Nevada regulators may consider ‘grandfathering’ solar users

The Nevada Public Utilities Commission indicated it might budge on its much-protested decision to apply new, higher rates to rooftop solar power customers who bought their systems in years past.

Commissioner David Noble submitted a draft order Wednesday, saying there wasn’t enough information on whether so-called “grandfathering” would be a good idea and calling for reconsideration of the matter. The commission is expected to decide Monday whether to proceed with Noble’s proposal.

At state lawmakers’ request, regulators created a new pricing structure that took effect Jan. 1 for net metering customers — people with solar panels who sell excess energy back to the utility company. The rates, which phase in in five annual steps, raise a basic service charge and reduce the amount the utility company pays solar users for their extra power.

The move is aimed at eliminating a subsidy traditional customers pay for about 17,000 net metering customers, although some solar panel sellers say it makes their business model unworkable and announced hundreds of layoffs in Nevada in response.

Commissioners applied the rate hike both to future solar customers and those who started using net metering over the past two decades. They argue that a single rate structure is the way to truly phase out a cost-shift and say it precludes tricky questions like whether customers should continue to get old rates if their old solar system breaks down or if a new owner moves into a house with older solar panels.

Many current customers are upset, saying they invested tens of thousands of dollars into panels based on rate calculations that are now moot, and will have to spend years more paying back the costs.

“The decision was a massive bait and switch,” said Lyndon Rive, CEO of solar panel company SolarCity. “After encouraging thousands of Nevadans to go solar, the government dramatically increased their costs after the fact.”

Some solar customers testified they were surprised that they weren’t “grandfathered” into the prior, favorable rates, although commissioners said that possibility was a clear part of the bill lawmakers passed last spring, and questioned whether solar panel sellers downplayed or failed to mention that prospect.

The Bureau of Consumer Protection within the Nevada Attorney General’s Office requested that grandfathering be reconsidered, noting that it’s been done elsewhere including in Hawaii a few months ago. Noble’s draft order would grant the bureau’s request.

Noble’s order asks interested parties to answer a list of questions about grandfathering, including whether it accomplishes the Legislature’s policy goals of establishing a sustainable and self-sufficient solar industry in Nevada and whether it stimulates economic growth.

He also asks who would benefit and who would be hurt by grandfathering, whether dollars paid for the solar system would be leaving the state, and which of the current customers should be eligible for grandfathering.