On February 12, Nevada's Public Utilities Commission (PUC)
voted to alter its December 2015 ruling that will dramatically,
and retroactively, reduce the rate at which distributed solar
generation facilities will be paid for electricity produced –
agreeing to implement its ruling over 12 years instead of the
original four years. The battle before the Nevada PUC pitted NV
Energy, the state's largest utility, against thousands of
residents who have installed solar arrays over the last few years,
as well as those who want to (and, of course, companies like Solar
City, Sunrun and Vivant that want to help them do so).
The Nevada PUC determined in December that the
current US$0.11-12/kwh net metering rate (the retail rate customers
currently pay for electricity supplied) would be reduced to less
than US$0.03/kwh (roughly Nevada's wholesale rate) over four
years, including for solar facilities already installed. Solar
industry proponents argued this change would stop new installations
(Solar City announced it would terminate its 550
Nevada employees), and make existing distributed solar
facilities uneconomic to their owners. As well, the Nevada PUC
approved a new fixed charge increasing to US$25-30 per month for
distributed generation customers.
The challenges of integrating large amounts of distributed
generation capacity aren't limited to Nevada. In October 2015,
the Hawaii PUC eliminated retail net metering for
new installations. Solar installations are installed on
approximately 17% of all buildings in Hawaii, and the net metering
program has achieved 60X its original intended target. Last month,
California's PUC resisted the application of
its three largest electrical utilities to reduce the net
metering rate to a wholesale price and to institute a monthly fixed
charge on new solar facilities. Instead, it agreed to institute a
small charge for grid-supplied electricity to solar customers, a
one-time US$75-150 interconnection fee and time-of-use pricing for
net-metered customers. It will re-evaluate its decision in 2019 as
the sector evolves. San Diego Gas & Electric expects to reach
its net metering cap this summer, at more than 600MW of distributed
generation. Recently, Vermont halted new distributed solar
installations – its utilities had hit the 15% peak load cap
set by their regulator.
More than 30 U.S. states have net metering policies and, with
the recent five-year extension of the investment tax credit,
distributed solar installations should continue at a brisk pace.
Views of regulated utilities and renewables proponents (including
those of U.S. Presidential hopeful Bernie Sanders, who this week commented negatively on the Nevada
PUC decision) on how best to integrate distributed generation
are unlikely to align any time soon. In fact, more than two dozen
U.S. states are currently looking at changes to charges or rates
applicable to distributed generation facilities. As regulators in
other jurisdictions (including
Ontario) look to adopt or revise net metering regulations to
appropriately 'value' distributed generation, watching how
the issues are presented before and resolved by U.S. state
regulators should be 'must see' viewing.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).