Lyndon Rive, SolarCity CEO, Apologizes After Employee Lies to Customers About Arizona Corporation Commission

Lyndon Rive, CEO of SolarCity, apologized to the Arizona Corporation Commission this week after one of his employees spread misinformation to customers.

The flap began about 11 p.m. on July 31, records show, when SolarCity sales consultant Doyle Dreesen sent a breathless email to an unknown number of customers that blasted Arizona Public Service and the corporation commission.

See also: -An Epic Battle Between Solar Firms and Power Utilities Could Leave One Side Unplugged As New Times covered in a feature article last month, APS and solar companies have been slugging it out in recent weeks over the amount of money APS pays to owners of grid-tied solar panels for the electricity they produce. The utility wants to pay less for "net metering," arguing that solar users aren't paying enough for the services and equipment they use. Last month, APS put proposals before the commission that try to account for the perceived loss. In the other corner are solar firms like SolarCity, which -- through hired gun Jason Rose -- have portrayed APS as a benighted monopoly bent on killing off a perceived competitor.

The five-Republican-member commission plans public hearings on the matter before they vote on the APS proposals.

Under these black clouds, Dreesen fired off his ill-conceived, late-night email to solar customers, informing them that "We discovered two separate items that APS has not been forthcoming about and thev do effect [sic] YOU." Click here to read the letter, which we found on the corporation commission's website.

Dreesen went on to write:

The first is that they met behind closed doors with the ACC and got the buyback credit at the end of the year changed from their wholesale rate (The average of what it cost them to produce electricity) to the cost of their natural gas production. (The cheapest way they generate electricity at this time) It is going to reduce your year end buy back from approximately $.06/kwh to $.025/kwh. The change was made without anyone being aware that it was being considered.

Dreesen also mentioned some of the fine print in APS' net-metering proposals. Both of the payment-lowering proposals grandfather-in existing solar customers for 20 years -- but, as Dreesen points out in his email, that would only apply to the homeowner who purchased the solar system, not to a potential future buyer of the home.

While Dreesen's right about the grandfathering clause and the change in the "avoided cost rate" for APS, (an amount that APS uses to determine the retail rate paid to the grid-tied customers with installed solar panels), he was apparently dead wrong about the "closed doors" part. But SolarCity customers, not knowing he was wrong, flooded the corporation commission with emails expressing concern about the alleged back-room deal.

Two days later, a ticked-off sounding Bob Stump, corporation commission chairman, fired off a letter to SolarCity's CEO, telling him he'd seen the employee's letter that accuses the commission of breaking state open meeting laws. (Tip of the hat to the website Western Free Press, which first published Stump's letter and Rive's reply.) Stump informs Rive in the letter:

Please see to it that your employees do not misrepresent the facts about Commissioners' integrity and Commission processes. The Commission is spending its resources responding to scores of e-mails accusing Commissioners of violating the law and of negotiating "back room deals." All of these messages derive from an e-mail sent by a Solar City employee. It is unfortunate that Commissioners did not receive prior notice from your company regarding this matter. Also, to the best of my knowledge, no retraction has been issued.

On August 5, Rive writes back to Stump, offering his "sincerest apologies" for Dreesen's email.

SolarCity representatives know "for a fact" that Dreesen is wrong about a meeting behind "closed doors," Rive writes, because they were at the June 12 commission meeting during which the avoided-cost matter was voted on.

Rive writes that the employee "acted alone and without our knowledge, " and he outlines three measures being taken immediately:

We are taking steps to discipline this employee to ensure that this never occurs again. We are calling a special meeting of all Arizona employees to remind them of our policy against sending unsanctioned communications that do not represent the views of the company. Finally, we will send an email to the customers that received his email to clarify the misstatements made by our employee.

(We'd like to take this moment to remind everyone that if someone sends us a news tip at ray.stern@newtimes.com and wishes to stay anonymous, we will honor that wish.)

While Rive makes clear what Dreesen got wrong, the company remains concerned about the greater issues at hand.

When SolarCity confirmed the authenticity of the Rive apology letter for us, firm spokesman Will Craven took the opportunity to add in his email that APS was lying about some of the facts in the debate:

"We believe that APS' statements about rooftop solar and net metering are false, and that they are borne of the utility's own self-interest in protecting its monopoly and preventing the consumer choice which empowers consumers," Craven wrote.

We'll give you an update when we find out the estimated yearly dollar amount the approved rate change from June will cost solar customers. It's not much, it seems, but may be a factor that makes solar-panel installation slightly less lucrative, a development that fits into the overarching fight between APS and the solar firms.

The June change is minor, though, compared to the potential hit coming to SolarCity and other solar firms if the commission allows APS to move forward with its proposals. SolarCity, for example, operates by offering people solar panels at no cost to homeowners, with immediate savings on their power bill. Third-party investors own the lease or power-power agreements for the solar installations, but the investments will be worth less in the future if utilities like APS are allowed to pay solar-power generators less money for their electricity.

Another headache for SolarCity is the ongoing investigation by the federal government over accusations that the company may be inflating its installation costs in order to tap more of taxpayer-funded 30-percent-off subsidy.

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