Net metering battle heats up as NV Energy proposes reduction in credits

NV Energy and Nevada's solar lobby are poised to clash yet again after the utility company proposed reducing the credit for rooftop installations once the state's solar cap is reached in the fall.

NV Energy submitted its proposal to the Public Utilities Commission of Nevada late Friday, recommending a reduction from the 10.4-cent credit received by solar customers to 4.7 cents. The utility also asked to be allowed to start billing under the proposed rate on Sept. 15. Advocacy groups such as The Alliance for Solar Choice have been lobbying for incentives to stay the same under current net metering rules until the PUC establishes new rates for the industry by Dec. 31.

The debate became even more heated after NV Energy announced that the state's 235-megawatt limit on solar installations eligible for the current incentives will be reached earlier than expected. During hearings at the Nevada Legislature about net metering, NV Energy stated that it expects the cap to be reached in March 2016. The projection was contested by the solar lobby, which projected that the limit would surpassed this summer. By early July, NV Energy change its own estimate to the first week of September, earning strong comments from the state's rooftop solar industry.

"NV Energy's faulty accounting puts thousands of local jobs and consumer choice at risk," said Bryan Miller, co-chairman of The Alliance for Solar Choice, at the time. "Now it's up to the Commission to clarify matters and prevent disruption to a market that employs more than 6,000 Nevadans."

Following its Friday filing, however, NV Energy pushed back against the criticism of its previous estimate as well as accusations from the solar lobby of shady projections. Kevin Geraghty, vice president of energy supply for the utility, pointed to a steep increase in rooftop solar installations in the last few months.

"If you go back and look at the first quarter of this year, there were somewhere around 300 applications a week," Geraghty said. "Those accelerated in May and June to around 500 to 600 applications, and we hit a week in July where there were 700 applications."

NV Energy's filing, which was required under the terms set by Senate Bill 374 in the last Legislative session, puts the next stage of the net metering saga in the hands of the PUC. The commission has wide latitude on how it chooses to handle the NV Energy filing and can choose to accept it or decide to keep the credits at the current rate until its December decision. Should NV Energy start billing at its proposed rate and the PUC opt to set a higher credit in the future, NV Energy also can reimburse customers retroactively for the difference, Geraghty said.

The time frame for reaching the solar cap was a hot button issue during Legislative hearings about net metering. At the time, SolarCity CEO Lyndon Rive testified that getting it wrong in relation to the credits would do significant harm to the industry.

"If NV Energy is correct (about its projection), this is a non-issue," Rive told lawmakers. "If NV Energy is wrong, (there will be) massive devastation."

NV Energy questioned the impact on solar jobs and said its proposed rules will help customers undergo a smooth transition until the PUC makes its final ruling at the end of the year. The company also said that its rate proposal is meant to ensure that non-solar ratepayers do not end up subsidizing solar customers.

"Net energy metered customers use more than the average customer as far as energy goes," Geraghty said. "Also, the nation's second largest solar rooftop installer out of Utah, Vivint, announced it's coming to Nevada … so that's a good sign that there will be a sustainable future for rooftop solar jobs."

The Alliance for Solar Choice, meanwhile, continued to push back against NV Energy's proposal, calling it "extreme and unprecedented." The group was especially critical of NV Energy's proposal to add a demand charge for solar, which the utility says goes toward the company's investment on infrastructure such as transmission and distribution facilities. The Alliance for Solar Choice pointed to Arizona as an example, saying rooftop solar applications dropped significantly after adopting a similar demand charge.

"NV Energy's proposal would mean the certain end of Nevada's rooftop solar industry," said Will Craven, spokesperson for The Alliance for Solar Choice. "It would be tragic if (the) Public Utilities Commission allows Nevada to go from number one in solar job creation, to number one in solar job elimination."