SolarCity sues Salt River Project in federal court over policy

SolarCity (NASDAQ:SCTY) has filed a lawsuit in the United States District Court for the District of Arizona, accusing public power utility Salt River Project (SRP) of anti-competitive behavior.

The suit specifically pertains to SRP’s pricing plan, which was approved by SRP’s board on Feb 26.

The new plan is “designed to punish customers who choose to go solar,” SolarCity said in a blog posted on its website March 3.

“Under the new plan, SRP customers who generate their own power have to pay additional “distribution charges” and “demand charges” that other SRP customers do not.  These discriminatory penalties add up to hundreds of dollars per year, and make a competitive rooftop solar business impossible within SRP territory,” SolarCity said in the blog.

“SRP has sabotaged the ability of Arizona consumers to make this choice if they happen to live in SRP territory,” SolarCity said. “We can already see the intended effects: After the effective date of SRP’s new plan (December 8 of last year), applications for rooftop solar in SRP territory fell by 96%.”

“SRP’s stated reasons for the new plan don’t hold up,” SolarCity said. “We understand that SRP does not like the choices its customers are making,” SolarCity goes on to say. “SRP does not want to lose customers, and revenue to solar companies.”

SolarCity added that it “will not sit idly by while Arizona and its reputation as a business-friendly state bear the heavy burden of unlawful abuse of monopoly power.”

SRP rejects SolarCity claims; cites right to fairly recoup costs

“As a community-based, not-for-profit public power utility, SRP’s obligation is to provide low-cost and reliable power to its more than 1 million customers, said SRP’s General Manager and CEO Mark Bonsall in a statement.

“SRP has done so for generations of Arizona citizens and will continue to do so by seeking low-cost alternatives that provide maximum financial and reliability benefits for all of our nearly 1 million customers,” Bonsall said.

“The new E-27 price plan ensures that the cost shift to our 985,000 non-solar customers will not grow and that is simply fair for all involved,” the SRP CEO said.

After a three-month public process in which thousands of individuals and industry organizations provided input, Salt River Project’s publicly-elected board of directors approved a new price plan for future self-generating customers, including rooftop solar, that ensures SRP is “fairly recovering the costs necessary to continue to maintain and improve the electric grid” that all customers use, SRP said.

SRP went on to say that it firmly rejects SolarCity’s claims that the new price process is improper or contrary to law. 

“In fact, as SRP demonstrated throughout the public price process, the new price structure properly aligns costs and revenues with respect to the distributed generation customers,” SRP said.

“Solar City’s lawsuit is without merit and will be aggressively defended.  Solar City’s efforts to mischaracterize what the SRP Board approved are unfortunate as is its filing of a meritless lawsuit,” SRP said.

SRP is confident that its new price plan will be determined to be appropriate and is confident that it will prevail in all such challenges to it.  SRP will also be reaching out to its solar distributed generation customers to work with them to take advantage of new technologies to assist them in managing their costs, SRP said.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.