In late December, the Public Utilities Commission of Nevada approved the restoration of retail-rate net metering for home solar customers served by of Sierra Pacific Power Company, a subsidiary of NV Energy. The decision followed a year of policy debates and public outcry over a 2015 order to phase out the net metering credit and increase fixed fees on rooftop solar customers.
The debates are not over yet.
Last week, NV Energy requested that the Public Utilities Commission of Nevada (PUCN) reverse its decision to allow for up to 6 megawatts of new rooftop solar capacity under the old, more favorable net metering policy -- a change made as part of Sierra Pacific's general rate case. The utility stated that restoring net metering for solar customers throws out $2.92 million in annual bill savings, for a total of $8.77 million over the three-year rate period, intended for the broad base of northern Nevada electric customers.
“The December 2016 PUCN order directs NV Energy to reallocate this savings to future new solar net metering customers (1,250 if all residential),” according to a press release issued on January 12. “In its filing made today, the company argues that the December order takes the savings that were intended for a larger customer base and directs them to this small subset of future solar net metering customers.”
NV Energy also claimed that applying cost savings to a single class of private solar NEM customers is inconsistent with an October 2016 agreement reached with the Regulatory Operations Staff of the PUCN, the Bureau of Consumer Protection, Northern Nevada Industrial Electric Users, Northern Nevada Utility Customers, Newmont Mining, a coalition of local governmental entities, Nevadans for Clean Affordable Reliable Energy and Vote Solar.
The filing acknowledged the difficult position Nevada utility regulators find themselves in. NV Energy also praised the PUCN for noting the following in the December order:
- Net metering customers do not "go off the grid" and should be treated as a separate class of customers because they use the electric grid both to get and to deliver electricity to the grid.
- The establishment of a fair and equitable pricing structure is important to all Sierra Pacific electric customers, including those who make the decision to utilize private solar generation and those who do not.
- Credit for excess electricity energy that is delivered to the grid by private generation solar customers should be valued at a rate that is competitive with other solar options available to NV Energy. The PUCN establishes that competitive rate, in the short term, at 2.5 cents per kilowatt-hour.
The PUCN also noted, however, that the earlier decision to phase out net metering “all but crushed the rooftop solar industry in northern Nevada” and is “incongruous” with existing law (SB 374) and public intent -- which the NV Energy statement did not address.
Nevada regulators cited a recent report by the National Association of Regulatory Utility Commissioners that found cost-shifting at some level is “unavoidable in practical rate design.” At the same time, the PUCN noted that “unreasonable” cost-shifting is not acceptable.
Based on Sierra Pacific’s figures, adding 6 megawatts of new rooftop solar capacity under the old net metering rates would result in a cost shift of 26 cents per month. Meanwhile, the October agreement to save Northern Nevada ratepayers $2.92 million per year is expected to reduce customer bills by an average of 27 cents per month. So, based on utility figures alone, the average residential Sierra Pacific customer will still save 1 cent per month with the return of net metering, regulators wrote.
This calculation allowed the PUCN to conclude that “any cost-shift that may exist” based on Sierra Pacific’s assessments is “reasonable.”
How customers will react in light of NV Energy's new filing remains to be seen. Rooftop solar enjoys strong public support in Nevada, but the net metering debate pits solar and non-solar customers against each other on an issue both groups care deeply about: their pocketbooks.
The PUCN has 40 days to grant or deny NV Energy’s latest request.
Regardless of the outcome, all sides will have other opportunities to address the net metering issue. In June, the PUCN is expected to address net metering in the general rate case for Nevada Power, NV Energy’s subsidiary serving the southern, more populous portion of the state. The PUCN’s December order also stated that further study of NEM is necessary “to find the appropriate balance for Nevada.”
According to the PUCN website, regulators opened a docket (17-01011) on January 3, 2017 “regarding a universally acceptable methodology for the valuation of net energy metering rooftop solar in Nevada to be used in future proceedings.” The docket, which is currently empty, could create a pathway to resolving Nevada’s ongoing solar policy feud.
Regulators in Arizona recently concluded a general proceeding on the value of rooftop solar, and decided not to extend retail-rate net metering.