NV Energy calls on PUC to grandfather rates for existing solar panel owners

Backyard solar panels

NV Energy filed an advice letter with the Public Utilities Commission Wednesday asking that the agency grandfather the rates charged to those who had installed rooftop solar panels prior to Jan. 1.

The PUC had ordered that over the next 12 years all rooftop solar owners, new and existing, would be charged higher connection fees and receive less credit for power uploaded to the grid.

The letter states:

NV to PUC

The PUC could act within a matter of weeks or months, while the legislative change sought by the task force could not come until after the 2017 legislative session.

The higher rates were at first supposed to be implemented in four years, but the PUC later stretched it out over 12 years.

“After a number of recent failed attempts to negotiate a resolution of this grandfathering issue with out-of-state private solar suppliers, it became clear that NV Energy needed to step up and act alone,” Paul Caudill, president and CEO of NV Energy, is quoted as saying in a company press release. “I have spoken with many of these net metering customers personally, and understand and empathize with their concern. We simply did not want to wait any longer to offer a solution on their behalf and believe our filing today represents the most efficient and timely way to do that.”

Of course, this does nothing to bring back the many hundreds of rooftop solar installation jobs that disappeared with the new PUC rates and will make any future residential installations fiscally impractical, because new installations might not achieve a return on investment over the life expectancy of the panels.

The new rates only cost me, a backyard solar panel owner, about $9 on my June bill but the future rates would push the added cost to nearly $45 for a typical June, assuming minimal decline in panel output.

In that same press release, Kevin Geraghty, senior vice president of energy supply, blamed solar panel installers for misleading customers into thinking their rates would be locked in.

Yes, the contract does say: “Utility’s distribution tariffs may be amended by the PUCN (Public Utilities Commission of Nevada) at any time.”

Amended, not abrogated. Who could have anticipated this kind of bait and switch when the powers that be were all preaching green energy all the time to save the planet?

In addition to the NV Energy request to the PUC, a ballot initiative has been approved for this November’s ballot that would roll back the PUC’s new net metering rates. The state Supreme Court is scheduled to hear arguments Friday and whether it meets legal requirements to go forward.

To be fair, NV Energy did not seek to have the new higher rates apply to existing customers. That was the work of the PUC staff. But approximately 32,000 contracted angry customers is not good public relations.

Then there also is an initiative that qualified for the ballot that would end monopoly status for electric utilities in the state and allow customers to purchase from an open market. That would not be good for the bottom line of NV Energy and the other power companies in the state.

Check back Friday for this week’s newspaper column and a discussion of the power struggle.

 

 

 

 

Solar panel owners are subsidizing other power customers, not the other way around

Solar panels being installed on a Nevada home in 2015. (R-J photo by Jeff Scheid)

I never could figure out why, when NV Energy jacked up the rates charged to residential solar panel owners because they were somehow being subsidized by non-panel owners, the rates for non-panel owners were not concomitantly reduced and yet the move was somehow going to be revenue neutral.

Two reports out this week say NV Energy’s subsidy contention is bogus, and, in fact, solar panel owners are providing a net benefit to power customers in general.

A report from The Brookings Institution notes that Nevada’s net metering rates — that change solar panels from being an asset to a liability — have caused the installation of new solar panels to plummet 92 per cent in the first quarter of this year.

The Brookings report, by Mark Muro and Devashree Saha, asks and answers what it calls the burning question:

Does net metering really represent a net cost shift from solar-owning households to others? Or does it in fact contribute net benefits to the grid, utilities, and other ratepayer groups when all costs and benefits are factored in? As to the answer, it’s getting clearer (even if it’s not unanimous). Net metering — contra the Nevada decision — frequently benefits all ratepayers when all costs and benefits are accounted for, which is a finding state public utility commissions, or PUCs, need to take seriously as the fight over net metering rages in states like Arizona, California, and Nevada.  Regulators everywhere need to put in place processes that fairly consider the full range of benefits (as well as costs) of net metering as well as other policies as they set and update the policies, regulations, and tariffs that will play a critical role in determining the extent to which the distributed solar industry continues to grow.

