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 be 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 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.
The devil is always in the details.