News Column

Company Sues California Over Electric-vehicle Charging Deal

May 25, 2012

NRG Energy Inc.'s $120 million settlement with California to create and operate electric vehicle charging stations throughout the state infuriated other companies in the nascent electric vehicle charging business.

Now ECOtality Inc., a San Francisco-based competitor that has been highly critical of the NRG deal, has filed a lawsuit arguing that state regulators crafted an illegal agreement that hurts California consumers.

In late March, Gov. Jerry Brown announced a landmark agreement between the California Public Utilities Commission and New Jersey-based NRG as part of a legal settlement stemming from the state's 2001 energy crisis that requires NRG to invest $100 million and build a network of electric vehicle charging stations, mainly in the San Francisco Bay Area, Los Angeles and San Diego.

The agreement, which is being reviewed by the Federal Energy Regulatory Commission, immediately caused an uproar. Electric vehicle advocates warned that NRG will become the default provider of charging stations throughout the state.

NRG's electric vehicle charging subsidiary, known as eVgo, is based in Houston and currently operates 11 electric vehicle charging stations in Houston and one in Dallas. But the company is eager to expand into the California market.

The agreement settled years-old claims that Dynegy Energy overcharged California in a power contract signed in 2001, during the height of a costly electricity crisis that drove Pacific Gas & Electric Co. to bankruptcy and plagued the state with rolling blackouts. NRG acquired Dynegy's California assets in 2006 and became responsible for its debts.

But ECOtality argues that the agreement "punishes" NRG for price gouging during the energy crisis by allowing them to invest money that back into their own business.

"Such "punishment" is equivalent to a motorist settling his speeding citation by simply being required to buy a faster car, subsidized by the public," reads the lawsuit, filed Friday in the First District Court of Appeal in San Francisco. "It is illusory. The agreement, purportedly entered into to settle claims by the (Public Utilities Commission) on behalf of the California rate-payers for price gouging during the California Energy Crisis, transfers monies that should be refunded to California rate-payers to NRG, the entity now in ownership and control of the Dynegy wrongdoers."

NRG has argued the agreement will jump-start a nascent industry, and that nothing prevents other companies from installing charging stations of their own.

The settlement requires NRG to build at least 200 fast-charging, 480-volt stations, which would allow electric car owners to "top off" their batteries in less than 30 minutes, along major highway arteries in the Bay Area, San Joaquin Valley, Los Angeles and San Diego. NRG will own the stations. The settlement also requires NRG to build at least 10,000 individual charging stations -- probably in blocks of 10 at 1,000 separate locations -- at apartment complexes, office parks, schools and hospitals.

The lawsuit asks the state Court of Appeal to stop the agreement and direct the Public Utilities Commission to cease and desist any efforts to implement it.



Source: (c)2012 the San Jose Mercury News (San Jose, Calif.)


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