Nevada’s Supreme Court struck down a ballot measure Thursday to change the state’s constitution to give lucrative subsidies to SolarCity, a rooftop solar company chaired by billionaire Elon Musk, and its customers.
The seven-member court bluntly rejected a ballot measure, backed by SolarCity, as fundamentally flawed. The court unanimously found that the petition used to get signatures for the referendum provided was “inaccurate,” ”misleading” and “argumentative.” This ruling removes the measure from ballots in November.
The proposed amendment stated that Nevada’s electricity markets would be opened to outside competition to minimize regulatory burdens, but does not specify exactly how so. The amendment had support from Nevada Democratic Sen. Harry Reid.
Musk and liberal billionaire Warren Buffett, the third richest man in the world with an estimated net worth of 60.8 billion, have been locked in an escalating conflict over solar subsidies since December.
If the ballot initiative had been successful, Musk would effectively reverse Buffett’s major December victory, when Nevada’s Public Utilities Commission (PUC) imposed rules that effectively ended net-metering. Net metering had been forcing electrical utilities, owned by Buffet, to buy the energy produced by rooftop solar panels, owned by Musk, at high rates.
Many states other than Nevada have enacted net-metering policies for homeowners with solar panels. Rooftop solar companies have pushed these policies as a way to encourage solar power and fight global warming. Since the demand of and price for electrical power fluctuates widely on any given day, net-metering is effectively a wealth transfer from Buffett’s utilities to Musk’s rooftop solar companies.
The electrical utility NV Energy was purchased by Buffett for $5.6 billion in 2013. The regulatory changes which ended net metering allowed NV Energy to pay solar customers 75 percent less for the electricity they sell back to the grid, according to a sample bill posted on the website of a utility. This change saved regular ratepayers a significant amount of money, but caused people who own rooftop solar panels to lose money.
The regulatory change caused Musk’s SolarCity stock to be devalued by roughly $165 million in a single day.The PUC’s decision to curtail net-metering payments to SolarCity’s customers infuriated the company, causing it to make good on its threat to end 550 jobs in the state.
Several other companies, such as data center operator Switch, have announced their support for the amendment. Other companies, such as Las Vegas Sands Corp., MGM Resorts International and Wynn Las Vegas LLC, applied to leave NV Energy’s power grid last year and have paid $126 million in fees to do so.
Musk has already benefited from billions of dollars in taxpayers subsidies from Nevada. In 2014, Musk received $1.4 billion from Nevada taxpayers to build a “gigafactory” for Tesla Motors. SolarCity also got a large cash payout to move to Nevada.
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