As I have said before the problem is that monopoly power companies have an infrastructure cost that remains no matter how much power it sells. The only difference between a solar panel owner and a customer who conserves and is efficient is that the solar panel output can be measured. NV Energy calculates that solar panel owners were avoiding paying their fair share of infrastructure costs — to the tune of about $52 a month.

But solar panel installer SolarCity and the Natural Resources Defense Council calculate that rooftop solar provides a net benefit to all Nevadans of 1.6 cents per kilowatt-hour in actual costs and as much as 3.4 cents per kWh if you include benefits to the environment, which is admittedly hard to calculate.

NEMrates

The report by Brookings also notes that a 2014 study prepared for the Nevada Public Utilities Commission found that net metering provided $36 million in benefits to all NV Energy customers and over the 25-year lifetime of the panels the net benefit amounted to $166 million — just for the ones installed so far.

A 2015 study from Maine said the value of rooftop solar was $0.33 per kWh compared to the average retail price of $0.13 per kWh. “The study concludes that solar power provides a substantial public benefit because it reduces electricity prices due to the displacement of more expensive power sources …” Brookings concluded.

The report goes on to list numerous other studies that found solar panels benefited power customers in general rather than being a drain.

Brookings addresses the infrastructure cost issues by recommending decoupling. The NRDC says this is done by regulators of private utilities using “modest, regular rate reconciliations every year to compensate for under- or over-collection of fixed costs during the previous year. More than half the states have adopted decoupling mechanisms for either electric or natural gas utilities as a necessary (but not sufficient) part of the policies that allow utilities to invest in the cheapest and cleanest energy resource: energy efficiency.”

Though 15 states have adopted decoupling, according to Brookings, states like Nevada, which has not, are fighting net metering the hardest. “Typically, decoupling has been used as a mechanism to encourage regulated utilities to promote energy efficiency for their customers,” the Brookings authors say. “However, it can also be used as a tool to incentivize net metering by breaking the link between utility profits and utility sales and encouraging maximum solar penetration. Advocates of decoupling note that it is even more effective when paired with time-of-use pricing and minimum monthly billing.”

 

Mt. Wheeler Power Co., which covers all of White Pine County as well as parts of Nye, Elko and Eureka counties and parts of three counties in Utah, still provides net metering rates for its customers with solar panels. The current rate is 3 cents per kWh but that is expected to increase when the company’s wholesale provider is expected to increase rates, a company executive said.

Valley Electric Association, which services Nevada power customers along the California border from Mineral County to Sandy Valley in Clark County, shows on its website that it also provides net metering rates.

You can’t get there from here — but you can go for free

Gov. Sandoval demonstrates how to recharge a car that was shuttled to Beatty for the dog and pony show. (R-J photo by a photog who probably drove to Beatty in a gasoline-powered car)

Think of it as an electric oasis — a place to fill up along your caravan journey across the desert to pay homage to the lords of government in Carson City.

Only, you can’t get there from here.

According to the morning newspaper, Gov. Brian Sandoval took time out of his busy schedule Tuesday to travel to Beatty to dedicate the state’s first electric car recharging station. Three more are planned along the 450 miles of Highway 95 between Las Vegas and Reno. It is dubbed the Electric Highway by the word crafters at the state.

Pay no attention to the fact most electric cars have a range of less than 100 miles before requiring a recharge and the distance from downtown Las Vegas to Beatty is nearly 120 miles.

To demonstrate for the assembled press, according to the paper, Sandoval recharged a Ford Focus from the state Department of Transportation. Since the car has a range of only 76 miles, it had to be shuttled to the ceremony from Las Vegas.

And even if the car could reach the recharging station at Eddie World, plan on spending a little time at Eddie World, because most of the outlets require four hours to recharge, though a couple can do an 80 percent recharge in half an hour. But I doubt there will be long lines for “speedy” outlets.

