Law 360: Utilities Want 9th Circ. To Nix SolarCity's Monopoly Suit

Law 360

Utilities Want 9th Circ. To Nix SolarCity's Monopoly Suit

May 10, 2016

By Stan Parker


Public power utility groups rallied behind an Arizona power district Monday, urging the Ninth Circuit to reverse a district court ruling and toss antitrust claims brought by SolarCity Corp.

The American Public Power Association and the Large Public Power Council told the appeals court in an amicus brief that the Salt River Project Agricultural Improvement and Power District should be immune from the solar developer’s suit claiming Salt River illegally imposed certain charges for utility customers who install rooftop Solar.

The APPA, which consists of more than 2,000 public power utilities, and the LPPC, which represents the 26 largest U.S. public utilities, told the court they have an interest in making sure that state-action immunity protects their ability to set rates.

“Specifically, they have an interest in preserving the ability of states to adopt and implement statutory ratemaking regimes, free from the distorting burdens that are often imposed by antitrust litigation,” they wrote.

The utilities said SolarCity’s antitrust suit was the wrong way to resolve the “difficult problems” of how to fairly allocate costs among customers. They argued that accommodating rooftop solar is an expensive endeavor and that subsidizing it can shift the burden onto the rest of the customer base.

The groups argued those pricing decisions are "difficult enough" and already subject to regulatory oversight.

“But if a stakeholder whose interest in the continuation of a subsidy can bypass the state’s administrative and judicial review processes and claim that a loss or decline in that subsidy is fair game for a federal antitrust suit, it will add dramatically to that difficulty,” they wrote.

Their arguments to protect state-action immunity echoed Salt River’s own arguments in its opening brief to the Ninth Circuit last week Tuesday, when it told the panel it was acting within the authority delegated to it by the Arizona legislature.

The appeal comes after U.S. District Judge Douglas L. Rayes pared down SolarCity’s suit against Salt River, but still allowed it to proceed with core monopolization claims.

SolarCity filed the complaint in March 2015, alleging that Salt River Project’s newly adopted “standard electric price plans” amounted to a 65 percent rate increase for solar customers and would “penalize” a typical solar customer by about $600 per year.

Those new price plans were a sudden shift for Salt River Project, which for years had offered incentives to customers to use solar, according to the complaint.

American Public Power Association and the Large Public Power Council are represented by John M. Baker, Bethany D. Krueger, Janine W. Kimble and Chris L. Schmitter of Greene Espel PLLP

SolarCity is represented by William A. Isaacson, Karen L. Dunn, Steven C. Holtzman, John F. Cove Jr., Kieran P. Ringgenberg and Sean P. Rodriguez of Boies Schiller & Flexner LLP and Roopali H. Desai of Coppersmith Brockelman PLC.

Salt River Project is represented by Molly Boast, Christopher Babbitt, Daniel S. Volchok, David Gringer, Thomas G. Sprankling and Christopher Casamassima of WilmerHale and Paul K. Charlton and Karl M. Tilleman of Steptoe & Johnson LLP.

The case is SolarCity Corp. v. Salt River Project Agricultural Improvement and Power District, case number 15-17302, in the U.S. Court of Appeals for the Ninth Circuit.

—Additional reporting by Jeff Zalesin, Adam Sege, Matthew Bultman, Bonnie Eslinger and Vin Gurrieri. Editing by Patricia K. Cole.

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Tuesday, May 10, 2016