Nevada Regulators Deny Solar NEM Grandfathering Proposal


On Feb. 12, the Public Utilities Commission of Nevada (PUCN) rejected pleas from solar industry stakeholders and local residents to grandfather in existing solar customers under previous net energy metering (NEM) rules. Although the commission did decide to extend the phase-in period of recently established NEM changes for all solar customers, some companies and solar advocates are still outraged. Even the state’s governor has expressed his disappointment, and residential solar installer Sunrun has vowed to sue following the decision.

In December, the PUCN passed new policies that reduced NEM buyback rates and implemented higher fees for rooftop solar customers in the state. Solar installers, including Sunrun and SolarCity, argued the new rules will make rooftop solar too expensive, and the decision forced them to shut down their Nevada operations and cut hundreds of jobs.

The new NEM policies, which went into effect in the beginning of this year, also applied to customers who had already installed solar under the original rates. Many of those customers have voiced their anger, claiming the previous rates were a major factor in their decision to install solar in the first place, and they have been calling on the commission to pass a grandfather clause ever since. In addition, a coalition has proposed a ballot measure to do away with the new NEM rules altogether, and other groups have demanded that Gov. Brian Sandoval, R-Nev., unseat every commission member.

Under increased scrutiny – as well as after being hit with a class-action lawsuit by solar customers – utility NV Energy announced a plan in January to allow existing solar customers to receive NEM rates under the previous rules for a period of up to 20 years.

However, when the company officially submitted its proposal, critics in the solar industry argued the plan wasn’t what NV Energy had originally promoted. The proposal offered various options, including one to add the new rates for existing customers in as little as four years. The Alliance for Solar Choice, a coalition of rooftop solar installers focused on NEM policies, declared NV Energy’s proposal a “bait and switch.”

Nevada’s grandfathering issue also caught the attention of U.S. Sens. Angus King, I-Maine, and Harry Reid, D-Nev., who introduced an amendment in the Senate to make it more difficult for utilities and regulators to implement retroactive NEM rate hikes.

Ultimately, the PUCN has decided against grandfathering. Rather, in its 3-0 vote on Feb. 12, the commission ruled to gradually phase in the new rates for all solar customers over a 12-year period. That’s a slight change from the initially approved four-year schedule. According to several reports, Commissioner Paul Thomsen considers the ruling a compromise that strikes a balance between the well-being of solar customers and other utility ratepayers without solar.

The Las Vegas Review-Journal reports Thomsen said, “I think this proposal creates a seamless transition to cost-based rates.”

Meanwhile, Lauren Randall, manager of public policy for Sunrun and spokesperson for The Alliance for Solar Choice, says the 12-year phase-in is “not a true compromise” and the decision “unfairly penalizes people who want to go solar.”

“Even NV Energy recommended grandfathering current solar customers for a period of 20 years, but once again, Governor Sandoval’s commission gave the monopoly utility more than it asked for,” says Randall. “This decision is clearly unjust and unacceptable for Nevadans. We will sue to overturn the anti-solar rules, and we will win.”

The Solar Energy Industries Association (SEIA) says the commission’s decision is “at odds” with the will of the people.

“We are disappointed that despite all of the support this measure had, the commission chose to vote against the will of Nevadans,” comments Sean Gallagher, SEIA’s vice president of state affairs, in a press release.

“While lengthening the transition time to 12 years instead of four will help provide a longer runway, the decision takes away Nevadans’ ability to choose where their power comes from,” adds Gallagher. “Without question, this is extremely detrimental to clean energy and job growth in the state, and we do not view this as a productive step in Nevada’s efforts to maximize the many benefits – from environmental to economic – that solar provides.”

Interestingly, Gov. Sandoval – who appointed the PUCN members and who has come under fire, himself, from some solar advocates – says the commission’s decision “does not go far enough to protect their interests.”

In a statement, the governor says, “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.”

Sandoval also says there’s “no greater friend to the solar industry than my administration” and points out legislation he has signed and supported over the past few years related to solar.

Meanwhile, The Alliance for Solar Choice claims “Sandoval is lying to Nevadans yet again” and charges that the governor has previously sided with NV Energy’s “talking points.”

“The truth is that, had Sandoval hoped for a different outcome, he could have stood for Nevadans instead of NV Energy’s monopoly at many points along the way,” the group says in a press release.

“After waiting for his commissioners to eliminate thousands of solar jobs and harm thousands of Nevadans who made good-faith investments in Nevada’s energy future, Sandoval is now desperately trying to rewrite history,” says Bryan Miller, president of the alliance.

The commission may have made its decision on grandfathering, but the fight is not over in Nevada. Coalitions still plan to push a ballot measure to eliminate the new NEM rules, and many people, including Sandoval, are calling on state legislators to help ensure the future of solar. Then, of course, there are the lawsuits. Stay tuned.

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