SolarCity Lawsuit Alleges Arizona Utility’s Fee Hurts Solar

(Bloomberg) — SolarCity Corp., the biggest U.S. rooftop

solar installer, sued Salt River Project, alleging the Tempe,

Arizona-based utility’s new pricing policy will “punish

customers who choose to go solar.”

SolarCity said the pricing plan adopted Feb. 26 imposes

unfair fees on SRP customers who generate their own power, and

represents anti-competitive behavior, according to a statement

Tuesday.

The dispute is part of a growing conflict between companies

like San Mateo, California-based SolarCity that install

residential solar systems and utilities that see rooftop panels

as a threat to revenue.

“Just because you’ve decided to go solar, now you will pay

a substantial additional penalty for having made that choice,”

Fred Norton, SolarCity’s associate general counsel, said in a

telephone interview. “That’s discriminatory and unfair.”

People with solar systems typically send the output to the

grid and get a credit on their monthly power bills, reducing the

amount of electricity purchased from the local utilities. Adding

a fee offsets the economic benefit to the customer, SolarCity

said in a blog post on its website.

Pricing Plan

Under the new pricing plan, customers who don’t produce

their own power will have a minimum monthly charge of $20. For

people who generate electricity, from systems such as rooftop

solar panels, the minimum will be $32.44, and heavy users will

incur a higher basic charge.

Solar customers also face a demand charge, ranging from

about $30 in winter months to $125 in the summer that non-solar

customers don’t have to pay, according to the complaint filed

Monday in federal court in Phoenix. The new pricing takes effect

in April and will apply to to people who installed generating

systems after Dec. 8.

SRP said that under the new plan, most customers would end

up paying about the same amount as they did with the prior

arrangement. For example, a customer who paid $170 before

installing solar was paying a $20 minimum charge and $150 for

electricity. Now, that same person would pay a $32.44 minimum, a

demand charge of about $73 and then $65 for energy, according to

John Tucker, SRP’s manager of pricing design.

“An average solar customer saves about $100 a month when

he installs solar,” Tucker said. “What we’re trying to do with

the price plan is to just equalize his bill reduction with the

cost reduction we incur.”

SRP’s fee has already affected SolarCity’s business since

it was proposed in December. In the prior six months, the

company was installing on average 400 systems a month in the

utility’s service area. New applications have plunged 96 percent

since December, the company said. SolarCity has more than 7,000

customers in SRP’s service area.

The case is SolarCity Corp. v. Salt River Project

Agricultural Improvement and Power District, U.S. District

Court, District of Arizona (Phoenix).

To contact the reporter on this story:

Justin Doom in New York at

jdoom1@bloomberg.net

To contact the editors responsible for this story:

Will Wade at

wwade4@bloomberg.net;

Reed Landberg at

landberg@bloomberg.net

Michael Hytha

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