Third Party Solar Protected by Iowa Supreme Court

An important decision on distributed solar energy was handed down by the Iowa Supreme Court on July 11, 2014 in the case challenging the Iowa Utilities Board’s (IUB) decision and Iowa utilities’ (Alliant – Interstate Power & Light, and MidAmerican Energy) attempt to impose regulatory barriers to distributed solar energy development. Distributed solar is solar sited on a customer’s property such as a home, business or local government building or land. The IUB and utilities claimed that Eagle Point Solar’s conventional third-party financing arrangement with the City of Dubuque would make it a “public utility” with many obligations and requirements. This is relevant to Wisconsin due to a “gray area” of Wisconsin’s public utility law (PSC 119) that is unclear about customer access to renewable energy.

The Environmental Law and Policy Center (ELPC) joined with Eagle Point Solar to represent the case to the courts opposing the utilities. Their case prevailed. Salient points of the Iowa Supreme Court decision include: “…The transaction may be characterized as a sale of electricity or a method of financing a solar rooftop operation. Neither characterization is inaccurate. But most importantly, we have little doubt that the transaction is an arms-length transaction between a willing buyer and a willing seller. There is no reason to suspect any unusual potential for abuse. From a consumer protection standpoint, there is no reason to impose regulation on this type of individualized and negotiated transaction.”  (Opinion at 46.) “In our view, in this case, the balance of factors point away from a finding that the third-party PPA for a behind-the-meter solar generation facility is sufficiently “clothed with the public interest” to trigger regulation.”  (Opinion at 51.) See the full Opinion of the Iowa Supreme Court