Regulators vote to phase in solar rate hike more slowly

LAS VEGAS — The Nevada Public Utilities Commission has voted to phase in higher rates for rooftop solar customers over a longer period of time than previously approved.

Regulators voted 3-0 on Friday to implement the new rates over 12 years, rather than four years.

Commissioners approved new rates in December for customers who use net metering, or sell excess energy from their solar panels back to the utility.

Regulators say the rates better reflect the declining cost of solar power and phase out a subsidy traditional energy customers pay to support a much-smaller group of rooftop solar customers.

Solar customers say it means their panels will take years more to pay off. Solar companies have responded by laying off employees and staging large protests outside PUC meetings.

Hundreds of people are expected to show up to a Nevada Public Utilities Commission meeting Friday where regulators plan to vote on how to phase in higher rates for existing solar customers — a key struggle in a high-profile debate that’s even drawing attention from presidential candidates.

Regulators approved a rate hike for solar customers at the end of last year as a way to phase out a subsidy they say traditional customers pay to support solar users. The original plan called for rates to take effect over four years, but a preliminary order up for consideration Friday would extend that timeline to 12 years and address a key concern from existing customers — that their systems will now take years more to pay off.

“The 12-year timeframe enables (solar) ratepayers to maximize the value of their (solar) systems by providing time to adjust usage patterns,” wrote Commissioner David Noble.

But the proposal isn’t placating rooftop solar companies, many of which laid off workers and quit their Nevada sales operations as a result of the rate hike. They say the state incentivized rooftop solar investments in the past and is now pulling the rug out from under solar users and companies.

“Noble’s contortionist twisting of the law belongs in a Vegas Cirque du Soleil show, not the halls of government,” said Brian Miller, an executive with solar panel installer Sunrun and a vocal critic of Nevada’s governor, who appoints commissioners but said he won’t meddle in their regulatory work. “Brian Sandoval’s legacy will be letting his hand-picked commissioners eliminate a booming industry while he complicitly stays silent.”

Nevada lawmakers passed a bill this spring asking the commission to set new rates for solar users once the state hit a statutory solar capacity cap. Regulators finalized the higher rates in December, and parties upset with the decision have filed lawsuits, offered hours of biting public comment at regulatory meetings and launched an effort to repeal the underlying law by ballot initiative.

Democratic presidential candidate Bernie Sanders has tweeted his support for solar advocates’ fight, while his primary opponent Hillary Clinton has backed a federal effort to address the Nevada issues and similar fights taking place in other states.

“Utilities should not be allowed to penalize consumers with retroactive rule changes that cause financial hardship and slow the transition to a clean energy economy,” Clinton said in a statement Thursday.

Meanwhile, utility regulators accuse rooftop solar companies such as SolarCity for failing to make clear in their sales pitches this past year that a rate change was in the works and could change customers’ return-on-investment calculations. They also say it’s unfair for 98 percent of utility customers to bear costs for the 2 percent who have solar systems.

“It appears that some small-scale (rooftop) solar vendors advertised unrealistic payback periods,” Noble wrote in the draft order. “The commission will not reward the bad behavior of some small-scale (rooftop) solar vendors by requiring non-(solar) ratepayers to subsidize (solar) ratepayers for longer than is necessary.”

Rooftop solar advocates, who question the premise that traditional customers are subsidizing solar customers, have accused commissioners of being beholden to NV Energy and guilty of corruption during public comment periods at regulatory meetings.

An attorney representing the PUC says the tension has escalated to the point that commissioners are getting threats for their decision, and regulatory staff members are uneasy coming to work because of people arriving at meetings open-carrying firearms. PUC General Counsel Carolyn Tanner said solar companies are inciting people and need to dial down their message.

“I think they need to tone down the rhetoric,” Tanner said. “I think it’s very dangerous.”