Nevada regulators deny potentially destructive rate hikes

In a victory for rooftop solar in the states, the Nevada Public Utilities Commission rejected NV Energy’s attempts to use Assembly Bill 405 to institute usurious rate changes that would have made solar’s economics tight for many potential customers.

September 5, 2017 Frank Andorka

Image: Wikimedia Commons

Turns out, maybe NV Energy’s “empire” isn’t as strong as it thinks.

On Friday, the Public Utilities Commission of Nevada (PUCN) soundly rejected the utility’s attempts to use Assembly Bill (AB) 405 – a bill explicitly designed to restore net metering in the state – to substantially restructure its rate plans for two subsidiaries. NV Energy argued Nevada Power and Sierra Pacific Power had to charge the new rates because they could not longer discriminate against solar customers.

According to the PUCN, AB 405 was clear in setting four rate tiers that would pay solar customers for between 75% and 95% of the retail rate for the “excess energy” they produce and return to the grid. The question of what the term “excess energy” meant was at the heart of the dispute between NV Energy and solar advocates.

The PUCN said the term “excess energy” meant exactly what it implied – that it mean the difference between the energy produced by the solar customer and what the utility provided them. If the utility provided more energy to the customer, they would pay the utility the full retail rate. If the difference worked in the other direction, the utility would pay between 75% and 95% of the retail rate for the energy solar customers exported back to the grid, depending on the tier.

AB 405 also established clear guidelines on how much solar electricity would be allowed in each tier, setting a limit of 80 MW per tier. Once the 80 MW limit was reached, that tier would close and the next one would open up. The PUCN ruled the legislation was not ambiguous on this point, and that NV Energy’s attempts to change the rates outside of a formal rate-case proceeding was “absurd.”

Predictably, solar advocates were excited about the decision.

“Nevadans have said loud and clear they want the choice to install solar on their own homes and see solar jobs grow again in Nevada,” said Sean Gallagher, vice president of state affairs for the Solar Energy Industries Association. “That was the intent of AB 405, and we are pleased the Public Utilities Commission of Nevada recognized that in its ruling today. Solar businesses in the state now have the certainty they need to get back to work, which means the jobs and economic benefits will follow in short order.”

“NV Energy’s proposal would have continued the failed policies of 2015 that nearly wipe out solar in Nevada and cost thousands of solar jobs,” said Jessica Scott, Interior West Director for Vote Solar. “The past two years proved that Nevadans – both as ratepayers and as voters – absolutely will not stand for anti-solar, anti-consumer action from their leaders.”

The solar industry in Nevada had been holding its breath about the decision, given the PUCN’s odd relationship with rooftop solar in the state.

After slashing net metering in December 2015, the PUCN reversed their decision in 2016. In the interim between December 2015 and the partial restoration of net metering in 2016, the rooftop solar industry in the state cratered. It had just begun to come back in a significant way, and AB 405 was another push in the right direction. But the NV Energy proposal put those gains in jeopardy again.

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