The Public Utilities Commission of Nevada (PUCN) unanimously approved a draft order on Friday that establishes new rules and regulations for how net-metered solar customers will be compensated in the state, bringing an end to nearly two years of policy debate.
“Sometimes the best way to move forward is to take a step back, adjust direction, and restart again,” the order states. “That is what Nevada is doing with rooftop solar and net energy metering.”
The decision comes after utility regulators voted to phase out net metering credits and hike fixed fees on all residential solar customers in December 2015. The rate change undercut the economics of investing in home solar and slowed Nevada’s booming rooftop solar market to a halt. Hundreds of solar workers were laid off and several installers pulled out of the state.
But with Friday’s decision, Nevada’s rooftop solar market is officially back in business, say rooftop solar advocates.
The new PUCN order serves to implement AB 405 -- legislation signed into law on June 15 that sought to restore favorable rates to rooftop solar customers. Legislators set net metering compensation for excess solar energy exported to the grid at 95 percent of the retail electricity rate. For every 80 megawatts of solar deployed, the export credit is set to decline by 7 percent, to a floor of 75 percent of the retail rate.
The law also prohibits net-metering customers from being treated as a separate rate class, added measures to promote the adoption of energy storage and included a suite of customer protections. Overall, the bill was considered a major win for solar supporters. But passage of the law alone did not settle Nevada’s solar policy debate.
On July 28, NV Energy filed new tariffs to comply with AB 405 that solar advocates said undermined the intent of the law. In its 376-page application, the utility proposed raising the fixed service charge for all electricity customers by about 30 percent in southern Nevada and 15 percent in northern Nevada, along with a small decrease in the average volumetric charge. NV Energy argued that the proposed rate changes were necessary to avoid revenue losses resulting from the more favorable solar credit structure.
NV Energy also sought to have the 95 percent calculation apply to every kilowatt-hour of energy a customer exports to the grid, rather than the monthly netting amount -- a change that decreases the value customers get for the energy they export.
"Governor Sandoval signed AB 405, which had nearly unanimous approval from the legislature, because of overwhelming public support to restore solar energy choice and market certainty for Nevadans,” said Jessica Scott, Interior West director at Vote Solar, in a statement. "Rather than implementing the bipartisan AB 405 and restoring net metering as the Legislature intended to bring back solar, NV Energy’s proposal would have continued the failed policies of 2015 that nearly wiped out solar in Nevada and cost thousands of solar jobs.”
The PUCN’s order guarantees net-metered customers will be paid for the net excess electricity they send back to the utility on a monthly basis. Regulators also rejected NV Energy’s request to increase fixed fees on all residential and small business customers. Rate design and cost recovery issues will be addressed in NV Energy’s open rate case dockets (17-06003 and 17-06004), the PUCN decided.
One change made between the draft order and final order approved Friday came from Commissioner Ann Pongracz, who took issue with language indicating the commission is required to keep NV Energy “financially whole” and proposed changing the phrase to “financially viable.”
“The utility is not insulated from risk,” Pongracz said, according to The Nevada Independent. “It’s not the duty of the commission to ensure that the utility remains whole.”
NV Energy CEO Paul Caudill said his utility is preparing to implement the program changes outlined in the PUCN decision “and will work diligently to support our customers who decide to move forward with private solar generation,” the Independent reports.
With the order approval, new solar customers in Nevada can now connect under the grandfathered tariff that was available before the 2015 decision. The new tariffs will become available on December 1, 2017. At that point, customers will transfer to the new rate plan. The handful of customers who bought solar following the 2015 decision can also choose to take the AB 405 rate.
"Today's decision finally brought solar back to Nevada," said Kevin Romney of Nevada-based installer Radiant Solar, in a statement emailed on Friday. “Thanks to the hard work of Public Utilities Commission and the legislature, I can begin hiring Nevadans again and my team can get back to work."