Iowa Supreme Court Decision Boosts Renewable Energy Development

19 July 2014 Renewable Energy Outlook Blog

A recent Iowa Supreme Court decision may give a boost to small-scale renewable energy development in that state. On July 11, the court issued its opinion in SZ Enterprises, LLC vs. Iowa Utilities Board (link to decision), determining that a third-party power purchase agreement for behind-the-meter generation is not subject to regulation as a “public utility” or “electric utility” under the Iowa Code.

Eagle Point Solar (Eagle Point) and the City of Dubuque had proposed to enter into a power purchase agreement, pursuant to which Eagle Point would have installed, owned and operated a solar generation system on the roof of a city-owned building. The city would buy the output of the system on a per-kWh basis for use by the city on its side of the meter.

Iowa’s utility statutes prohibit a “public utility” or “electric utility” from serving customers within the exclusive service territory of another utility. Because the statute’s exemption for customer-owned generation would not apply to the third-party sale of power from Eagle Point to the City of Dubuque, Eagle Point sought a determination from the Iowa Utilities Board (IUB) that the project would not qualify as a public utility or electric utility. The IUB rejected Eagle Point’s request, determining that the project would be a public utility and prohibited from selling power to a customer within the exclusive service territory of Interstate Power & Light Company.  Eagle Point sought judicial review from a state district court, which reversed the IUB decision. The IUB appealed to the Iowa Supreme Court.

After reviewing the statute and case law on the question, the Iowa Supreme Court applied a multi-factor analysis to determine that a third-party power purchase agreement for behind-the-meter generation is not “clothes with the public interest” and did not merit treatment as either a public utility or electric utility. Though the IUB and utility company intervenors argued that projects like the Eagle Point facility could diminish demand for electricity from regulated utilities, the court found nothing in the record to quantify this risk nor any evidence that utilities had been materially impacted in other states that permitted third-party power purchase agreements.

Advocates of renewable energy have praised the ruling, saying that it will encourage other similar projects in the state, while Iowa’s electric utilities argue that it may result in a loss of their most profitable customers and an increase in rates for their remaining customers.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights

Do You Know What IMMEX Stands For?
16 July 2019
Dashboard Insights
Does The U.S. Need STRONGER Patents?
16 July 2019
PTAB Trial Insights
California Establishes Fund to Combat Wildfire Threats
15 July 2019
Renewable Energy Outlook
There’s No Place Like Home – But Is That a Reasonable Accommodation?
15 July 2019
Labor & Employment Law Perspectives
Review of 2020 Medicare Changes for Telehealth
11 December 2019
Member Call
2019 NDI Executive Exchange
14-15 November 2019
Chicago, IL
MAGI’s Clinical Research Conference
29 October 2019
Las Vegas, NV
Association for Corporate Counsel Annual Meeting 2019
27-30 October 2019
Phoenix, AZ