Solar Under Siege

How Will Nevada Navigate The Changing Tide of Energy Consumption?

By Brian DiMarzio

Our country is in the midst of a paradigm shift in the energy industry. The price of renewable power generation is dropping dramatically, while the cost of new coal plants continues to rise. President Obama’s Clean Power Plan will be the first federal policy limiting the amount of carbon pollution that energy generators emit into the atmosphere. We are also seeing the end of coal-burning power plants, like the virtually shuttered Reid Gardner plant in Moapa and the Valmy power plant in Northern Nevada’s Battle Mountain, which is slated to close by 2025.

In addition to the Clean Power Plan, Nevada law requires that the state “encourage private investment in renewable energy resources; stimulate the economic growth of this state; and, enhance the continued diversification of the energy resources used in this state.” Renewable energy sources like geothermal and solar will generate our state’s energy in the future.

This new movement toward renewable energy is putting unprecedented pressure on the state’s monopoly utility, NV Energy, from rooftop solar installers, consumers, environmentalists, and the gaming industry. The rapid proliferation of rooftop solar installations across the valley—allowing consumers to generate their own power to defray the electricity costs they incur from NV—appeared to catch the utility company off guard, causing it to respond aggressively by using its vast political power to push through Senate Bill 374 as the 2015 legislative session was coming to a close.

Senate Bill 374 gave the Power Utilities Commission (PUC) wide-ranging discretion (and near total regulatory control) over net metering. The commission rewrote the rules and rates of rooftop solar, allowing for all net-metered customers to become a new rate class, separate from non-solar customers. These solar-generating customers will also see their basic service charge increase from $12.75 to $38.51 over the next 5 years. While the service charge increases, the amount customers are reimbursed for energy they produce will drop to 2.6 cents per kilowatt-hour in 2020 from what was once 11 cents per kilowatt-hour. The new rates make it significantly less attractive for new customers and considerably more costly for existing net-metered customers.

This outraged rooftop solar installers who claimed the new rates would effectively cripple the industry and result in the loss of thousands of jobs. Local rooftop solar installer 1 Sun Solar claims its business has dropped 95 percent since the PUC decision. Nevada’s two largest solar installers, Solar City and Sun Run, have ceased operations.

Existing net-metered customers now facing rapidly rising rates for their solar installations were infuriated with what they thought was a bait-and-switch by the utility monopoly, resulting in a class action lawsuit seeking “restitution for anti-competitive actions, deceptive and unfair trade practices, monopolization over the electric utility in Nevada, price discrimination and artificial price inflation.”

As the net metering controversy rages on, NV Energy now faces another far greater threat: Technology giant Switch Communications and the powerful gaming companies Las Vegas Sands Corp., MGM Resorts International, and Wynn Resorts Ltd., all filed exit applications seeking to purchase power on the open market or generate it on their own.

Switch came to an agreement to buy 100 percent clean energy from the utility to be produced at a facility soon to be under construction. Las Vegas Sands Corp., MGM Resorts International and Wynn Resorts Ltd., are teaming up to support a ballot initiative petition for a constitutional amendment allowing Nevada energy consumers “the right to choose their service provider from an open retail market based upon price, reliability, and other important factors.” The passage of this initiative would effectively end NV Energy’s monopoly in the state.

It’s clear that the way our state generates energy is changing. Like the rest of the country, Nevada is moving away from coal plants like Valmy and toward renewable sources like geothermal and solar. What’s less clear is who will be generating energy in the evolving renewable energy landscape. Rapid technological advancements are making it possible for major industries like gaming and individual consumers to purchase cleaner and cheaper energy on the open market (or to create their own energy), leaving NV Energy’s monopoly under siege.