Nevada utility regulators took an unusual step toward reversing their prior decision-making on net energy metering, or NEM, of rooftop solar customers by reopening NEM to customers in Sierra Pacific Power Co.'s service territory.
The Public Utilities Commission on Dec. 22 ordered the reopening starting Jan. 1, 2017, of 6 MW of installed capacity for rooftop solar systems under prior net energy metering terms and rates for customers of the NV Energy Inc. subsidiary in northern Nevada who wish to install new solar systems. The capacity opening would allow an estimated 1,175 new customers to get retail rate credits under the NEM tariff that was in effect until Jan. 1 of this year.
In making that decision the PUC basically said commissioners had mistakenly closed NEM to new customers in a series of decisions in late December 2015 and early this year. The first decision to kill net metering was made Dec. 22, 2015, a year ago to the day of this decision.
"The benefits NEM customer-generators provide to the grid need to be better identified and understood," the commission said in its latest order.
The PUC said by its order it is taking a measured approach. A total of 1,208 NEM applications were submitted in the three-year period ending in 2015, with 983 NEM applications in 2015 alone. Allowing up to 6 MW of new applications will allow the rooftop solar industry "to restart and regrow in northern Nevada," the order concludes. (PUCN Docket No. 16-06006, 07, 08, and 09)
PUC Chairman Joe Reynolds wrote the order. Gov. Brian Sandoval appointed Reynolds in October. Immediately prior to his appointment to the PUC, Reynolds was Sandoval's general counsel.
In remarks just before the order was passed on a 3-0 vote without any substantive changes, Reynolds noted how controversial the prior commission actions had been. "Something I believe Governor Sandoval expected of me in appointing me as chairman of the commission was to try to bring the old-fashioned Nevada temperament of cooperation and common sense back into these discussions," the chairman said.
Reynolds said rooftop solar has value in Nevada, even if that value cannot yet be entirely quantified. He said he shares the governor's vision to encourage innovation in clean energy. "The old ways of thinking about rate design and problem-solving are challenged and colliding with the new ways of looking at a world of exciting innovation," he said.
Commissioner Paul Thomsen, who had pushed for ending retail rate credits for net metering a year ago, said he concurred with conclusions of Reynolds' order that rooftop solar customers belong in a separate rate class and that there will be only a marginal cost deviation for non-solar customers due to the low amount of rooftop solar customers in northern Nevada.
Thomsen noted the PUC previously had to evaluate the NEM rate policy statewide apart from specific rate proceedings. However, the commission's previous orders concluded rooftop solar rate credits should be based on utility-specific, updated cost-of-service studies as part of individual rate cases and the latest decision is one of those, he said.
Based on the specific findings that the limited reopening of net metering will have a negligible impact on non-solar customers as part of Sierra Pacific Power's request to adjust its general rates, Thomsen said he supported the order.
Solar Energy Industries Association Vice President of State Affairs Sean Gallagher said shortly before the order's approval, "It is a good first step back into the market in Nevada. It is a pretty modest start, but the northern Nevada electricity market is not that large. It gives us some reason for optimism for the upcoming Nevada Power Co. rate case in which similar issues will be presented."
Jon Wellinghoff, the chief policy officer for SolarCity Corp. and Nevada's former consumer advocate, said in a statement, "I commend the Public Utilities Commission of Nevada for bringing full retail net metering back to Northern Nevada, and affirming that whether solar customers are providing clean solar energy for their own homes, or supplying it to their neighbors, the benefits of that local generation outweigh the costs."
Not only is the solar community optimistic it will get a more fair hearing before the new commission, there is support from Sandoval through his New Energy Task Force, which has recommended that full retail net metering be restored, providing a minimum bill is assessed so solar customers pay their fair share for using the grid. The legislature will start its 120-day 2017 session Feb. 6.
NV Energy is a subsidiary of Berkshire Hathaway Energy.