The outlook for rooftop solar in Nevada has boomeranged in the span of just two years.
In December 2015, Public Utilities Commission of Nevada (PUCN) voted to hike rates and eliminate net metering for both new and existing rooftop solar customers. The unprecedented move threw the state’s rooftop solar market into chaos. New installations stopped dead, rooftop solar companies were forced to close up shop, and customers saw the savings from their solar investments disappear.
At the time, accusations swirled that the three-member commission, appointed by Governor Brian Sandoval, was doing the bidding of state utility NV Energy.
But the times have changed. With the reformed commission’s latest decision, advocates for consumers and clean energy say the PUCN has successfully protected the growing residential rooftop solar energy industry while lowering consumer power bills.
Last week, regulators voted unanimously to reject NV Energy’s proposed fixed rate increase for all customers that would have reduced bill savings for rooftop solar and energy efficiency investors. Consumer advocates argued it would have also put a burden on low-income customers.
The public came out strongly against the utility’s original proposal, which would have raised the average residential customer’s basic service charge from $12.75 to $16.76. NV Energy proposed partially offsetting the increase with a reduction in the volumetric charge.
Regulators took a different approach. On December 29, the PUCN approved a draft order that reduced both fixed and usage-based rates for southern Nevada residential customers as part of NV Energy’s triennial general rate case. The commission cited the utility’s financial health and input from the public in its decision.
The Nevada Conservation League, RenewNV, Chispa Nevada, and other advocates delivered 1,464 signatures in opposition to the fee hike. Members of the public also spoke out at a hearing on December 6.
“It is important to note that this rate decrease is occurring while historic levels of Net Energy Metering rooftop solar are being installed, the closure and cleanup of coal plants are being accelerated, and new energy laws are being implemented,” the order states. “Voices of Nevadans have been heard.”
“This reduction in both the fixed and usage-based parts of electric bills will benefit...lower-income Nevadans...while fostering growth in solar energy development and providing an incentive for even greater energy efficiency efforts,” the draft order continued.
NV Energy will collect less profit as a result of last week’s decision. Specifically, the order reduced monthly fixed charges for residential customers from $12.75 to $12.50, with similar reductions in other rate classes. The order also cut $30 million from NV Energy’s revenue request, to be distributed to customers through lower volumetric charges. As a result, all customers, with and without solar, are expected to see monthly power bill savings of about 2 percent. Regulators noted this is the first rate reduction of its kind in more than 30 years.
The rate case decision is the latest victory for rooftop solar advocates in Nevada, following two years of policy uncertainty.
Due to enormous public outcry over the 2015 order, the state legislature passed new legislation last June (AB 405) that reversed the rate increases and reinstated net metering credits. The law also prohibited net-metering customers from being treated as a separate rate class, introduced customer protections and added measures to promote the adoption of energy storage.
Governor Sandoval signed the bill into law and appointed a new set of utility commissioners -- two of them in 2016, and the third last summer. In September, the reformed PUCN established favorable rules and regulations for how net-metered solar customers are to be compensated under the new legislation, bringing life back to the state’s rooftop solar market.
NV Energy initially sought to increase fixed fees as part of the net metering proceeding, but regulators denied that request and required that it be addressed in the utility’s general rate case. The proposal was reintroduced days later as part of NV Energy’s rate request.
The utility insisted the changes were necessary to recuperate the cost of net metering customers.
“To be clear, NV Energy is asking for no additional revenue for its core operations,” the utility said in a statement. “As directed by a Public Utilities Commission of Nevada order issued last Friday, NV Energy is requesting in its general rate review filing to change how costs are allocated amongst different customers due to the implementation of new private solar generation policies enacted in the most recent legislative session.”
NV Energy eventually backed off of its rate increase proposal in response to public outcry. CEO Paul Caudill said the utility did not want to leave the impression that the rate increase “was punitive related to the passage of AB 405,” and would move forward with a commitment to all customers, including those who choose to install rooftop solar.
The PUCN's vote on December 29 makes the rate reductions official. With its latest decision, the commission proved that it heard the public’s voices "loud and clear," said Demi Falcon, an organizer with the Nevada Conservation League.
“Nevadans opposed this back-door attack on rooftop solar,” she said. “We are relieved to see both the utility and the commission took that opposition into consideration. And we hope this marks a new chapter where regulators, the utility, and advocates can work cooperatively to move toward a clean energy future.”