Nevada PUC Changes Tune On Rooftop Solar
On Dec. 22, 2016, exactly one year since the Public Utilities Commission of Nevada (PUCN) ruled to eliminate retail net energy metering (NEM) in the state, the commission voted unanimously to restore retail NEM in northern Nevada. Led by a new chairman, the recently reshuffled commission unanimously made the decision as part of a general rate case for Sierra Pacific Power Co., NV Energy’s subsidiary that serves northern Nevada. Although solar advocates have applauded the decision, NV Energy has contested the ruling.
Nevada has been a major solar battleground state ever since the PUCN voted in December 2015 to drastically cut NEM compensation rates from retail buyback rates to wholesale ones. Rooftop solar companies, including SolarCity and Sunrun, blamed the decision for the need to shutter their Nevada operations and cut jobs. Furthermore, the PUCN initially denied grandfathering in pre-existing solar customers under the original NEM rules, but the regulators eventually struck a grandfathering deal in September.
Effective Jan. 1, 2017, the PUCN’s policy reversal reinstated retail NEM in Sierra Pacific’s territory for a three-year period and set a 6 MW cap of new rooftop solar. According to Jon Wellinghoff, former Consumer Advocate for the State of Nevada and current SolarCity chief policy officer, the decision is expected to benefit about 1,000 to 1,500 customers.
“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,” says Wellinghoff in a statement.
Vote Solar and Earthjustice, nonprofit organizations active in the docket, applaud the progress and encourage Nevada’s leaders to establish a longer-term plan for expanding solar opportunity once and for all.
“The commission took a small but important step toward re-aligning rates with the goals that state policymakers and the people of Nevada share – to see more homegrown solar powering their communities and their economy,” says Vote Solar’s Jessica Scott in a press release.
Gov. Brian Sandoval, a critic of the 2015 NEM cuts, recently reorganized the PUCN by appointing two new commissioners to the three-member panel. Joe Reynolds took over the chairman position for Paul Thomsen, who led the original NEM changes but remains a current commissioner.
According to Vote Solar, Chairman Reynolds wrote in the new draft order, “Abraham Lincoln once said that ‘[b]ad promises are better broken than kept.’ The PUCN’s prior decisions on NEM, in several respects, may be best viewed as a promise better left unkept. The PUCN is free to apply a new approach.”
NV Energy has requested that the PUCN reconsider its decision to restore retail NEM in Sierra Pacific’s territory. In a press release, the utility claims the PUCN’s new rule is inconsistent with an agreement NV Energy reached in October 2016. The utility says it worked with a broad coalition of customers and intervenors in the rate case process to reach an agreement meant to lower annual electricity rates for residential and small general service customers by approximately $2.92 million annually, or a total of $8.77 million over the three-year period the current electricity rates are effective. The utility says the agreement provided that these cost savings would be shared across a broad base of northern Nevada electric customers.
NV Energy argues that the PUCN’s order now takes those savings that were intended for a larger customer base and reallocates them to the small subset of future solar NEM customers. At press time, the PUCN has not granted or denied NV Energy’s request. Notably, the commission is slated to address the NEM issue for Nevada Power, NV Energy’s subsidiary serving southern Nevada, in June.
Ohio’s RPS Freeze ‘Has Finally Thawed’
Gov. John Kasich, R-Ohio, has restored the state’s clean energy mandates after vetoing a bill in December 2016 that would have effectively extended the two-year “freeze” on Ohio’s Alternative Energy Portfolio Standard (AEPS).
In June 2014, Ohio passed a law that made it the first U.S. state to roll back its clean energy standards. Although the AEPS originally required Ohio utilities to procure 12.5% renewables, as well as reach certain energy-efficiency reductions, by 2025, the 2014 law paused those requirements at current levels for two years. Citing cost and implementation concerns, some lawmakers had pushed to repeal the AEPS altogether, but Kasich worked out a compromise to freeze the standards while they were reassessed.
