Arizona Solar-Power Challenge Ends in Settlement

WASHINGTON (CN) – Environmentalists balked Tuesday night that a settlement will likely block the Supreme Court’s review of an alleged utility monopoly.

Tesla subsidiary SolarCity brought the underlying lawsuit in Arizona, accusing the Salt River Project Agricultural Improvement and Power District of hurting solar-power businesses by setting unfair prices.

Both a political subdivision of the Grand Canyon State and an electrical supplier for the greater Phoenix area, the Salt River district claimed that sovereignty shields its from antitrust claims.

Because of uncertainties concerning the power district’s state-law authority and business, however, a federal judge found the immunity question too close to call.

The power district hoped the Ninth Circuit would dismiss the case on appeal, but the three-judge panel ruled against it as well in June 2017.

Salt River then took the case to the Supreme Court, but on Tuesday its attorneys at Wilmer Hale filed a joint stipulation for dismissal with SolarCity’s attorneys at Morrison Foerster.

News of the settlement prompted criticism that night from the Center for Biological Diversity’s associate conservation director Jean Su.

“This settlement treats a symptom but ignores the disease,” Su said in a statement. “It lets utilities like the Salt River Project keep discriminating against rooftop solar customers, a problem we see across the country. As climate change accelerates, we can’t allow outdated utility monopolies to block our transition to cleaner energy. It’s bad for their customers and the planet.”

The Center for Biological Diversity had been one of six environmental groups that filed an amicus brief in the Supreme Court for the SolarCity case, which  was slated for oral arguments in April.

Its statement notes that the Salt River Project raised electricity rates for rooftop-solar customers by 60 percent in 2015.

Attorneys for Tesla and the Salt River Project have not returned emails seeking comment, but a press release on their settlement notes that the deal includes commitments to increase battery-storage opportunities for utility customers.

One provision of the settlement requires the Salt River Project to buy a 25-megawatt battery-storage system from Tesla at market price, and install said system at the Agua Fria Generating Station located in Glendale, Ariz.

In addition to also incentivizing its customers toward buying home-energy storage systems, the Salt River Project will initiate a three-year pilot program for solar and nonsolar customers that can, in certain circumstances, limit the effect of an unusual demand spike on billing.

The Salt River Project is set to roll out the incentive program to 4,500 customers in May 2018.

Residential customers who purchase and install qualifying battery-storage systems – including Tesla Powerwall battery products —  are eligible for incentives of up to $1,800.

As for the 25 MW battery that Tesla will sell the project, that will be installed in early 2021.

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