But a full charge would get you to Goldfield, where you can call for a tow truck to take you the 26 miles to the next recharging station when it is built in Tonopah, but you can charge up your electric toy for free courtesy of the state and the local electric utility for the next five years.

“This really is significant for us,” the governor was quoted as saying. “Just think about it. This is the first electric highway in the United States. And when I talk about the New Nevada, it’s significant steps like this that show the rest of the country that we are tech savvy, especially when it comes to electric cars and autonomous vehicles.”

NV Energy touts building Electric Highway with your tax money and rate money. Robbing from the poor to give to the rich.

Newspaper swallows power company’s bogus net-metering claims

When they are right, they are right. When they are wrong, they are wrong.

For the second time in a matter of weeks the Las Vegas newspaper used its editorial page to criticize the state for propping up the rooftop solar power industry with tax credits and subsidies and favorable rate structures.

They are right. The rooftop industry would never have gotten off the ground without generous subsidies and tax credits and even then the systems would not have penciled out for homeowners if they were not allowed to deduct from their monthly bills the number of kilowatt-hours uploaded to the grid — which is called net-metering.

It never should have happened but it did.

But they are wrong to swallow NV Energy’s bogus claim that somehow those who do not own rooftop solar are subsidizing those who do. It is also wrong to “take” the property value of those who were persuaded to install rooftop systems with their own money but are now told they can never recoup their investment because the state regulators changed their minds.

“Indeed, NV Energy was paying rooftop solar power generators 11.5 cents per kilowatt hour for excess energy, more than twice as much as the utility company paid for energy on the open market (4.4 cents per kWh),” the Review-Journal editorializes, failing to note that 4.4 cents is the 24-hour average but that solar panels generate extra power during the peak period when rates can easily exceed 30 cents per kWh. Nor do they note that NV Energy has contracts to pay more than 13 cents per kWh for industry scale solar power.

NV Energy has even set up Time of Use (TOU) rate schedules that its customers may choose to opt into. That’s what smart meters are for. Under one payment schedule a residential customer in the summer would pay 36 cents a kWh during peak hours but only 6 cents during off-peak hours. Another schedule with different parameters would charge 50 cents a kWh during summer peak.

Today’s editorial concludes without so much as a blush of self-awareness, “Nevada is well into the race to provide businesses with incentives, chasing and being chased by other states eager to do the same. But the state would better serve its citizens by getting out of economic development altogether and halting the subsidization of private enterprises that will compete against companies that aren’t subsidized.”

I don’t recall the R-J expressing indignation at the handouts for Tesla Motors and Faraday Futures, merely a couple of cautionary notes and calls for vigilance and transparency.

I do seem to recall a recent editorial praising the use of public money to build a stadium backed by the paper’s new owner Sheldon Adelson. There is a story in today’s edition stressing that the funding model isn’t final, though it still lists the public funding as covering 65 percent of cost.

There also is a story about the state doling out grants to build recharging stations for electric cars, for which the power would be free for five years. The state just can’t stop.

Today’s editorial is based on the NV Energy calculation that solar panel owners have been avoiding paying their fair share of infrastructure costs — to the tune of about $52 a month.

The Public Utilities Commission answer to this specious claim was to triple connection fees for those on net-metering and slash to less than 3 cents the compensation for uploading a kWh of electricity. They are now contemplating grandfathering existing net-metering customers for 20 years, as the R-J reports today. California recently grandfathered existing solar customers, as have other states. Of course, this will do nothing to renew the rooftop solar installation companies who have laid off workers and stopped doing business in Nevada.

But The Alliance for Solar Choice begs to differ. In a PUC filing, the group claims NV Energy failed to adequately take into account the value of exported energy during peak hours, which reduces the need for additional power generation and capital costs.

TASC calculates that each residential solar panel owner provides a net benefit of $12.08 per month to NV Energy and does not require a subsidy of $52 a month. (TASC subsidy filing)

File photo accompanying today’s R-J editorial online.