With the freeze slated to expire at the end of 2016, Ohio legislators passed Sub. H.B.554, a bill that would have effectively extended the freeze by turning the requirements for utilities to purchase renewables and invest in energy efficiency into voluntary goals, with no compliance obligations, through 2019.
Kasich had vowed to block such legislation, and in his veto message, the governor references the economic value of clean energy.
“The administration stands ready to work with the General Assembly to advance strategies for helping ensure competitive energy costs. Ohio workers cannot afford to take a step backward from the economic gains that we have made in recent years, however, and arbitrarily limiting Ohio’s energy generation options amounts to self-inflicted damage to both our state’s near- and long-term economic competitiveness,” Kasich explains in the message. “Therefore, this veto is in the public interest.”
In a press release, J.R. Tolbert, vice president for state policy at Advanced Energy Economy, says, “Governor Kasich understands that renewable energy and energy efficiency create jobs and save money. That’s a formula that is good for business and good for every Ohioan.”
Ted Ford, president of Ohio Advanced Energy Economy, adds, “The two-year freeze has cost Ohio jobs and investments. In the last three years, while Ohio has been idling, Michigan has attracted over $1.1 billion in renewable energy investments. With this veto, Ohio can begin to move forward with sensible energy policy.”
In separate statements, Samantha Williams, staff attorney for the Natural Resources Defense Council, says the veto “sends the signal that Ohio is back in the clean energy game,” and Dick Munson, director of Midwest Clean Energy, says, “Ohioans should cheer – it may be winter, but the clean energy freeze has finally thawed.”
Arizona Regulators Vote To Scrap Net Metering
In a 4-1 decision, the Arizona Corporation Commission (ACC) has decided to end the state’s net energy metering (NEM) program. Solar advocates argue the decision will hurt the state’s solar market and put jobs in danger. Meanwhile, in a press release, the ACC says its choice to replace NEM is a landmark decision that protects existing customers while restructuring the methodologies to determine a fair export rate for the future.
Under the approved plan, NEM will be replaced with a lower “export rate” to be determined in the investor-owned utilities’ pending rate cases. In a blog post, Sean Gallagher, vice president of state affairs for the Solar Energy Industries Association, explains, “Compensation under the new methodology would initially be set at around 11 cents per kilowatt-hour for most customers, close to the current retail-rate net metering credit. But that rate will decrease in future rate cases, and new solar customers aren’t protected over the longer term.”
As of press time, one silver lining is that the ACC has re-affirmed its intention to grandfather in solar customers that interconnect prior to the decision in the upcoming rate cases, likely mid-2017. Grandfathering of NEM customers has been a major issue in other states.
“Existing solar customers can rest assured that their investment is safe,” says Commissioner Andy Tobin in the ACC release. “Our decision recognizes those customers while taking the next step by determining rates which take into account advancements in solar and other renewable technology, which helps us push forward proactively.”
According to the ACC, the decision comes after a three-year investigation into the value and cost of solar, which included input from a broad coalition of solar, utility, consumer advocates and customers.
Kim Malfacini, spokesperson for The Alliance for Solar Choice, comments, “We are deeply disappointed that the Arizona Corporation Commission disregarded the full, long-term value that rooftop solar brings to Arizona and the long-term certainty that Arizonans need when contemplating a solar investment. We will continue to advocate for rates and policies that fairly compensate solar customers in Arizona.”
In the ACC’s release, Chairman Doug Little says, “In passing this policy, we have accomplished something historic. We have taken a very important step down a path that I hope will accomplish twin goals. The first is addressing the cost shift that has previously burdened non-DG customers and begin bringing the compensation rates for DG customers in line with current market economics versus the economics of 10 years ago. Second, to do this in such a way that we protect the investment of existing rooftop solar customers, making sure that we do not change the rules on them in the middle of the game.”
Little continues, “What we have done is probably not perfect. The issues are far too complex and divergent to reach a decision that will satisfy everyone, but I believe that we have worked very hard to find a reasonable balance. We now have a meaningful first step that we can build on in the future.”