David Noble, now the outgoing chairman of the Nevada Public Utilities Commission, in his address at the National Association of Regulatory Utility Commissioners (NARUC) meeting, elaborated about the ongoing Nevada net metering battle, “…just as a caution for commissioners around this table about who you’re dealing with and what’s going on.”
As reported by UtilityDIVE, Noble told the regulatory audience it was the solar industry which had failed to constructively engage with the regulatory process.
“One of the problems in the case before us is the rooftop solar companies decided to take an approach of an all-or-nothing, and basically promoted that there should be no change from retail rates,” he told fellow regulators. “When you take an all-or-nothing approach there’s a possibility you’re going to lose and that’s exactly what happened because they put on an inferior case.”
The contentious Nevada net metering battle has had consequences for many, including the departure of rooftop solar installer SolarCity and Sunrun, numerous lawsuits against the Nevada PUC, and news Gov. Brian Sandoval (R) will not reappoint Noble to another term at the end of this year. Noble elaborated:
“I just caution all commissioners to listen to all sides but be very wary,” Noble said. “Words are one thing, actions are another.”
Snapshot: The Nevada net metering story
In the spring of 2015, Noble said he got a call from a legislative leader saying they were struggling with the net metering issue and were thinking about kicking the issue over to the PUC. In May, the signing of Senate Bill 374 did just that — ordering the PUC to devise a replacement for retail rate net metering that did not impose unreasonable cost shifts onto non-solar customers.
Solar companies supported the bill, stating net metering decisions should be made at the PUC, Noble said. But after the fact, they criticized the timing of the bill, saying they had no choice but to support it.
“Within three weeks of that legislation of being passed, the CEO of SolarCity contended the PUC was in the back pocket of the utility,” Noble said.
The net metering decision
After hearings and acrimony, the PUC issued its net metering decision on the last business day before the winter holiday break.
In the order, regulators approved new rates that increased the monthly charge for solar-owning NV Energy customers from $12.75 to $17.90 and decreased their volumetric rate from $0.111/kWh to $0.108/kWh.
Regulators then applied the lowered net metering rates not just to new solar customers, but existing ones as well. All previous net metering reforms, analysts told Utility Dive at the time, had “grandfathered” existing customers, allowing them to keep their originally-contracted incentives.
Despite that, Noble told the NARUC conference his commission’s net metering reform was well within the mainstream of solar policy, and included many elements of net metering policies that solar advocates support.
“We rejected demand charges, we instituted optional time-of-use rates and we essentially phased in over 12 years value-based rates for that excess [rooftop solar] energy,” Noble said. “That’s not what you hear in the press, that’s not what you hear in discussions with people with vested interests on one side of what we did.
“We also put net metering customers in a separate rate class because they’re partial requirement customers,” he added. “That’s pretty basic in my mind.”
After the decision, rooftop solar companies charged that the commission ignored the benefits of rooftop solar to the utility grid. Quite to the contrary, Noble said the solar industry failed to present evidence on those very benefits.
After the December decision, NV Energy proposed amending the ruling to include a grandfathering provision. But the PUC stuck to its guns, approving a draft proposal written by Noble that extended the timeline for rate changes, but did not protect existing customers from lower remuneration.
Gov. Sandoval panned the decision.
“While I have respected the Commission and its deliberations by not influencing its process, the PUC did not reach the outcome I had hoped for,” he said after the vote. “Today’s decision does not go far enough to protect [existing solar owners’] interests.”
In the wake of that vote, Sandoval convened a group called the New Energy Task Force to move past the acrimony of the net metering debate. In May, that group revealed its first round of recommendations, including a grandfathering provision for rooftop solar customers.
Fallout from the decision
Whether or not Noble’s leadership on the net metering issue cost him the governor’s favor, the commissioner has already had to deal with a great deal of fallout from the decision. At one PUC meeting, commissioners had to be ushered out when observers carrying firearms attempted to enter a commission meeting. (Nevada is an open carry state.)
“I read articles about the situation in Nevada being toxic, and … that somehow the commission’s decision was based on retaliation,” Noble said. “That is absolutely offensive. That’s not what I do. I base the decisions on the law, facts and evidence and that’s what my fellow commissioners do.”
Noble expressed frustration with the media trope that the PUC decision was “disastrous” for rooftop solar. In its aftermath, SolarCity and Sunrun ceased operations in the state, but Noble said the real disaster was a push from solar companies to put pressure on the commission by signing up tens of thousands of new customers in the run-up to the net metering fight.
“After [SB 374] legislation was passed, rooftop solar companies came in and flooded the market with installers and salesmen and they signed up 25,000 more people in six months,” Noble said. “That’s a train wreck waiting to happen, knowing that we’re mandated to review the costs and benefits of rooftop solar and come up with rates that represent no unreasonable cost shifts.”
In recent months, some large solar companies and groups have taken steps to appear more collaborative, and less combative, on utility-solar issues. SolarCity, for instance, brought in former FERC Chair Jon Wellinghoff to lead their policy team, while TASC and Sunrun fired both Bryan Miller, the controversial executive who drew Noble’s ire in Nevada.
But the solar companies are still backing a referendum to “overturn the commission’s decision and lift the cap on net metering and go to retail rates for compensation,” he added. That referendum was recently cleared for the November ballot.
“That does not seem to be consistent with what they’re saying that they want to engage with the commission and the process and get to value-based rates,” Noble said. “It will be interesting to see in Nevada over the next few months what’s going to happen.”
While the current net metering decision may be held up in the courts, new information will soon be available that could help influence the debate, Noble said.
As for the future of net metering, stay tuned for the upcoming election. Many around the globe will be watching.
Of interest, NV Energy filed a proposal this week to grandfather rooftop solar customers into Nevada’s original net metering rates for 20 years, the Las Vegas Review-Journal has reported. The new net metering policy approved earlier this year reduced the remuneration rate paid to distributed solar owners and put all new and existing users on the new rates.
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