 

 

Solar panels: Who is really subsidizing whom?

When the Nevada Public Utilities Commission (PUC) adopted new net-metering rates for residential owners of solar panels, effective Jan. 1, it did so based on NV Energy calculations that solar panel owners were avoiding paying their fair share of infrastructure costs — to the tune of about $52 a month. Thus, the PUC raised the connection fee for net-metering customers and slashed the amount of credit given for power uploaded to the grid.

But The Alliance for Solar Choice begs to differ. In a recent filing with the PUC, the group claims NV Energy failed to adequately take into account the value of that exported energy during peak hours that reduce the need for additional power generation and capital costs.

TASC calculates that each residential solar panel owner provides a net benefit of $12.08 per month to NV Energy and does not require a subsidy of $52 a month. (TASC subsidy filing)

“Exported energy effectively reduces deliveries to neighbors, so should reduce increases in aggregate need to invest to meet capacity growth,” TASC argues in its filing. “These adjustments, which are based on evidence in the record of this proceeding, demonstrate that Vote Smart is correct in concluding that Net Metering does not result in an unreasonable cost shift.”

Vote Smart has also filed challenges to the net-metering decision.

TASC1

OK, I don't actually understand it either, but ...

OK, I don’t actually understand it either, but …

The PUC is considering a NV Energy filing calling for grandfathering rates for existing residential solar and transitioning rates over 20 years.

Meanwhile, the net-metering battle has moved to Washington, where Sen. Harry Reid, D-Nevada, and Sen. Angus King, I-Maine, are seeking an amendment they say would block states from jacking up rates on solar panel owners and save the future of the rooftop solar industry, according to the Review-Journal Washington bureau today and the R-J Carson City bureau yesterday. (Where this power is granted in the Constitution is certainly questionable, because interstate commerce is probably not involved.)

“We should not be pulling the plug on clean energy at a time when more and more Americans are making it work,” Reid said in comments on the Senate floor, according to the R-J.

Meanwhile, on the front page of Investor’s Business Daily, it is reported that subsidies will continue to make residential rooftop solar economical in 2017, but “Nevada won’t be among them.”

IBD says the Nevada PUC overhaul of net-metering rates and the rapid exit from the state of several solar panel installers show the “residential solar market still relies heavily on subsidies and favorable regulation.”

 

“Clearly, you’re not going to have the opportunity you’ve had in recent years in that market,” an analyst told IBD. “Given that, in our view, demand is going to hit the floor in Nevada.”

Amid all this, petitions are being contemplated to allow the voters to overturn the PUC net-metering decision and to break up the NV Energy monopoly, the R-J reports.

Nevadans for Affordable, Clean Energy Choices’ petition would allow NV Energy customers to choose another source of power by 2023. Several casino companies are already trying to get the PUC to allow them to buy cheaper power elsewhere.

 

 

 

NV Energy now proposes grandfathering existing solar panel customers’ rates

The devil is always in the details.

On Monday NV Energy put out a press release saying it will submit a proposal to the Public Utilities Commission (PUC) to “grandfather” existing rates for residential owners of solar panels “to allow existing net energy metering customers to remain on old rules over a transition period as long as 20 years.”

Transition to what and how quickly?

The PUC put into force on Jan. 1 new rates that “transition” over four years and eventually increase the connection fee for solar panel customers from $12.75 to $38.51 and cut the credit for power uploaded to the grid from 11 cents per kWh to 2.6 cents — to the point some solar panels owners could be paying more for power than neighbors without solar panels, hardly a worthy investment.

Many or most of those existing solar panels were installed at the encouragement of the state Legislature and NV Energy with the added inducement of subsidies from power company revenues, often covering half the cost of installation. This allowed the owners to cover their investment within the 20- to 30-year lifetime of the panels, which otherwise would not the case.

NV Energy has not yet stated what its rates eventually would be or what the rate curve will be.

The power company 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 approval of the old net metering rules and rates.

