A federal court judge in Arizona has ruled that SolarCity’s legal challenge against Salt River Project can move forward, dismissing the Arizona public utility’s request to block the case.
The October 27 decision throws out SolarCity’s claim for antitrust money damages, as well as claims seeking other non-monetary relief. But it allows thesolarinstaller’s core monopolization claims to proceed.
The lawsuit was filed in response to a new pricing plan Salt River Project (SRP) approved in late February that adds a fee of about $50 per month to all leased and owned solar systems, primarily through a new demand charge. Net metering was also reduced from the retail rate of $0.09 cents per kilowatt-hour to $0.05 cents per kilowatt-hour.
The agreement provided a 20-year grandfathering-in period for all systems installed prior to December 8, 2014, when the new rates were first proposed.
“We believe SRP designed the new terms to make rooftop solar uneconomical, to exclude competition, and to punish consumers who want to adopt rooftop solar,” said Nate Watters, a spokesperson for SolarCity.
“We look forward to showing that utilities cannot exploit their monopoly power to try to eliminate competition from rooftop solar,” he added.
The ruling on the SolarCity case came days before another win for solar advocates in the Midwest. On October 30, the Dane County Circuit Court in Wisconsin reversed a 2014 decision to allow We Energies to impose a new fee on solar customers. The fixed charge amounted to about $25 per month for a 6-kilowatt system.
Judge Peter Anderson determined that there was a lack of evidence to support the Wisconsin Public Service Commission’s decision. The Alliance for Solar Choice, which filed the appeal with Renew Wisconsin, argued that the commission should have required an independent study of the costs and benefits of solar.
TASC recently filed a separate suit against regulators in Hawaii for ending the state’s net-metering program. As in Wisconsin, the group argues that the commission failed to conduct a study of the costs and benefits of solar before imposing discriminatory changes to the state’s solar policy.
In Arizona, SolarCity says the anti-competitive rate plan has caused new rooftop applications in SRP territory to fall by roughly 95 percent. GTM Research figures show that the change is slightly less severe, with solar installations in the second half of 2015 falling 75 percent below recent quarterly volumes in SRP territory, now that projects grandfathered in under old rate rules have depleted.
SRP argues that the rate changes were needed to ensure that solar customers pay their fair share for use of the electrical grid, and to support maintenance and upgrades on the network. To that end, the SRP board of directors also approved a 3.9 percent rate increase on all of the utility’s nearly 1 million customers earlier this year, raising the average residential bill by $4.60.
As a community-based, nonprofit utility, SRP’s revenues are reinvested back into the grid. Since the last rate increase more than two years ago, SRP has invested more than $1 billion in its electrical system.
However, Chief Financial Executive Aidan McSheffrey has acknowledged that revenues are not keeping pace with a number of higher-than-anticipated costs. According to managers, SRP is facing a projected net loss of $46 million for the fiscal year that begins in May.
McSheffrey has also argued that the demand charge included in the new distributed-generation rate plan gives solar customers more control of their energy use, enabling them to save money.
"Rather than solve this cost shift with an additional fixed charge -- which does not provide flexibility to save money -- our new plan sends a price signal that [incentivizes] more efficient installations by the solar industry and behavior by the customer that maximizes the value of their solar systems," McSheffrey said earlier this year.
In this context, SolarCity will have a difficult time making its case against SRP’s new solar rates, said SRP spokesperson Scott Harelson.
“To ultimately prove its case...SolarCity would have to show that SRP acted for anti-competitive reasons in adopting its current rate structure and that it lacked any reasonable business justification for the current rate plans,” Harelson wrote in an email.
“Because SRP's board adopted rate structures for all customers to pay their fair share of the costs of maintaining and improving the electrical grid, SRP is confident that it will prevail even on the limited claims the Court has allowed to proceed,” he said.