The titans in this case are billionaires Warren Buffett, whose companies own Nevada’s largest electricity provider NV Energy, and Elon Musk, chairman of SolarCity, which installs rooftop solar panels that allow customers to purchase less electricity from Buffett.
NV Energy managed to get the state Legislature to change the law regarding rooftop solar panels and then convinced the state Public Utilities Commission (PUC) to drastically increase the connection fees charged solar panel owners and drastically reduce the reimbursement rate for power uploaded to the grid from those solar panels, which is called net metering. The ruling applies not only to new solar panel installations, but also to the 17,000 who previously installed solar panels with an implicit state promise of being able to earn a return on investment, which now is no longer possible for many. The new rates are being phased in over 12 years.
Though the rule changes are specific to NV Energy they have the potential to affect power prices and policies for other power providers in the state.
As an outgrowth of this struggle two measures have qualified to be on the statewide November ballot after garnering qualified signatures of more than 55,000 voters.
Question 3 on the ballot would amend the state Constitution to prohibit power company monopolies by 2023. The approved description of the amendment as circulated for signatures reads, “This petition prohibits a legalized monopoly for electric utility generation and gives Nevada electric utility customers the right to choose their service provider from an open retail market based upon price, reliability, and other important factors. This includes the right for these persons, businesses, associations, and other entities, whether on their own or in conjunction with others, to produce their own electricity from renewable energy sources or other sources, and to sell that electricity on the open market.”
Elon Musk and Sen. Harry Reid are listed by Ballotpedia as supporters of the amendment.
Question 5 would essentially repeal the PUC’s tripling of connection fees for solar panel owners and cutting reimbursement for uploaded power to one quarter of the previous rate. SolarCity and Reid are listed as backers.
Whether Question 5 will remain on the ballot will be determined by the Supreme Court, which has a scheduled a hearing on the matter for this week. A lower court judge has held that the matter, which substantially changes state law, should first go before the 2017 Legislature and then before the voters in 2018.
Both measures have the potential to alter the power market in Nevada. The voters may decide which titan wins.
In a case of the right hand not knowing what the left hand is doing, the Governor’s Office of Economic Development enticed Musk’s SolarCity to open operations in Nevada by offering $1.2 million in taxpayer money to create new jobs — $800,000 of which was already paid out when the PUC altered the playing field for solar panel firms and SolarCity responded by laying off most workers and shutting down most operations. Other companies have done likewise and rooftop solar panel installations have practically disappeared.
The PUC bought into the argument that solar panel owners used less power and therefore weren’t paying a fair share of the basic infrastructure costs, even though the only difference between solar panel owners and those who are just frugal is that solar panel output can be measured. They also agreed solar panel owners should not be paid the current retail rate for uploaded power, while ignoring the fact solar power is uploaded at peak power usage times when wholesale rates are far higher than the 24-hour average and often higher than retail.
This killed the rooftop solar business. According to media accounts, applications for solar installation dropped from 1,368 in December to 69 in January and only 18 in June.
As for Question 3, a number of major casinos are currently in the process of opting out of the monopoly power system, saying they can purchase power more cheaply on the open market. Why not others?
According to the U.S. Energy Information Administration, in the Mountain West region as of April only Arizona had higher residential cost per kilowatt-hour than Nevada.
Disclosure: The writer is a solar panel owner.
Thomas Mitchell is a longtime Nevada newspaper columnist. You may email him at firstname.lastname@example.org. He also blogs at http://4thst8.wordpress.com/.