“This grandfathering proposal is being offered in recognition of NV Energy’s desire to treat all customers, including those who had previously made a decision to install rooftop solar, fairly,” the press release quotes Paul Caudill, NV Energy president and chief executive officer, as saying.

The release also said that the company did not take a position on grandfathering in its original filing with the PUC in July.

In fact, it was the PUC staff that that proposed abrogating existing contracts with residential solar panel owners and rolling out the much higher rates. Public buildings and schools are exempted, of course.

“The staff recommendation would bring all net metering customers, including those in the current program, under the new rate structure,” An Aug. 22 newspaper story relates.

Net metering is basically a system by which home solar panels that generate more power than the home is using upload power to the grid and get those kilowatt-hours deducted from the monthly bill at whatever the current retail rate is.

According to an earlier story NV Energy had proposed that future rooftop solar panel customers would get credited for so-called “returned” power at a rate of only 5.5 cents per kWh instead of the current 11.6 cents.

NV Energy now says it will submit its new proposal to the PUC on Feb. 1 and propose letting current solar panel owners “remain on the old net energy metering rules over a transition period as long as 20 years.” Again, what transition means is not explained.

The PUC’s new net metering rates ignited a storm of protests, litigation and acrimony largely directed at NV Energy.

“We also understand the history of net metering in Nevada and that a fair, stable and predictable cost environment is important to all of our customers,” Caudill said. “Our proposal seeks a balance for those who selected solar prior to the implementation of the new rules ordered by the PUCN and those without solar.”

Shawn Elicegui, NV Energy senior vice president of regulatory and strategic planning, also attempted to make the company look less the villain of the piece.

“The December 23, 2015 Commission order was the result of a fully litigated, public proceeding made on the basis of a sound evidentiary record. The record includes two hearings, the testimony of 28 witnesses, more than 100 exhibits, and hours of transcribed testimony. NV Energy’s rate proposal was not accepted by the PUCN, but recognizing the open public regulatory process, we will fully comply with the balance of the order,”Elicegui said. “We feel strongly, however, that the grandfathering proposal we plan to make fairly balances the interests of all of NV Energy’s customers and stakeholders.”

Might also keep the company from having to spend time and money on litigation and endless hearings.

Grandfathering of existing solar panels does nothing for the thousands of jobs lost by solar panel installers due to the new metering rates.

Also on Monday the PUC put out a press release announcing the approval of 20-year renewable energy contracts that add 129 megawatts of solar generation capacity in Clark County — the 79-megawatt Playa Solar 1 project owned by First Solar and the 50-megawatt Boulder Solar II facility owned by SunPower.

The release said the price is less than 4 cents per kilowatt-hour and noted that, because the plants are owned by independent companies, ratepayers will not incur any risks and will to have to pay a return on equity that would be necessary if NV Energy were the builder.
According to filings with the PUC, NV Energy agreed to pay 3.87 cents a kWh for power from First Solar’s plant plus a 3 percent a year escalating charge — which pencils out to about 5.2 cents over 20 years — and 4.6 cents a kWh with no escalator for power from SunPower Corp.’s project.
At the time of the contract negotiations the Energy Policy Act of 2005 was set to expire at the end of 2016 and would have ended investment tax credits amounting to 30 percent of the value of solar projects. That doubtlessly twisted the arms of the First Solar and Sun Power to make a deal while they could still make a profit.
Since then Congress extended the tax credits through 2019, after which they decline gradually to 10 percent in 2022. After 2022 the tax credit will be eliminated for residential solar panels but will continue at 10 percent for commercial ones.
Without the subsidies, tax credits and favorable rate structures solar panels for homes or industry simply don’t pencil out.

 

Class-action lawsuit filed to overturn new solar panel tariffs

That didn’t take long.

On Wednesday the PUC let stand its decision to drastically alter the deal residential solar panel owners had with NV Energy. Today lawyers filed a class-action lawsuit in Clark County District Court seeking to overturn the changes and seeking damages.

