Tag Archives: Solar Advocates

PUCN finalizes the Net Metering Controversy

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Protesters gather outside of the PUCN building in Las Vegas.

By Craig A. Ruark

The Public Utilities Commission of Nevada ended the ten-month controversy on the Net Energy Metering (NEM), with a final decision last Friday, February 12th. Most feel that the decision also killed the rooftop solar industry—at least for the time being.

With Friday’s decision, the new rate structure that went into effect January 1, 2016, will remain with one change. Instead of yearly incremental changes, the rates will change every three years until the year 2028. According to the PUCN, this every three-year cycle will be consistent with the general rate case cycles of both Nevada Power and Sierra Power, both of which are subsidiaries of NV Energy.

Beginning January 1, 2016, NEM customers of Nevada Power saw their monthly service charge climb from $12.75 to $17.99, where it will remain until the next increase on December 31, 2018. By the year 2028, that charge will reach a rate of $38.51.

While the service charge went up, the amount that NV Energy will pay for excess energy generated by NEM customers went down from 11.6 cents per kilowatt hour about 9 cents from January 1, 2016, through December 31, 2018. That amount will decline to 2.6 cents by Jan. 1, 2028.

The reason for the change in NEM rates is the $315 million cost subsidy that non-net metering customers have been paying to support the rooftop solar customers. That equates to $1,544.11 per month for each NEM customer. NV Energy claims that there are two causes for the increase in NEM costs, fully dedicated employees and the Renewable Energy Department.

NV Energy has three customer service representatives in the south, and 1.5 representatives in the north, to plus one supervisor allocated to handle phone calls and manually review NEM ratepayers’ bills. As for the Renewable Energy Department, 94 percent of the internal labor costs are allocated to the NEM ratepayer.

In addition, NV Energy stated that the company receives less revenue from NEM customers while the fixed and demand costs incurred by the utility to serve the NEM customers largely remain the same.

However, many opponents of the change say that the subsidy numbers are inaccurate when you take into consideration the saving afforded to NV Energy by having over 17,000 rooftop solar customers connected to the grid.

Distributive generation, as it is called, is far more efficient than building more centralize power plants. And when calculating the contribution made by residential and commercial rooftop solar the PUCN needs to take a number of things into consideration.

  • Rooftop Solar reduces the need for expensive new power plants and transmission lines;
  • less energy is lost in transmission because much of the power generated by rooftop solar is used within the neighborhood where it’s generated;
  • Rooftop solar requires no fuel, and so it provides a hedge against future fossil fuel price increases;
  • NV Energy does not have to pay environmental fees associated with the burning of fossil fuel
  • The energy produced by rooftop solar does not require water
  • Rooftop solar allows NV Energy to close in on state renewable energy and greenhouse gas emission goals without paying for utility-scale solar and wind farms.

A study by Energy + Environmental Economics (E3), was present to the PUCN, which demonstrated that NEM policies do not result in NEM ratepayer free-riding and unreasonable cost-shifting. It further points out that NEM ratepayers create an estimated total net present value to the non-NEM ratepayer of $36 million per system during their lifetime. With an average lifetime of 25 years, that equates to a benefit of $1.4 million per year for each NEM customer. E3, founded in 1989, advises utilities, regulators, government agencies, power producers, energy technology companies, and investors on a wide range of critical issues in the electricity and natural gas industries.

However, the staff of the PUCN rejected the E3 study on the basis that it included “alternative analysis of key drivers,” some of which are listed above.

Regardless of whether the PUCN is right or wrong, their decision has sent the rooftop solar industry into a tailspin. Solar installation sales have decreased dramatically since the December 22 decision on the new rate structure that took effect on January 1st of this year. Massive layoffs have been made, and some of the smaller companies are shutting down operations completely.

Meanwhile, across the country and around the world, energy experts are convinced that distributive generation is the way of the future. One such company who agrees is Duke Energy, the largest electric power holding company in the United States. Duke is actively changing their business model to include distributive generation and has recently purchased a majority interest in REC Solar, a rooftop installation company.

Here in Nevada, the battle is not over. On January 25th, several solar companies held a press conference to announce the kickoff of a drive to gather 55,234 signatures from registered Nevada voters. If successful, a ballot initiative that would require NV Energy to revert to the 2015 Net Energy Metering payment and grid connection fees and eliminate a cap on the number of net metering systems that can be brought online.

Backing the signature gathering campaign is former Nevada Governor Robert List who told the media; “As things now stand, the residential solar industry has just basically been destroyed, and with it the opportunity for Nevadans to sign up and participate and help save our environment, and save money, and do the right thing.”

In addition, John Bamforth and Stanley Schone, represented by the law firm of Jolley, Urga, Woodbury & Little, have filed a class action lawsuit against NV Energy and are demanding a jury trial.

