The case could set an important precedent nationwide
A recent ruling by a federal appeals court could mean good news for Arizona homeowners considering solar – and could be a warning to utilities across the country who try to punish homeowners with higher rates and fees for going solar.
The Salt River Project is a utility in the Phoenix area with a territory that includes about one million households. In 2015, SRP adopted a new rate plan which raised rates for solar-empowered homeowners connected to the grid by 65%, while non-solar households saw their rates go up less than 4%. Predictably, applications for new solar systems in SRP’s territory plunged.
A number of SRP customers filed a class-action lawsuit over the unfair rate hike. A federal district court initially dismissed the suit in January 2020, so the homeowners appealed to the U.S. Court of Appeals for the Ninth Circuit. On January 31st of this year, a three-judge panel of the Court of Appeals found in favor of the homeowners, ruling that SRP can be held liable for damages and allowing the suit to proceed.
The ruling is a potential game-changer on the national level because it sets a precedent that utilities with the authority to set their own rates may not be exempt from antitrust laws. It’s also notable that the Department of Justice’s Antitrust Division weighed in on the side of the homeowners with a “friend of the court” brief. This is an encouraging sign that the federal government has its eye on anti-competitive practices by monopoly utilities.
It’s important to note that this ruling isn’t an actual verdict. Since the appeals court has ruled the case can proceed, it will now return to the district court to be heard. Given that two full years passed between the previous dismissal and the appeals court overruling the dismissal, it will likely be some time before the case is decided and it’s determined whether SRP will have to pay damages or change its billing and fee structure for solar customers. We’ll update you with any relevant developments. Be sure to follow us on social media so you don’t miss any news and analysis on policy and legal developments that affect residential solar and homeowners’ rights.