ECOtality Files Lawsuit To Halt Illegal California PUC Agreement

A market-leading company in the electric vehicle charging station (EVCS) industry, ECOtality, Inc. (NASDAQ: ECTY), today filed legal documents with the state’s First District Court of Appeal seeking to halt implementation of an agreement between the California Public Utilities Commission (PUC) and New Jersey-based company NRG Energy, Inc.

The company alleges that the agreement, which was intended to settle NRG’s role in overcharging California energy ratepayers $940 million during the 2000-2001 energy crisis, instead rewards NRG by requiring only that the company spend $102.5 million on its own EVCS business. Secondly, the company alleges the PUC intervened outside of its authority in the private marketplace by endorsing one of multiple competitors, and indeed the most powerful, thereby handing the company a monopoly over the nascent market in California.

“This so-called ‘punishment’ is like a restaurant failing a health inspection then being given an exclusive franchise to open and operate every restaurant in the city, subsidized by public funds,” said ECOtality CEO Jonathan Read. “This is an illegal giveaway, negotiated without public input, that will not only impede the development of the electric vehicle market in California and ultimately cost consumers more -- but it also denies California rate-payers any refunds from the nearly $1 billion in overcharging that occurred during the energy crisis.”

NRG is the successor entity to Dynegy Power Marketing, the firm blamed by the PUC for $940 million in price-gouging from 2000-2001. The PUC now wishes to settle those energy crisis-related claims.

The agreement requires only a $20 million payment to the PUC (which amounts to roughly 2 percent of the overcharges) and that NRG invest $102.5 million in establishing 1,200 electric vehicle charging stations throughout the state. NRG already invests in the EVCS industry through its subsidiary, eVgo.

In documents filed in support of ECOtality’s lawsuit, anti-trust expert and director of the Berkeley Research Group C. Paul Wazzan, Ph. D. stated: “My review has identified features of the Agreement which I believe present the potential for serious anti-competitive impacts by enabling NRG to establish a dominant position in the California EVCS market by engaging in what is essentially a predatory scheme to capture the best geographic locations for their charging stations.” Wazzan went on to state: “The Agreement presents a substantial risk of creating a subsidized predatory scheme and conveyed first mover advantage.”

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