SolarCity sues Arizona utility, says new rates harm solar

Reuters
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(Adds SolarCity attorney comments, SRP statement)

March 3 (Reuters) - SolarCity Corp on Monday sued Arizona utility Salt River Project over new electricity rates that the U.S. solar installer said penalizes residential customers who choose to put up solar panels.

The action is the latest in a protracted battle between rooftop solar companies and Arizona utilities over how traditional power providers will preserve revenue as larger numbers of customers go solar and pay less to their local utilities.

The lawsuit, filed in Arizona federal court, accuses the utility of violating antitrust laws, saying SRP is trying to "destroy the competitive threat" from solar installers.

In an emailed statement responding to the lawsuit, SRP said it 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."

Applications for rooftop solar have fallen 96 percent in SRP's service territory since Dec. 8, the date SRP's new plan went into effect, SolarCity said.

SolarCity has about 7,000 customers in SRP territory and was doing about 400 installations a month there before the new rates went into effect, according to Fred Norton, the company's associate general counsel.

"The new pricing plan that SRP introduced and approved on Feb. 26 makes it economically impossible for customers to go solar in SRP territory," Norton said in an interview.

Only new solar installations are affected by the new rate plan. Customers with existing solar panels will not move to the new rate plan for up to 20 years.

The new rate program for solar customers includes a so-called distribution charge of up to $37.88 per month and demand charges based on power usage. According to court papers, SolarCity estimates the demand charges would range between $30 and $125 a month.

SRP serves more than 1 million customers in the Phoenix area. Its board approved the new price plan for customers with solar panels on Feb. 26. In a statement at the time, the SRP said the plan was designed so that customers with solar panels "pay their share of costs to maintain and improve the grid."

SolarCity is the top U.S. residential solar installer and is backed by Tesla Motors founder Elon Musk.

(Reporting By Nichola Groom; Editing by Gunna Dickson and Steve Orlofsky)

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