Talk among small solar installation companies after the PUCN decision on Friday indicates that there are more lawsuits coming.

“Three years is the best we are going to get for now,” said Louise Helton, Vice President of 1 Sun Solar, a locally owned solar company that has been selling and installing solar systems in Las Vegas since 2009. “This will give us time to follow through with the lawsuits and approach the legislature about changes to the PUCN’s decision.”


Solar advocates hoping for a Christmas week miracle

The issue of solar net metering was not on the agenda of the state’s Public Utilities Commission meeting Dec.2. However, when it came time for public comments, the group calling itself “We Are Solar” had plenty to say.

In a scene reminiscent of the final courthouse scene of the Christmas movie “Miracle on 34th Street,” volunteers placed stacks of postcard-sized petitions, neatly tied with green and yellow ribbons, on the table before the commission while members of the public pleaded for the continuation of the current net metering program.

A total of 31,650 signed and digitally signed petitions were produced by those in favor of fair metering rules.

Each card read:

Dear Commissioners Thomsen, Burtenshaw, and Noble,

As you consider long-term rules for rooftop solar in Nevada, we ask you to protect competition and our freedom to choose affordable, clean, abundant solar energy. The rules proposed by NV Energy would eliminate choice for Nevadans.

Please adopt fair net metering rules and lead Nevada to a more prosperous, self-sufficient future.

Unlike in the movie, where a mountain of letters addressed to Santa swayed the judge to rule in favor of Kris Kringle’s sanity, solar advocates will have to wait a little longer to find out solar power’s fate. The PUC is scheduled to make its final ruling during the regularly scheduled Dec. 22 meeting.

There are at least 10,000 solar customers participating in the net metering program in Nevada. They make up around 1 percent of NV Energy’s customer base. However, unlike NV Energy’s large contract power suppliers, solar net metering customers don’t pay to transmit the energy from their solar panels to the grid or other grid upkeep charges. And that, according to NV Energy, is the heart of the problem.

According to NV Energy, other non-solar ratepayers are subsidizing the ability for solar customers to access the grid when the sun is not shining.

Net metering customers receive a nearly 12-cent per kilowatt hour credit on their power bill for every kilowatt hour that they generate but don’t use and send to the grid. That’s the same rate non-solar customers pay for the electricity they use.

NV Energy’s answer is to reduce the amount paid to residential rooftop solar customers for their excess energy from 12 cents down to five cents per kilowatt hour, and charge those customers a monthly fee to connect to the grid.

Rooftop advocates claim that this will make rooftop solar no longer viable for the consumer, and will make rooftop solar residents pay more for their electricity than non-solar residents.

A comparison of power bills in Southern Nevada showed that the average home paid $1,439 annually without solar and $168 annually with the installation of a rooftop solar system. With savings of $1,271 per year, the cost of purchasing a 7kw system (minus a NV Energy rebate and 30 percent tax credit), will have a payback of 5.5 years.

However, under the NV Energy proposal a residential solar customer would pay $1,534 annually for power, which equates to $95 more than non-solar customers. The NV Energy proposal calls for a monthly basic service charge of $18.15, along with a 1.43-cent generation meter charge, $78.82 demand charge, and receive a 5.5-cent credit (as opposed to the current 12 cents), for excess power that is delivered to the grid. Under this scenario, the customer will not see any payback on the system but instead will pay an extra $2,375 over the span of the projected 25-year life of the system.

A formal hearing on this matter was held before the PUC Nov. 18-20, generating thousands of pages of testimony.

Included was a recommendation by the PUC staff that residential solar customers pay monthly fees that include a $12.75 basic service charge, 1.48 cents for a generation meter charge, a $22.55 demand charge, and receive a 3.1 cent credit for each kWh of electricity delivered back to the grid.

Under this plan, there would not be any NV Energy rebates for the installation of the system but customers would still be able to take advantage of the federal 30% tax credit. It is estimated that the customer would pay $999 per year for electricity for a saving of $440 on their electric bill compared to the $1,439 paid by non-solar customers. At that rate, the system would have a very undesirable 32-year payback.

On the side of the consumer and the solar advocates is the State of Nevada Attorney General’s Bureau of Consumer Protection, which represents ratepayers in PUC hearings. It filed a Notice of Intent to Intervene, allowing it to provide formal testimony and said NV Energy’s proposal had “serious flaws.” “The BCP is concerned that all residential customers — solar or not — will be overcharged,” said William Marcus, a consultant hired by the consumer advocate to research the proposal.

While the 31,650 petitions is the largest number ever presented to the PUCN, it is unclear as to whether it will be enough to sway the three-member commission to decide in favor of Kris Kringle’s sanity —or rather, the wallets of residential rooftop solar advocates.

 

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