC’s 2015 decision “opened up a Pandora’s box that created a huge political issue that may not have existed in light of a different ruling,” said Jennifer Taylor, executive director of Clean Energy Project, a renewable advocacy group.

Whether the moves amount to a full-scale shift in Nevada’s solar policy remains to be seen, however. Sierra Pacific Power Co., a NV Energy subsidiary serving northern Nevada, has requested rooftop solar users be separated out into a separate rate class of residential consumers. The utility’s plan calls for gradually raising monthly fixed fees on solar customers from $21.09 to $41.48 over 12 years. Filings with the PUC show the credit rooftop solar owners receive for sending power back to the grid would fall from roughly 7.6 cents a kilowatt-hour to 2.7 cents a kWh under the plan, though regulators would review the credit every three years.

Solar advocates say rising costs and falling credits would kill any hopes of resurrecting Nevada’s rooftop solar industry, destroying the economic incentive for new panels. NV Energy did not respond for requests for comment but has argued the measures are needed to prevent non-solar customers from shouldering a greater percentage of the grid’s costs (ClimateWire, March 15).

Regulators are expected to decide the case by the end of the year.

Sierra Pacific has emerged as an early test of how far Nevada will go in rolling back the reforms put in place during 2015. Some observers said a favorable ruling for solar, combined with the commission’s recent decision grandfathering in existing residential solar producers, may lessen the political incentive for state lawmakers to tackle net metering when they return to Carson City next year. Others expect the matter to be taken up by legislators, many of whom have spent much of the last year fielding angry calls from constituents over the issue.

“A significant amount of pressure has been brought to bear,” said Rose McKinney-James, a former Nevada regulator and the managing partner of Energy Works Consulting. “I think there are some policymakers who are looking at this very closely. I think it’s fair to assume there will be some attempt to address this at the Legislature.”

Solar advocates not looking for incremental progress

Less clear is what lawmakers might do. A ballot question calling for the deregulation of Nevada’s utility market appears to be steaming toward approval (ClimateWire, Oct. 24). A recent poll showed 61 percent in favor of the measure and 22 percent opposed (Greenwire, Oct. 27).

Any net-metering discussion will likely have to be included within wider talks surrounding deregulation, solar watchers said.

It is also unclear if legislators intend to send the PUC a policy directive or wade into the task of designing rates for solar customers themselves.

Rebecca Wagner, who stepped down from the commission shortly before the net-metering vote, said lawmakers would do well to avoid designing rates. That task is better suited to the PUC. Instead, legislators should focus on sending a clear policy directive that rooftop solar is a priority to the state, she said.

“I don’t think the status quo and the framework the commission created in its previous decision gives the industry a path forward,” Wagner said.

There are signs solar installers have shifted tactics, as well. SolarCity’s recent hiring of Jon Wellinghoff, a former Federal Energy Regulatory Commission chairman, as chief policy officer was interpreted by many observers to mean solar advocates would pursue a more conciliatory approach in Carson City.

Solar advocates are nevertheless girding for a legislative fight. Even a victory in the Sierra Pacific case would only represent incremental progress, said Chandler Sherman, deputy campaign director at the Bring Back Solar Alliance, a SolarCity-supported political action committee.

The majority of Nevadans will not be affected by the Sierra Pacific case, she noted. Net-metering policies for NV Energy will not be decided until the end of 2017. Legislative action is needed to ensure residents in Las Vegas and other parts of southern Nevada can go solar before then, Sherman said.

“I don’t think anyone else would say, ‘Good, people can go solar in Reno, there’s no need for anyone else to go solar,'” she said. Still, Sherman added, “We’re watching with baited breath to see what the commission will do.”