Nevada PUC to Rule on Legality of Renting or Leasing RE Systems

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.

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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