As my ol’ Pappy used to say, sometimes the left hand doesn’t know what the right hand is doing.
Or maybe the Public Utilities Commission should be renamed the Governor’s Office of Economic Dismemberment. On Tuesday, the three-member panel decided to abrogate the contracts that thousands of residential and small business owners made by installing rooftop or backyard solar panels. The PUC ordered NV Energy to start charging so-called net energy metering (NEM) customers a connection charge and to slash the credit for power uploaded to the grid from the retail rate to the wholesale rate — stretching out for years the length of time it will take for current solar panels to provide a return on investment and possibly making it impossible for new installations to ever pencil out. NV Energy must now provide the actual rates by Jan. 1.
One of those companies doing the threatening is SolarCity, which, lest we forget, was enticed to open operations in Nevada just two years ago with a $1.2 million handout from the Governor’s Office of Economic Development. SolarCity is run by Elon Musk, whose Tesla Motors was given a $1.3 billion package of tax credits, abatements and infrastructure to build an electric car battery plant near Sparks.
According to IBD, SolarCity stock fell 6.8 percent Tuesday following the PUC decision but rebounded 5 percent this morning.
Bryan Miller, a vice president of solar panel installer Sunrun and head of The Alliance for Solar Choice (TASC), told IBD there will be litigation challenging the PUC decision because state law requires Nevada to encourage renewable energy investment.
“We believe the (Nevada Public Utilities Commission), appointed by Governor (Brian) Sandoval, has done the exact opposite today,” he said. “In a similar situation in Wisconsin, the commission acted without evidence and attempted to eliminate the solar industry. TASC sued and TASC won, and TASC expects to do the same here.”
The Las Vegas Review-Journal reports there are more than 17,000 net metering customers in Nevada.
The PUC ruling would allow net metering customers eventually to switch to time-of-use (TOU) tariffs, but most have not had smart meters long enough to be able to calculate whether that would be beneficial. Under TOU, power rates vary depending on time of day, higher in the hot afternoons in the summer for both purchasing and selling.
Net metering customer Louise Helton told the R-J the rate change cost her more than $600 a year and will add more than $12,000 to the cost of her solar system over the useful life of the system.
According to the website Protect Nevada Ratepayers, billionaire Warren Buffett’s NV Energy has made $345 million in profits in Nevada this year.
According to IBD, net metering is required in 44 states but is a thorn in the side of utility companies, which can buy renewable energy cheaper from utility-scale solar plants instead of giving credit for rooftop solar at the same rate as retail. But solar panel owners say they are not “selling” power, but are banking it.
With net metering, conventional power users must pay an extra cost, the utilities claim.
The state also required NV Energy to provide subsidies to cover the cost of installing rooftop solar panels, a cost passed on in the form of higher power bills to all ratepayers.