Nevada PUC decides on 12-year plan to gradually raise solar rates

PUC's ruling on Feb. 12, 2016

UPDATE 6:35 p.m., 2/12/16

CARSON CITY, Nev. ( & KRNV) -- Some existing solar rooftop customers are disappointed. Nevada's Public Utilities Commission did not fully grandfather them in prior to a rate change January 1, 2016.

The Commission said the new rates are necessary to lower solar rooftop subsidies. Whether solar is being subsidized by those who do not have solar remains controversial. NV Energy provided data to the Commission that is being disputed by those who insist independent studies show otherwise. Still, the Commission handed down another controversial decision today.

Naomi Duerr took off her Reno City Council member hat and took on the role of a rooftop solar customer testifying before the panel.

Afterwards she said, "This is disappointing." She said the Commission's data is only from NV Energy, a company that stands to gain by the new solar rate change. She said, "They have disregarded other arguments that solar is subsidizing all users."

Instead of implementing the new rate structure within four years, as was previously approved by the Commission, this plan would implement the new rates every three years in a 12-year plan. But when fully implemented, Duerr said she will see a 300 percent increase in her electricity bill had she not had solar in the first place.

She said this decision will also impact her pay back on her solar investment. Duerr told News 4 she has never seen such an outpouring of citizens impacted by a government decision. She said, "Whether it is using up their life savings, trying to make an intelligent decision, taking money out of a 401-K, getting a second mortgage on their home, to do what they thought was in their financial interest and in the interest of the State of Nevada."

The initial Commission decision prompted several solar companies to lay off workers and leave Nevada. Some industry officials said the new rates no longer make solar affordable in Nevada.

Commissioner Paul Thomsen addressed that concern and said he hoped this "compromise" plan would turn that around. He said, "I think this proposal creates a seamless array, while still creating a path inspiring businesses with regard to rooftop solar with reducing subsidies."

The race will be on to find the next Solar City, the next Sunrun who can pioneer a sustainable business model for the future.

Under this plan, the Commission noted that solar rates would be reviewed by the panel every three years with a new Margin of Cost of Service Study, which is a worry for some.

Rebecca Patrick is one of those laid off solar workers who said, "They say they want to bring solar back but this just creates more instability."

Solar customer Brian Burghart agrees adding, "What sensible corporation is going to come into Nevada and invest tens, hundreds of millions of dollars if they know that at a whim the PUC can change the rules that move them from profitable to not profitable?"

Some solar customers and some industry officials insist this is not over and this is just the beginning of a bigger fight.

SolarCity released the following statement Friday night:

"We are profoundly disappointed by the actions of the Public Utilities Commission today. Let's be clear, the updated ruling includes no grandfathering at all the economics start getting worse for solar customers immediately regardless of when they chose to go solar. It's no better for new customers, and might even confuse them into making a decision today that is only going to get worse for them over time.
By denying rooftop solar customers the right to stay on the same solar rules they signed up for, and keeping their unaffordable new rates in place, the Public Utilities Commission fell short of the standard of fairness we expect from our public servants. More than 17,000 Nevada households who installed solar panels under programs promoted and supported by the State and the PUC remain stranded by today's decision, and thousands more will be denied the opportunity to produce their own power in the future.
We are also disappointed that the PUC denied the motion for reconsideration of The Alliance for Solar Choice, the Bureau of Consumer Protection and other parties. The people of Nevada overwhelmingly disagreed with this decision and asked the Public Utilities Commission to reconsider it. In light of the damage the PUC decision has caused to Nevada's economy, it's unfortunate that the Commissioners will not let their appeal be heard.
We at SolarCity will continue to fight for our customers, as well as for the thousands of Nevadans who want the freedom to go solar in the future. We ask the Nevada Legislature to take leadership on this issue by calling a special session to provide full twenty-year grandfathering for existing solar customers, restore the previous net metering rules, and eliminate any cap on net metering in Nevada."


UPDATE: 3:17 p.m., 2/12/16

Gov. Brian Sandoval has released a statement on the decision reached by the Nevada Public Utilities Commission:

