Nevada court gives environmental groups partial victory on net metering

Earthjustice and Vote Solar have won partial victory in their challenge to a Public Utilities Commission of Nevada ruling on state solar policy earlier this year.

On Sept. 12, the Nevada State District Court for Carson City agreed with Vote Solar and ruled that a PUCN decision to hike rates on existing solar net metering customers earlier this year were made through an unlawful process that left existing solar power customers with inadequate notice and did not satisfy the due process clause of the Nevada Constitution., the environmental organizations said in a Sept. 14 news release.

The PUCN’s decision had raised fees and significantly reduced the rate at which solar customers are credited for their valuable excess power. This rule change adversely impacted future customers as well as the thousands of Nevadans who had already invested their own dollars in local solar power, the environmental groups said.

The court’s decision forces the PUCN to protect the consumer investments that have already been made in solar energy; however, it does not go so far as to preserve solar options for new customers in the state.

“The commission is pleased that the court affirmed the commission’s order on all substantive issues related to net energy metering (NEM) rates,” the PUC said in a Sept. 14 statement.

“The court confirmed that the commission acted lawfully and that the decision to protect non-NEM customers from unreasonable cost-shifts was based on substantial evidence,” the PUC said.

The PUC went on to say that it would promptly vote on whether to accept a stipulation that would make the revised net metering rates inapplicable to those pre-existing NEM customers for a period of 20 years.

Since 1997, Nevadans have participated in a program called net metering under which customers earn a kilowatt-hour bill credit for each kilowatt-hour of clean power they supply for their neighbors to use. The PUCN’s decision ended net metering for Nevada’s homes and small businesses and replaced it with a new system that values customers’ clean energy at lower rates

The Vote Solar and Earthjustice lawsuit challenged the legality of three aspects of the PUCN decision: that it was inconsistent with Nevada state statute, which requires that utilities offer net metering to solar customers; that the analysis that the PUCN used to determine new rates openly lacked sufficient evidence; and that the PUCN violated existing solar customers’ constitutional due process rights by transferring them to a new tariff without adequate notice.

The court ruled in Vote Solar’s favor on the last of those three points, requiring the PUCN to reconsider its decision to change the rules for existing solar customers.

Senate Bill 374 had given the PUC discretion to set different rate classes for net metering customers and to determine whether the new metering rates should be applied to existing net metering customers. The policy addresses the hotly-debated issue of allocation of “fixed costs” for upkeep of the electric grid.

The PUC found that a shift in costs from distributed energy generator customers to other customers was unreasonable.

The Nevada PUC had identified “cost-shifts of $623 per customer-generator” in Nevada Power’s service area and $471 per customer-generator in Sierra Nevada’s service territory.

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Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 22 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants.

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