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On Wednesday, the Public Utilities Commission of Nevada (PUCN) is expected to rule on the legality of renting or leasing renewable energy equipment in the state, a decision that could have wide-reaching implications for the distributed energy market.
Instead of defining a utility simply on ownership of a system, the companies want the PUC to define a utility based on the production and delivery of energy.
The PUCN argues that renting or leasing renewable energy equipment in Nevada is illegal because the renter/seller acts as a public utility. In order to prevent a "duplication of service" in the territories of Sierra Pacific Power Company and Nevada Power Company, the Commission says it must assign "specific territories to one or each of such utilities...or otherwise define the conditions of rendering service and construction...and shall order the elimination of such duplication."
The issue over the legality of renting or leasing renewable energy systems arose in September of last year when the multi-level marketing company Citizenre announced plans to set up rental agreements for photovoltaic systems in 41 states, including Nevada. Under an agreement, Citizenre would own and operate the equipment and pay the customer a set price for the electricity over a specified length of time. The PUCN said that such an agreement is illegal because Citizenre would directly compete with regulated utilities as a power provider.
While Citizenre has yet to offer services in the state, other companies already doing business in Nevada may suffer most from such a ruling. For example, SunEdison LLC, the largest owner-operator of renewable energy systems in North America, may be prevented from developing 10's of megawatts of solar PV in the state. Golden Sierra Power Inc. (GSP), a company that leases renewable energy systems to commercial, residential and municipal customers, may be severely limited in what it can offer small businesses, public buildings and schools throughout Nevada.
"The Public Utilities Commission of Nevada's decision regarding third party ownership through leasing and renting of renewable energy equipment will either assist in the development of renewable technologies or hinder it," said GSP CEO Mark Johnson in anticipation of the ruling. "It is my hope that the Commission will see this and choose to assist the development and implementation of these technologies. These are standard business practices being used throughout the U.S. — we are not proposing anything new or different."
GSP, SunEdison and Citizenre contend that the PUCN's interpretation of the statute defining a regulated utility is too broad. In comments filed separately earlier this month, the companies wrote that the statute, which was drafted in 1919, does not reflect the realities of the shifting energy landscape. Instead of defining a utility simply on ownership of a system, the companies want the PUCN to define a utility based on the production and delivery of energy. If the PUCN defines a utility based solely upon equipment ownership it will drastically reduce the potential of the state's renewable energy market, argue the stake-holding companies.
The PUCN will hear the issue on Wednesday at 10:30 a.m. PST.
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Peter --
Nevada has a very active PV incentive program with some of the highest incentive levels in the country (schools and public buildings $5/watt, residential $3/watt). Unfortunately yearly program caps limit participation to 3700 kW. Net Metering limits have been rasied to 1 MW with no expiration so credits do not expire at the end of the year as in other states.
The question is bout leasing or renting the PV equipment and selling the power back to the customer.
The possible up-side to cooperating with advanced adopters is that if a big facility goes down, as just happened in FL, the decentralized stuff can at least supply prioritized activities. Maybe all the firehouses in NV already have generators, but if not...
The thing is here, that people who exercise and are in good shape have far bigger capillary systems than people who do not. Sometimes the capillary system can keep enough blood flowing around a clot to prevent as substantial tissue damage as would happen without this increased capacity. My argument, here, is that utilities should think this way.
This seems to me to be state action in restraint of trade. While it may be presently legal for a state to do this, it should not be legal. There are states that are more friendly to small business and states that are less friendly.
I think companies with state blessings on restraining trade would be better advised to think about how they could benefit by cooperating with small business. At some point, what with freedom of information on the internet, it is going to get harder to spin themselves out of looking like big bullies. Legislators are going to have to come up with consequences for bullying behaviors.
Peter --
The issue is only limited to renting and leasing systems. The PUCN's definition of an electric utility in the state is centered around ownership of the equipment, not how the electricity is sent back into the grid.
--Stephen Lacey, RenewableEnergyWorld.com
Does anybody have an update on this story? Did the ruling come out Wednesday?
TJ, The question about leasing/renting is very important. For instance - non-profits do not get any tax credits or on a personal basis, the caps are lower. Companies could pass those advantages to the consumer/non-profits (churches, schools, etc) and a ruling for would further encourage investment in alternative energy.
Thank you Erika. What's your take on the outcome? Having not read the applicable law, just this article, the commission may have their hands tied. What is the feeling in the legislature in Nevada should the law require change?
Additionally, how are things going at Citizenre? I have read with interest and wondered how receptive people are to your business plan?
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