NV Energy asks about stopping renewable fees

By Stephanie Tavares (contact), In Business reporter

Fri, Feb 27, 2009 (2 a.m.)

Electric bills could get a little smaller starting April 1 if NV Energy stops collecting fees to support rebates for small-scale renewable energy installations.

The electric company filed an application this month seeking advice from the Public Utilities Commission on whether it can or should stop collecting fees to support the rebates after the program has met its fiscal needs.

The utility collects $0.00071 per kilowatt hour from all customers through the Renewable Energy Program Rate, which funds rebates and administrative costs on the state’s RenewableGenerations, programs that give participants rebates for installing small renewable energy systems on their homes, schools or businesses.

But the utility overestimated the amount of interest in the programs this year.

According to the filing, by April 1 — the program’s third quarter — the power company will have collected enough money to support all the approved rebates for this year.

If it waits to reset the rate until it comes up for renewal this fall, the amount of money beyond the program’s needs would be substantial, the filing said.

The utility thinks that when the rate was set last fall, it was too high.

“We try to look forward to what we’re going to spend in the coming year (on rebates),” said Greg Kern, director of customer renewable generation and energy efficiency for NV Energy. “I looked at the plan we submitted for solar, wind and water rebate programs, and I set the rate based on the full amount that was estimated in the plan, about $30 million. We knew we wouldn’t get 100 percent participation, but we thought the regulations said we had to fully fund it regardless. After a couple of months went by we realized we’re going to start overcollecting from customers.”

The wind and hydropower rebate programs are in their first year, so it was difficult to gauge interest in them. And the wind program is below maximum participation.

But the number of solar projects getting rebates also decreased this year. There were 561 applications for rebates in the 2008-09 solargen program, but only 50 solar installations have been built. There were 88 built in the 2007-08 project year and 104 the year before that.

NV Energy staff said the program is doing well — the project year is only about half over, and development of rebated projects jumped in January.

The temporary lag in participation is most likely a result of economic reality and political hopes, said John Hargrove, project manager for RenewableGenerations.

Many projects that had been planned in the first half of the program year delayed installation while awaiting news of new federal renewable energy incentives in last fall’s stimulus package.

“A lot of people waited for this (2009-10) term,” Hargrove said. “When they heard the stimulus bill might lift the limit (on federal tax credits) in 2009, they waited for that. We had a lot of projects wait through 2008.”

When the bill passed in September, many put off construction until the new year so they could take advantage of the 30 percent tax rebate from the federal government.

The company saw an increase in productivity on approved projects in January. Participants have a year to complete their project to receive the rebate.

There are almost 870 applications for rebates for the 2009-10 program year.

But NV Energy thinks it will have enough money for the 2008-09 rebates. The company has already approved all 2008-09 projects. It received fewer applications for wind projects than anticipated — just four turbines for a program that caps out at $16 million per project year.

A typical small-scale wind turbine can produce 1,200 to 30,000 watts — earning a state rebate from a few thousand dollars to tens of thousands of dollars, depending on location and size of the turbine.

Solar power rebate rates are about the same, but the wattage tends to be smaller.

Although the state and federal governments have sweetened the pot for those wishing to install small solar, wind and hydropower systems, banks have not.

The utility thinks the economic downturn, which has hit Nevada harder than most states, has made it more difficult for many to pay for or finance their projects.

“Now we’re wondering about the economy,” Kern said. “Even people who have money have less than they did a year ago. A normal solar PV installation is a $30,000 investment (before rebates and incentives). There are a lot of folks now who might say no, we can’t afford this anymore. We don’t know. We’re interested to see the February numbers.”