Nevada task force expected to grandfather pre-existing net metering customers for 20 years

Participants in Nevada net energy metering (NEM), who were already part of that program prior to the end of 2015, will be grandfathered into the prior rate system for 20 years, according to a draft set of proposals from the Nevada New Energy Industry Task Force.

The task force plans to recommend that NEM participants prior to the end of 2015 won’t soon be subject to a rule against “cost shifting” imposed by state utility regulators in December 2015.

That’s according to a copy of a six-page draft report posted on the group’s website on Sept. 27. The task force was supposed to deliver its findings to the governor by Sept.30.

“The NEM program at NV Energy currently has 208.9 MW of installed capacity, provided by 23,737 customers in northern and southern Nevada,” according to the task force draft report.

The Public Utilities Commission of Nevada (PUCN)’s NEM decision has changed reimbursement rates for these customers who made a financial commitment through owned or leased systems.

“Grandfathering these customers under the original terms of the NEM program for 20 years will provide a reasonable amount of time to recoup the investment of these systems,” the task force said in the draft.

In addition, the 208.9 MW is short of the NEM goal to install 235 MW of capacity within the state. “Utilizing a size cap would be difficult to manage administratively under any grandfathering program so an application date should be used to eliminate a lengthy queue,” the task force said.

“Establishing 12/31/2015 as the application cut-off date would allow a maximum of 273.3 MW of installed capacity for NEM Phase 1. This date will provide flexibility for expected attrition of projects and reach the target of 235 MW,” the task force went on to say.

The task force preferred to go with a 20-year grandfather term, rather than 25 years.

In September, a Nevada judge ruled that the Public Utilities Commission of Nevada had acted lawfully to in December 2015 protect non-net metering customers from unreasonable cost shifts.

The judge, however, did say that the Nevada PUC decision to hike rates on existing solar net metering customers earlier in the year was provided the existing customers with inadequate notice. The 20-year grandfathering phase will evidently remedy the court’s concern.

The task force draft report said it will recommend proposals in the 2017 legislature to reduce demand and reduce carbon-price risk. Certain changes will also be called for in Nevada’s integrated resource plan (IRP) proves.

Governor instructed task force to tackle net metering, clean energy

Nevada Gov. Brian Sandoval (R) ordered the task force to look at net metering earlier this year.

The task force’s 2016 work was meant to encourage development of clean energy sources and integrate renewable energy technology into Nevada’s energy sector. The task force policy is also supposed to foster creation of a more modern and resilient grid.

It is also supposed to support distributed generation and energy storage – with a specific emphasis on rooftop storage and net metering.

The task force began its work on the subject with a session in March that included presentations from the PUC as well as NV Energy, which is a Berkshire Hathaway Energy company.

The Nevada Legislature first defined net metering in 1997 as “measuring the difference between the electricity supplied by a utility and the electricity generated by a customer-generator which is fed back to the utility over the applicable billing period.”

The amount of net metering in Nevada has gradually grown over the years, hitting 3% of peak capacity of all utilities in 2013. The limitation was changed to 235 MW in 2015.

The Nevada PUC did a numbers of studies concerning net metering and its cost of service, rate design, benefits and if there should be different treatment of net metering customers that come in after the 235 MW cap.

NV Energy noted during March presentation to the task force that its utility subsidiaries Nevada Power and Sierra Pacific Power together have more than 6,000 MW of owned generation. More than Two-thirds of the generation (68%) is gas-fired. Renewables account for 22% (including power contracts) and coal 10%.

Nevada has a renewable portfolio standard that is currently 20% of load moving to 25% by 2025. Nevada is one of the highest geothermal and solar producers per capita.

NV Energy is voluntarily participating in the Energy Imbalance Market in connection with the California ISO (CAISO). The new market enables existing resources to be shared between balancing areas.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 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. Wayne can be reached at wayneb@pennwell.com.