The Iowa Supreme Court on July 11 overturned the Iowa Utilities Board and found that a rooftop solar supplier is not a “public utility” when it enters into a power purchase agreement with a utility.
In this case, the court considered whether SZ Enterprises LLC d/b/a Eagle Point Solar may enter into a long-term financing agreement related to the construction of a solar energy system on the property of the city of Dubuque under which the city would purchase from Eagle Point, on a per kilowatt hour (kWh) basis, all of the electricity generated by the system.
Prior to proceeding with the project, Eagle Point sought a declaratory ruling from the Iowa Utilities Board (IUB) that under the proposed agreement: Eagle Point would not be a “public utility” under Iowa code: and Eagle Point would not be an “electric utility” under Iowa code. If Eagle Point was a public utility or an electric utility, it would be prohibited from serving customers, such as the city, who were located within the exclusive service territory of another electric utility, Interstate Power and Light.
The IUB concluded that under the proposed business arrangement, Eagle Point would be a public utility and thus was prohibited from selling the electricity to the city under the proposed arrangement. Because of its ruling on the public utilities question, the IUB found it unnecessary to address the question of whether a party who was not a public utility could nevertheless be an electric utility under the statute.
Eagle Point brought a petition for judicial review and the district court reversed. According to the district court, Eagle Point’s provision of electric power through a “behind the meter” solar facility was not the type of activity which required a conclusion that Eagle Point was a public utility. The district court further found that although it was conceivable under some circumstances that an entity that was not a public utility could nevertheless be an electric utility under the applicable statutory provisions, Eagle Point’s proposed arrangement with the city did not make it an electric utility for purposes of the statutes.
The IUB and intervenors MidAmerican Energy, Interstate Power, and Iowa Association of Electric Cooperatives appealed. Eagle Point filed a cross-appeal challenging the reasoning, but not the result, of the district court’s electric utility holding.
The high court on July 11 affirmed the decision of the district court. It said that Eagle Point’s proposed arrangement with the city did not make it a public utility for purposes of the statutes. “The IUB asserts that the exclusive territory provisions require that the definition of electric utility should be broader than public utility, but we do not agree,” the Supreme Court added.