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Nev. PUC asked to deny SolarCity's petition to examine net metering benefits study

The Public Utilities Commission of Nevada is being advisedto deny SolarCity Corp.'spetition to open an investigation to examine an update of a disputed earlierstudy on the costs and benefits of net energy metering, or NEM.

The state Legislature, through Assembly Bill 428, in 2013ordered the PUC to have an independent third party analyze the costs andbenefits of NEM. The PUC hired Energy+Environmental Economics E3 Consulting todo the study, which was released in July 2014 and NEM offered few macroeconomicor environmental benefits.

Ballot questions, legal challenges and calls for legislationconcerning the value of distributed solar energy prompted the LegislativeCommittee on Energy to askthe PUC on May 2 for an update of that study. In the meantime,SolarCity and the Natural Resources Defense Council on May 24 their own cost-benefitstudy concluding rooftop solar provides benefits for all customers.

However, E3's study update filed with the PUC on Aug. 17 concluded that thepresent 265 MW of rooftop solar installations in Nevada causes a cost shift ofabout $36 million per year at the expense of non-solar customers. "Overall,for the state of Nevada, NEM generation is a costlier approach for encouragingrenewable generation than utility-scale renewables," E3 concluded.

SolarCity said the legislature's request that the initial E3study be updated reflects the need to continue evaluating the costs andbenefits of NEM, and that E3's update should be considered a draft until it isexamined by SolarCity and other stakeholders in a PUC proceeding.

In a memorandumfiled Oct. 10, the PUC's office of general counsel concluded otherwise andrecommended that the commission deny SolarCity's petition. The PUC is scheduledOct. 12 to issue an order to grant, deny or modify SolarCity's petition or setthe matter for further proceedings.

SolarCity had been a leader in installing rooftop solarsystems in Nevada, but closed its operations in the state after the PUC endednet metering for new customers in late 2015. Recently the commission reversedits decision to phase out net metering for existing customers as well.

According to SolarCity, the PUC must conduct a proceedinglike that described in A.B. 428, which established the legal framework forevaluating NEM costs and benefits. It therefore insisted that all stakeholdersand interested parties be allowed to examine the basis for the conclusions theupdated study reached, noting that only NV Energy Inc. and the PUC staff were allowed toparticipate in the E3 update.

SolarCity found an ally in the Bureau of ConsumerProtection, which urged the PUC to grant SolarCity's petition and open a newinvestigatory docket for the E3 update in the interest of promoting greatertransparency.

NV Energy countered that in requesting the update theLegislative Committee on Energy did not direct the PUC to reinvigorate thestakeholder process described in the statute but just wanted the study to beupdated.

The PUC staff agreed that all the legislative committeewanted was for E3 to provide some limited data updates so that the resultscould be compared side-by-side with those in the prior study. The requirementsof A.B. 428 were met in the E3 study, and the legislative committee has noauthority to change the law, staff maintained.

In addition, the PUC staff noted that NEM is being vetted inthree other dockets: NV Energy subsidiary Sierra Pacific Power Co.'s application to adjust itsgeneral rates, the utility's request for approval of new and reviseddepreciation and amortization rates, and the utility's application for approvalof its triennial integrated resource and energy supply plans.

"SolarCity's petition is a red herring designed tocreate controversy where none exists," staff added. Itasserted that NV Energy has all the data on who its customers are; when and howmuch electricity those customers use; where the utility gets its electricity;and the costs of purchasing, generating and distributing that power. "Noone has better information about these details than NV Energy," staff said.