PUC is selective in data choice in deciding solar panel tariffs

People protest new rates for solar panel owners. (R-J photo)

The Nevada Public Utilities Commission keeps insisting that the past rates established for owners of solar panels somehow shifts costs to those who do not own solar panels and this justifies radically altering the rates to turn current solar panel installations from assets to liabilities and make future installations financially infeasible, which will end thousands of panel installer jobs.

In its order Wednesday to continue the new rates that went into effect on Jan. 1 — despite hours of angry testimony — the PUC estimated non-solar panels owners would bear $320 million in additional costs over 20 years if the rates were not changed.

But a study posted on the PUC website from July 2014 by the firm of Energy and Environmental Economics stated that non-solar owners actually benefit from their neighbors’ solar panel to the tune of $36 million during the systems’ lifetime. That was back when there were only 3,300 existing NEM (net energy metering) generators. Now there are more than 17,000.

The study estimates:

Overall, we do not estimate a substantial cost shift to non-participants due to NEM going forward given the current and proposed reforms to the program. We estimate a total NPV (net present value) benefit of 2004-2016 NEM systems to non-participating ratepayers of $36 million during the systems’ lifetimes. Whether NEM systems are a net cost or net benefit to non-participants is sensitive to some key input assumptions … but in either case should be relatively small.

Clear as mud, just like the PUC decision. Nor was there any explanation as to why residential and small business solar panel owners’ rates will change but the rates for public buildings and schools will be unchanged — a fact completely ignored in the press. In fact, one person testifying before the PUC mistakenly assumed schools would be hit, too, an assumption that was not corrected until much later.

The study further states:

Overall, for the state of Nevada, we find that NEM generation is a moderately more costly approach for encouraging renewable generation than utility-scale renewables. However, the difference is small enough that uncertainty in future costs of utility-scale renewable generation changes this answer. We find that NEM generation participants will bear these additional costs rather than nonparticipating customers.

Whose ox is being gored?

In the order passed Wednesday and in comments reported in the press by PUC Commissioner David Noble there were accusations that solar installers were presenting misinformation on the rooftop solar rate, but no specifics were ever cited as to this alleged misinformation.

Noble said in the hearing that power customers with solar panels would see there annual bill increase in the first year of the new rate by $20.15, which amounts to just $1.68 per month on average. He did not bother to say what happens in 2020.

In filing with the PUC, The Alliance for Solar Choice, which is made up of solar panel installers, said connection fees for net metering customers are slated to increase 300 percent in four years, but could skyrocket 688 percent to $87 a month if NV Energy includes demand costs as the PUC has suggested. “At the same time,” TASC notes, “the Order slashed the value of electricity that is generated and delivered to the grid by 76%, from $0.11142 to $0.02649/kWh.”

If the connection fee indeed goes that high, it will wipe out all the savings previously afforded to many of those who own solar panels and will result in some solar customers paying more for electricity than their neighbors without panels. Many of those panels were erected with substantial ratepayer subsidies dictated by the state under the premise the owners would get a return on their substantial investments during the lifetime of the systems.

One of the frequent complaints at the non-hearing is that solar panel owners had been subjected to a bait and switch.

New tariffs:

 

 

 

 

 

 

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2 comments on “PUC is selective in data choice in deciding solar panel tariffs

  1. […] draft order is based on arguments the commission had before it when it made the decision to go forward with new rates, but completely ignored. The Attorney […]

  2. […] announcement came about the same time the PUC voted to rehear the grandfathering issue after rejecting it a couple of weeks ago. There is also a group planning to file a petition that would seek voter […]

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