"While I have respected the Commission and its deliberations by not influencing its process, the PUC did not reach the outcome I had hoped for. I remained optimistic that the Commission would find a solution that considered the economic consequences to existing rooftop solar owners. Today's decision does not go far enough to protect their interests.
Renewable energy development in Nevada is a priority for me and an important and evolving issue. I remain committed to providing a path for Nevada to continue to explore the potential of our vast renewable energy portfolio while ensuring Nevada has an equitable system that balances energy policy with just and reasonable utility rates. There is no greater friend to the solar industry than my Administration. In 2011, I signed legislation enacting policies to stand up the rooftop solar market. In 2013, I approved another measure that doubled the net metering cap. In 2015, I signed into law a bill that again changed the net metering cap and transferred oversight of this complex issue to the PUC. The 2015 legislation received public support from the rooftop solar industry and many other interested parties. When I signed these bills, it was my belief that the utility rates should remain constant for homeowners who installed rooftop solar systems on their homes.
The 2015 legislation was approved by a 41-1 vote in the Nevada Assembly and a unanimous vote in the Nevada Senate. I am aware that many of our state legislators share my concern about today's decision and I am hopeful that the Legislative Committee on Energy as well as the New Energy Task Force will bring forward thoughtful recommendations to ensure that Nevada has a stable energy policy that allows renewable energy in Nevada to continue to thrive."


LAS VEGAS (AP) -- The Nevada Public Utilities Commission has voted to phase in higher rates for rooftop solar customers over a longer period of time than previously approved.

Regulators voted 3-0 on Friday to implement the new rates over 12 years, rather than four years.

Commissioners approved new rates in December for customers who use net metering, or sell excess energy from their solar panels back to the utility.

Regulators say the rates better reflect the declining cost of solar power and phase out a subsidy traditional energy customers pay to support a much-smaller group of rooftop solar customers.

Solar customers say it means their panels will take years more to pay off. Solar companies have responded by laying off employees and staging large protests outside PUC meetings.

Hundreds of people are expected to show up to a Nevada Public Utilities Commission meeting Friday where regulators plan to vote on how to phase in higher rates for existing solar customers -- a key struggle in a high-profile debate that's even drawing attention from presidential candidates.

Regulators approved a rate hike for solar customers at the end of last year as a way to phase out a subsidy they say traditional customers pay to support solar users. The original plan called for rates to take effect over four years, but a preliminary order up for consideration Friday would extend that timeline to 12 years and address a key concern from existing customers -- that their systems will now take years more to pay off.

"The 12-year timeframe enables (solar) ratepayers to maximize the value of their (solar) systems by providing time to adjust usage patterns," wrote Commissioner David Noble.

But the proposal isn't placating rooftop solar companies, many of which laid off workers and quit their Nevada sales operations as a result of the rate hike. They say the state incentivized rooftop solar investments in the past and is now pulling the rug out from under solar users and companies.

"Noble's contortionist twisting of the law belongs in a Vegas Cirque du Soleil show, not the halls of government," said Brian Miller, an executive with solar panel installer Sunrun and a vocal critic of Nevada's governor, who appoints commissioners but said he won't meddle in their regulatory work. "Brian Sandoval's legacy will be letting his hand-picked commissioners eliminate a booming industry while he complicitly stays silent."

Nevada lawmakers passed a bill this spring asking the commission to set new rates for solar users once the state hit a statutory solar capacity cap. Regulators finalized the higher rates in December, and parties upset with the decision have filed lawsuits, offered hours of biting public comment at regulatory meetings and launched an effort to repeal the underlying law by ballot initiative.

Democratic presidential candidate Bernie Sanders has tweeted his support for solar advocates' fight, while his primary opponent Hillary Clinton has backed a federal effort to address the Nevada issues and similar fights taking place in other states.

"Utilities should not be allowed to penalize consumers with retroactive rule changes that cause financial hardship and slow the transition to a clean energy economy," Clinton said in a statement Thursday.

Meanwhile, utility regulators accuse rooftop solar companies such as SolarCity for failing to make clear in their sales pitches this past year that a rate change was in the works and could change customers' return-on-investment calculations. They also say it's unfair for 98 percent of utility customers to bear costs for the 2 percent who have solar systems.

"It appears that some small-scale (rooftop) solar vendors advertised unrealistic payback periods," Noble wrote in the draft order. "The commission will not reward the bad behavior of some small-scale (rooftop) solar vendors by requiring non-(solar) ratepayers to subsidize (solar) ratepayers for longer than is necessary."

Rooftop solar advocates, who question the premise that traditional customers are subsidizing solar customers, have accused commissioners of being beholden to NV Energy and guilty of corruption during public comment periods at regulatory meetings.

An attorney representing the PUC says the tension has escalated to the point that commissioners are getting threats for their decision, and regulatory staff members are uneasy coming to work because of people arriving at meetings open-carrying firearms. PUC General Counsel Carolyn Tanner said solar companies are inciting people and need to dial down their message.

"I think they need to tone down the rhetoric," Tanner said. "I think it's very dangerous."

WATCH News 4 for Terri Hendry's report from Carson City.

close video ad
Unmutetoggle ad audio on off