State of NC ex rel. Utils. Comm'n v. N.C. Waste Awareness & Reduction Network
805 S.E.2d 712
N.C. Ct. App.2017Background
- NC WARN contracted (Dec 2014) to install and maintain solar panels on a Greensboro church’s roof; panels remained NC WARN’s property.
- The Church agreed to pay NC WARN $0.05 per kWh for electricity produced by the system.
- NC WARN sought a declaratory ruling from the North Carolina Utilities Commission that this arrangement did not make it a "public utility."
- The Commission concluded NC WARN was a public utility, ordered refunds to the Church, and assessed daily fines (waived if refunds and cessation occurred).
- NC WARN appealed; the Court of Appeals reviewed de novo and affirmed the Commission, holding NC WARN subject to Chapter 62 regulation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NC WARN is a "public utility" under N.C.G.S. § 62-3(23) | NC WARN: system serves a single nonprofit on-site and therefore is not serving the public | Commission/Duke: NC WARN produces electricity for compensation and its excess flows to the grid, effectively serving Duke’s customers and competing with the monopoly | Court: NC WARN is a public utility and subject to regulation |
| Whether NC WARN’s arrangement constitutes provision of "electric service" that infringes the regulated utility monopoly | NC WARN: arrangement is a private contract for on-site generation; form of compensation (per kWh) does not change private nature | Commission/Duke: charging per kWh for electricity produced is sale of electric service and competes with Duke Energy in its territory | Court: arrangement constitutes electric service in competition with Duke and violates Chapter 62 |
| Whether serving a selected class (nonprofits) avoids regulation | NC WARN: limited, self-selected class (nonprofits/churches) should not be "public" | Commission/Duke: permitting carve-outs would erode the regulated monopoly and upset marketplace balance; Simpson factors apply | Court: selective service does not avoid public-utility status; Simpson factors support regulation |
Key Cases Cited
- State ex rel. Utils. Comm'n v. New Hope Rd. Water Co., 248 N.C. 27 (1958) (court decides whether an enterprise is a public utility)
- Utilities Comm'n v. Carolina Tel. & Tel. Co., 267 N.C. 257 (1966) (one offers service to the public when holding out to serve all who apply up to capacity)
- Utilities Comm'n v. Simpson, 295 N.C. 519 (1978) (factors for determining when a service to a selected class is nevertheless "to the public")
- State ex rel. Utils. Comm'n v. Envir. Defense Fund, 214 N.C. App. 364 (2011) (questions of law reviewed de novo)