The PUC made the indefensible and unsubstantiated claim that past rates established for owners of solar panels somehow shifted costs to those who do not own solar panels.

Why the suit names only NV Energy and not the PUC is unclear. It was the PUC staff that came up the idea that current solar panel owners would not be grandfathered and continue to get the rates they were promised when they purchased solar panels, not NV Energy.

The suit notes that the plaintiffs and members of the class “were misled and now have expensive solar power systems that do not provide the promised rebates, discounts and rates misrepresented by Defendants and which cannot cover their own costs in any reasonable amount of time.”

It also challenges the cost shifting claim by saying the electricity provided by solar panel owners to the power company — exclusively by contract — is transported to non-solar customers who pay the full retail rate and are within the vicinity of the solar customer, thus reducing the cost of transport of power over any distance.

It also accuses NV Energy of undertaking “activity directly in restraint of trade, including price fixing by raising the price of the base rate or service charge of net metering customers only, eliminating discounts, and establishing lower values for credit given to electricity generated by net metering customers and fed back to the Defendants.”

The suit uses the losses of one the two named plaintiffs to project losses for the nearly 15,000 solar panel owners in Southern Nevada to come up with damages of $27 million — probably a bit high in my estimation.

The suit does not mention the discriminatory nature of the new tariffs, which apply to residential customers only while public buildings and schools are grandfathered under the old tariff system.

Residential net metering customers will see their connection fee increase from $12.75 a month to $38.51 or higher and their credit for uploaded power cut from more than 11 cents per kWh to 2.6 cents.

Solar panels in the backyard of a member of the ‘class.’

 

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:

 

 

 

 

 

 

Newspaper column: Nevada is killing jobs it spent tax money to attract (Updated)

Sometimes the left hand doesn’t know what the right hand is doing.

Two years ago the Governor’s Office of Economic Development doled out $1.2 million to entice rooftop solar panel installer SolarCity to open an office in Nevada and create jobs.

This past week the governor-appointed Public Utilities Commission became the Governor’s Office of Economic Dismemberment, issuing rules that make SolarCity’s business model no longer viable in Nevada. The next day the company announced it is shutting down most operations and laying off workers.

“The people of Nevada have consistently chosen solar, but yesterday their state government decided to end customer choice, damage the state’s economy, and jeopardize thousands of jobs,” SolarCity CEO Lyndon Rive said in a press release. “The PUC has protected NV Energy’s monopoly, and everyone else will lose. We have no alternative but to cease Nevada sales and installations, but we will fight this flawed decision on behalf of our Nevada customers and employees.”

SolarCity is run by Elon Musk, whose Tesla Motors was given a $1.3 billion package of tax credits and abatements to build an electric car battery plant near Sparks. All in the name of creating jobs.

Solar panels being installed. (R-J photo)

The three-member panel ordered NV Energy to start charging so-called net metering customers with solar panels an additional connection charge and to slash the credit for power uploaded to the grid from the retail rate of more than 11 cents per kilowatt-hour to the wholesale rate of about 5 cents — 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.

According to Investor’s Business Daily (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. Solar panel owners contend they are not “selling” power, but are banking it, uploading power to the grid when the sun shines and withdrawing power when the sun goes down.

The utility companies claim they make hundreds of dollars less each year providing service to net metering customers, and that is somehow unfair to other ratepayers.

Oddly, state law requires 25 percent of the state’s electricity to come from renewable sources by the year 2025, and the state has for years 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.

Businesses that install rooftop panels had warned that this decision could cost the state 6,000 jobs. SolarCity itself has 2,000 employees here, according to a Nov. 30 press release announcing a new training center.

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 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.”

There are an estimated 17,000 net metering customers in Nevada.

SolarCity’s Rive said of those customers, “Most disturbing is the PUC’s decision to retroactively sabotage existing solar customers’ investments by changing the rules on them. The Nevada government encouraged these people to go solar with financial incentives and pro-solar policies, and now the same government is punishing them for their decision with new costs they couldn’t have foreseen. These actions are certainly unethical, unprecedented, and possibly unlawful.” Actually, NV Energy did not initially propose to make the changes retroactive. That came from the PUC staff.

