Supreme Court hears solar case, could set precedent

NC WARN, a climate change group that has fought Duke Energy and other large utilities for years, installed solar panels on the roof of a Greensboro church in 2015 and let the church pay for the system by charging a cut rate for power. Duke, the North Carolina Utilities Commission and the state Court of Appeals have all said it was an illegal sale of electricity, that NC WARN was essentially trying to become its own utility.

"This is not an altruistic thing," Duke attorney Dwight Allen told Supreme Court justices Tuesday. "It's almost exploitive."

The environmental group pushed the case to the state Supreme Court, where NC WARN's attorney argued that the group isn't selling electricity, and even if it is, it's not selling to "the public," a potentially important distinction in state utility law.

One church, attorney Matthew Quinn said, isn't the public.

"To say it's just one, well, what about the next one?" Justice Paul Newby responded.

Duke was joined in this case by the Utilities Commission's Public Staff, a state entity that represents customers and is tasked with pushing back against Duke rate increases on behalf of the public. If NC WARN's deal with Faith Community Church stands, attorney Robert Josey said, the precedent would allow others to "cherry pick" customers, signing them to solar deals and leading to rate increases for remaining traditional customers, since the utility would have the same basic costs to serve fewer customers.

It was difficult to judge the court's direction based on questions asked Tuesday, though justices repeatedly questioned the idea that NC WARN isn't selling power. At one point, even Quinn referred to "the sale of power" as he tried to make a broader point. Justice Sam Ervin IV interrupted him.

"I'm not sure you meant to say that," he said.

The Court of Appeals decision was 2-1 against NC WARN, with the dissenting judge arguing that a solar deal with a single customer wasn't enough to qualify the group as a public utility under state law.

"Even if NC WARN is selling electricity, it's not doing it to the public," Quinn said Tuesday.

Duke and the Public Staff both argued that a win for NC WARN would carve out an unregulated sector of the state's electricity market.

Quinn argued that the group's agreement with the church is just a financing vehicle, already unregulated by state utility codes.

"Fundamentally, this is a case about overregulation," Quinn said.