Nev. utility proposes ‘grandfathering’ existing solar customers

Source: Daniel Cusick, E&E reporter • Posted: Thursday, January 28, 2016

Seeking to assuage anger among ratepayers and clean energy advocates, Nevada’s largest electric utility said it would allow existing customers with solar panels to continue being compensated at retail rates for their distributed energy for up to 20 years.

The proposal by NV Energy, if approved by the Public Utilities Commission of Nevada (PUCN), would restore tens of thousands of dollars in lost revenue to ratepayers who have installed solar systems in recent years for both environmental and economic reasons. Under net metering, excess energy that flows back onto the grid from solar-equipped homes and businesses is credited back to the customer, resulting in lower monthly energy bills.

In December, the PUCN approved an NV Energy-backed proposal to revise the state’s net-metering program so that solar producers would be paid the wholesale rate (2.6 cents per kilowatt-hour) for net-metered generation rather than the retail rate (11 cents per kWh), which had been the policy for several years. In addition, the new policy imposed higher grid connection fees for solar owners, roughly $38.50 per month instead of the previous $12.75 per month.

Solar advocates decried the changes, saying they undermined the state’s promise to promote clean energy and rendered thousands of distributed solar systems in Nevada uneconomical, since owners of the systems could no longer reliably recoup their investment by selling excess power back to the grid.

After weeks of rancor, including announcements by leading solar firms that they were exiting Nevada, the PUCN issued a draft order last week saying it would consider “grandfathering” NV Energy’s 17,000 existing solar customers under the policy to shield them from a certain economic blow. NV Energy confirmed on Monday that it would formally propose such a policy in a filing to regulators next Monday.

“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’s president and chief executive officer, said in a statement.

“We recognize the difficult job that … all parties in this proceeding have had in trying to reach decisions on this complex issue,” Caudill added. “We also understand the history of net metering in Nevada and that a fair, stable and predictable cost environment is important to all of our customers.”

Solar advocates welcomed the proposal as a step back from a policy that threatened to put a freeze on Nevada’s fast-growing distributed solar market, which as recently as last year was outperforming most of the country.

“[NV Energy] has made a credible proposal, which if accepted by the Commission would appear to restore customers who have already gone solar to the position that they expected to be in when they made their investment,” Sean Gallagher, vice president of state affairs for the Solar Energy Industries Association, said in an emailed statement.

“Of course, NVE’s proposal does nothing to correct the PUCN’s disastrous policy for new customers who want to go solar,” he added.

Bryan Miller, president of the Alliance for Solar Choice, said, “The people of Nevada, the solar industry and NV Energy all agree: Existing solar customers should be grandfathered under net metering for 20 years.” He added that the PUCN should “follow the lead of every party to this case, and the people of Nevada, to correct their misguided decision.”

At the same time, Nevada solar advocates, including some tea party activists, are seeking to turn the net-metering decision into a referendum on the PUCN and Gov. Brian Sandoval (R), who appoints the three-member board. An onlineĀ petitioncirculating in Nevada asks Sandoval to remove the commissioners — David Noble, Paul Thomsen and Alaina Burtenshaw — for failing to perform their duties under state law.