Net metering customer Louise Helton told the Las Vegas newspaper the rate change will 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.

This is what happens when the state picks winners and losers and keeps changing the rulebook.

NV Energy is owned by billionaire Warren Buffett’s Berkshire Hathaway Energy, which cut nearly 10 percent of its Nevada jobs after acquiring the company in 2013.

It is all about jobs, right?

(Disclosure: This writer is a net metering customer of NV Energy.)

A version of this column appears this week in the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel, the Lincoln County Record and the Sparks Tribune — and the Elko Daily Free Press.

Update: On Wednesday the PUC posted a 104-page filing that outlines the new net metering tariffs it plans to impose. It immediately raises the connection fee for the residential and small business owners of solar panels from $12.75 to $17.90 today and to $38.51 in 2020.

It immediately cuts the credit for each kWh of power uploaded to the grid from 11 cents to 9 cents and slashes it to 2.6 cents in 2020, half the daily levelized rate NV Energy says it pays for wholesale power now. And never mind that the power is uploaded in the heat of the day when wholesale power costs many times more.

A back of the napkin calculation suggests that new rates will add about $60 to $70 to a net metering bill for a 5-kilowatt array by 2020, wiping out more than two-thirds of the monthly savings or more.

By 2020 some owners of older solar panel arrays, which lose generating power over time, might have a liability instead of an asset on their hands, costing more to haul the panels to the dump than they save on power bills.

Yes, the standard net metering contract contains this clause: “Utility’s distribution tariffs may be amended by the PUCN at any time.” Who could have anticipated this kind of bait and switch when the powers that be were all preaching green energy all the time to save the planet?

tarrif

NV Energy should pay more for power from rooftop solar panels, not less

Backyard solar panel installation.

In a letter to the Las Vegas newspaper today a reader makes the argument that owners of rooftop solar panels are not selling power to NV Energy at retail rates, as the company argues, but are rather banking power for use at another time.

The letter was in reply to a Review-Journal editorial that swallowed the power company claim non-solar panel owners are subsidizing those who can afford to install solar panels.

“NV Energy is not buying my excess; rather, the relationship is more like a bank account. I deposit my excess energy with NV Energy when I have it, and withdraw it during the months I need it,” the letter writer argues.

In July, NV Energy submitted a proposal to the Nevada Public Utilities Commission that would cut the credit for power uploaded to the grid by solar panel owners from 11.6 cents per kilowatt-hour, the standard retail rate, to 5.5 cents per kWh, which is closer to what the company pays for wholesale power. The PUC staff has even suggested making the rates retroactive for existing solar panel owners.

The company argues that a customer who installs solar panels and becomes a so-called net metering customer cuts his power bill by up to $1,181 a year on average, while the utility avoids no more than $519 in purchased power costs.

What everyone seems to be overlooking is that solar panels create excess power that is available for the grid at peak-use times. Power is not publicly traded on the open market at the same price all day long. The higher the demand, the higher the price. Prices fluctuate on the half hour.

Solar panel owners should not be getting less in credits per kWh, but more. In summer months, industrial scale power customers typically pay four times as much for power delivered in the heat of day at peak-demand periods than overnight.

In fact, NV Energy has set up Time of Use (TOU) rate schedules that its customers may choose to opt into. That’s what smart meters are for. Under one payment schedule a residential customer in the summer would pay 36 cents a kWh during peak hours but only 6 cents during off-peak hours. Another schedule with different parameters would charge 50 cents a kWh during summer peak.

For those who are not home during summer peak hours and set their thermostats higher, such a schedule could save money.

Since even NV Energy concedes electricity is worth more at the very time solar panel owners are providing it, perhaps the PUC should require the company to pay more, not less. Makes perfect sense.

Time of Use residential rate schedules from NV Energy.

Time of Use residential rate schedules from NV Energy.