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Salt River Project, SolarCity may resolve suit over rates for solar customers

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Salt River Project, SolarCity may resolve suit over rates for solar customers

Salt River Project and Tesla Inc. subsidiary SolarCity Corp. have taken a first step toward resolving SolarCity's 2015 lawsuit challenging SRP's rates for distributed solar customers.

The parties have agreed to a memorandum of understanding in which SRP would purchase a 25-MW battery storage system from Tesla that would be installed at SRP's gas-fired Agua Fria Generating Station in Peoria, Ariz., according to SRP spokesman Scott Harelson. The storage system would have the capacity to provide up to 100 MWh of energy.

Also, SRP agreed to initiate a consumer storage incentive program to provide incentives for customers to buy home energy storage systems, Harelson said, and to conduct a three-year pilot price plan program for solar and non-solar customers to limit the effect of unusual spikes in demand. The temporary pilot will help SRP consider future modifications to the price plan, Harelson said.

If a final resolution is reached incorporating these provisions, Tesla would drop the lawsuit, Harelson said.

Meanwhile, the U.S. Supreme Court is scheduled to hear oral arguments on March 19 concerning SRP's contention that as a governmental entity it is immune from SolarCity's antitrust suit.

SRP raised rates for new solar customers in early 2015 with a demand charge in the range of $60 per month along with a separate service charge. SolarCity sued SRP claiming the rates were discriminatory and designed to keep competing distributed solar resources from competing for a share of the energy market in its territory.

SRP contended solar customers were responsible for shifting millions of dollars in grid costs to non-solar customers.