In an effort to provide federal protections for rooftop solar customers, Sens. Harry Reid and Angus King introduced language that would regulate how utilities could change rates for customers who receive credits for generating excess electricity under a program known as net metering.
The move comes at a time when utilities and regulators in several states, most notably in Nevada, have sought to raise rates for solar customers. In December, the Public Utilities Commission of Nevada increased bills for solar customers, arguing that it would eliminate a cost shift to other ratepayers. It raised fixed fees and slashed the value of net metering credits over four years.
Before the new rules, rooftop solar customers had been reimbursed for the excess electricity they generated at the retail rate — what customers pay for electricity from NV Energy, or about 11 cents per kilowatt-hour. When the new rates are fully implemented by 2020, Nevada solar customers will receive what NV Energy pays for electricity, about 2.6 cents per kilowatt-hour.
That decision, which was applied to existing customers, prompted an outcry from solar advocates and several national companies to lay off hundreds of employees as it halted installations here.
Reid and King’s proposed language, introduced as an amendment to an energy bill last Thursday, would make it significantly more difficult for regulators and utilities to change rates for existing net-metering customers. This would be done by amending the Public Utility Regulatory Act of 1978.
Several solar groups, including Sunrun, applauded the measure and urged its passage.
"By blocking this amendment, utilities are trying to take away consumers' ability to make their own energy decisions,” the Solar Energy Industries Alliance said in statement. "The King-Reid amendment would protect hundreds of thousands of Americans who have already invested in solar systems for their homes and businesses by preserving their rights to sell power back to the electric grid."
One component in the amendment would require regulators to demonstrate "that the current and future net benefits of the net metered system to the distribution, transmission, and generation systems of the electric utility are less than the full retail rate."
A group representing utility commissioners released a statement Tuesday critical of that clause, saying it would make it near impossible for utilities to offer compensation at anything below the retail rate. It said many of the 43 states with net metering are currently reviewing whether to offer the retail rate.
“This amendment enshrines as a default that (solar customers) should be compensated at the full retail rate for electricity service,” said Travis Kavulla, president of the National Association of Regulatory Utility Commissioners.
He said the amendment would “make it impossible to change (the retail rate) without undertaking a proceeding that conforms to the highly specific procedural standards the amendment establishes.
Solar advocates praised the amendment because it included language that would require regulators to consider "societal value” of rooftop panels when determining rates for future solar customers.
The Americans for Tax Reform oppose the measure claiming that it infringes on state sovereignty.
If the amendment is successful, it is unclear what immediate impact it might have on Nevada. The utilities commission, NV Energy’s regulator, is in the process of weighing appeals of its decision, including whether to allow existing rooftop solar customers to keep prior rates for a period of time.
"This amendment is good for consumers in Nevada and across the country,” Reid said on the Senate floor Wednesday. "It will safeguard people who want to generate their own clean energy from retroactive rule changes that could devastate their finances."