A public utility?

The N.C. Utilities Commission agreed, and in a 2-1 decision Tuesday, so did the N.C. Court of Appeals. But the dissenting opinion, written by Judge Chris Dillon, justifies a further appeal to the N.C. Supreme Court. A different outcome there is certainly possible.

This case presents new circumstances in North Carolina and can address the legal questions arising from small, off-the-grid renewable energy developments.

State law was written for the era of big energy plants. Does it allow for small-scale projects like the one on the roof of Faith Community Church? If not, shouldn’t it be updated?

The Court of Appeals decision hinged on the meaning of a public utility. The majority judges, Hunter Murphy and Donna Stroud, contended that NC WARN’s action of installing solar equipment and selling power to the church made it just such an entity. As such, it violated the Public Utilities Act, which “establishes regional monopolies on the sale of electricity.” The law, Murphy wrote, “precludes retail electric competition.”

Competition is the hallmark of the free-enterprise system, but state law protects utilities such as Duke Energy, which is granted a monopoly in the Greensboro area and much of North Carolina. In return, it is required to serve all customers and to submit to regulation by the N.C. Utilities Commission, which sets the rates it can charge.

While NC WARN took just a tiny slice from Duke’s sales, one solar installation can lead to many more.

“If we uphold the agreement NC WARN has with the church, NC WARN would like ‘to provide similar projects to other nonprofits in the future,’ ” Murphy wrote. Furthermore, many other organizations could do the same, which would “upset the balance of the marketplace.”

In his dissent, Dillon focused more on another, more basic test of whether NC WARN was acting as a public utility: Was it serving the public? He concluded, emphatically, that by generating power for a single customer, it was not.

“Indeed, a hardware store renting a portable generator to a homeowner would not be acting as a public utility if it chose to charge the customer, at least in part, based on the power generated by the generator rather than solely at a flat daily rate,” Dillon wrote.

In that analogy, NC WARN is the hardware store charging for the use of a generator by the amount of electricity produced.

There would have been no case at all if the church had installed its own solar panels to create electricity for its own use. The violation, according to the Utilities Commission, came from the sale by NC WARN of electricity it generated. No one found any fault on the church’s part.

Duke Energy welcomed the majority opinion, while NC WARN embraced Dillon’s view. The split decision grants an automatic right of appeal to the Supreme Court, and NC WARN should pursue its claim there for a definitive ruling.

In the meantime, the legislature should consider whether it means to bar arrangements such as this. When a public utility invests billions of dollars in big power plants to meet the energy demands of millions of customers, granting regional monopolies makes sense. But when small solar arrays can supply homes or businesses with electricity, perhaps the law should make room for such providers.

Duke Energy is a public utility. If NC WARN meets the same definition under the law as Duke by supplying electricity for a single church, the law may have made a mistake.

http://www.greensboro.com/opinion/n_and_r_editorials/our-opinion-a-public-utility/article_bf39abd7-b0f7-54d6-af3c-efa88e09ffb0.html