Switch sues, says it got bad deal when it tried to go solar

By Michelle Rindels, Associated Press

 

LAS VEGAS (AP) — A data-storage center company sued Nevada electricity regulators and NV Energy this week, saying it got an unfair deal when it tried to leave the grid and suffered at the hands of a former state employee who tweeted about the company's case under a fake name.

Switch, a Las Vegas-based company, filed the lawsuit Tuesday in federal court in Nevada. The lawsuit is alleging fraud, negligence and conspiracy, and it seeks at least $30 million in damages to compensate for higher rates the company had to pay through the arrangement that regulators approved.

Switch argues that the motive was "to unlawfully retain Switch as a customer of the monopoly NV Energy and impair renewable energy development in the State of Nevada, all while unlawfully enriching NV Energy."

Public Utilities Commission spokesman Peter Kostes said the agency hadn't been served with the lawsuit and thus didn't have comment.

NV Energy responded by saying they planned to "vigorously defend our company and our employees from baseless claims" if they were served.

"Switch is a very important customer to NV Energy, and given how far we thought we had come over the past two and a half years of working with their team on a variety of issues and opportunities, we are surprised and disappointed with this turn of events," the company said in a statement.

Switch applied to leave NV Energy and buy power directly from a solar company in late 2014. Regulators barred the company from leaving outright, saying Switch would harm the overall customer base if another company of its size didn't fill in the gap, according to the complaint.

Regulators ultimately allowed the company to strike the deal, but with NV Energy as a pass-through agency.

Other companies have since been authorized to leave the grid if they pay an exit fee, including MGM Resorts International and Wynn Resorts, which are paying more than $100 million combined to reduce the financial impact their departure would have on NV Energy.

Switch argues the process the company went through was unfair and pointed to social media postings that the PUC's lead attorney, Carolyn Tanner, wrote on a variety of websites under the pseudonym "Dixie Rae Sparx." The company says the posts allowed her to communicate about the case that was before regulators outside of the proper channels, and says that Tanner has an anti-solar bias.

Switch says the PUC "should have known that Tanner was engaging in inappropriate activity, and abusing her role as General Counsel, and failed to enforce rules, guidelines, policies or procedures that would protect Switch against a miscarriage of justice."

Tanner left the PUC last month, and she has deactivated or hidden social media accounts she used, according to the complaint. Reached on Wednesday, Tanner said she couldn't immediately comment but planned to thoroughly respond once she's served with the lawsuit.

The lawsuit comes as a ballot measure moves forward that would allow companies the right to buy power from the open market, rather than only through the state-regulated utility companies that have a monopoly in their service territories. Switch was one of the first to publicly support the measure, which gets its primary financial support from the Las Vegas Sands casino company that also wanted to leave NV Energy.

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