Last week, residential and commercial solar leasing company SolarCity filed suit against Arizona utility Salt River Project (SRP) for alleged use of anti-competitive practices. The anti-competitive practice that triggered SolarCity's complaint is, specifically, a "demand charge" assessed only to SRP's customers with rooftop solar installations. The fee is assessed even if solar customers offset 100% of their usage with power that they generate from solar installations and feed back to the grid. The new fee will come out to about $50 per solar customer per month.
SRP defends the new fee for solar customers, claiming that these customers, though they are using solar panel systems to produce much of the electricity they consume, are still connected to the electricity grid that SRP maintains. SRP argues that because the cost of maintaining the grid is included in the per kWh rate it assesses other customers, it is fair to charge solar customers, who consume far fewer kWhs, an additional fee to recover the expense of maintaining the grid.
SolarCity argues that this new fee for solar customers makes "a competitive rooftop solar business impossible within SRP territory." The company goes on to state in a blog post about its reasons for filing the suit that "SRP has sabotaged the ability of Arizona consumers to make [the choice to go solar] if they happen to live in SRP territory…After the effective date of SRP's new plan…applications for rooftop solar in SRP territory fell 96%." Effectively, the new fee makes rooftop solar prohibitively expensive. Customers, who would otherwise find solar leasing an attractive option to save money on their electricity bill with home solar, would now potentially pay more than they are paying now.
This isn't the first time Arizona has witnessed a battle over utility fees levied against solar customers. An article appearing at azfamily.com notes,
In 2013, the regulated power company Arizona Public Service failed in an effort to get Arizona's utility regulators to approve a $50 to $100 monthly [fee] for rooftop solar customers. The Arizona Corporation Commission instead approved a $5 monthly fee for new installations after an outcry from the solar industry and homeowners who have installed solar panels on their homes.
The SRP fee at issue in the present case applies to solar customers who added a rooftop system after Dec. 8, 2014, and is assessed as part of a commission-approved rate increase.