Sz Enterprises, LLC D/B/A Eagle Point Solar v. Iowa Utilities Board, a Division of the Department of Commerce, State of Iowa
850 N.W.2d 441
| Iowa | 2014Background
- Eagle Point proposed a third-party PPA with the City of Dubuque to install, own, operate, and finance a city-owned PV system, with the city purchasing all electricity on a per kWh basis and escalating 3% annually.
- The PV system would be located on the city’s side of Interstate Power’s meter, with the city remaining connected to the grid for remaining needs; Eagle Point would own the system and sell power generated.
- IUB issued a declaratory ruling that Eagle Point would be a public utility (and thus prohibited under exclusive service territory rules); it did not address electric utility status.
- Eagle Point petitioned for judicial review; the district court reversed, concluding Eagle Point’s behind-the-meter generation was not a public utility and not an electric utility.
- The IUB and intervenors appealed; Eagle Point cross-appealed challenging the district court’s electric utility holding; the Iowa Supreme Court affirmed the district court.
- The court performed de novo review (no deference to IUB) and applied Northern Natural Gas and Serv-Yu factors to decide whether Eagle Point is a public utility.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Eagle Point a public utility under Iowa Code 476.1? | IUB contends Eagle Point furnishes electricity to the public for compensation via sale of power. | Eagle Point argues the arrangement is behind-the-meter, not public use, and not a public utility. | No; Eagle Point is not a public utility. |
| Is Eagle Point an electric utility under 476.22 if not a public utility? | The context may broaden the electric utility definition beyond public utility. | Electric utility should not be broader than public utility; context does not expand the definition here. | No; Eagle Point is not an electric utility. |
| Should the court defer to the IUB's statutory interpretation under 17A.19(10)(l)? | IUB’s expertise warrants deference in interpreting public/electric utility terms. | Because statutory definitions exist and terms are not highly specialized, deference is not warranted. | Deference is not warranted; de novo review applies. |
| Do the Northern Natural Gas and Serv-Yu factors support treating Eagle Point as a public utility? | IUB’s approach aligns with historical tests showing clothed public interest. | Serv-Yu factors, applied case-by-case, do not show sufficient public interest; behind-the-meter is private. | Factors support not classifying Eagle Point as a public utility. |
Key Cases Cited
- Northern Natural Gas Co. v. Iowa Utils. Bd., 161 N.W.2d 111 (Iowa 1968) (defined 'to the public' as sales to sufficient of the public; eight-factor Serv-Yu test)
- Northern Natural Gas Co. v. Iowa Utils. Bd., II, 679 N.W.2d 629 (Iowa 2004) (adopted practical, multifactor serv-Yu framework; case-by-case public interest inquiry)
- Hawkeye Land Co. v. Iowa Utils. Bd., 847 N.W.2d 199 (Iowa 2014) (IUB not always entitled to deference; public utility framing in transmission context)
- City of Coralville v. Iowa Utils. Bd., 750 N.W.2d 523 (Iowa 2008) (deference to IUB in interpreting 'rates and services' under 476.1)
- NextEra Energy Resources LLC v. Iowa Utils. Bd., 815 N.W.2d 30 (Iowa 2012) (limits deference for some statutory interpretations; context-dependent)
- Renda v. Iowa Civil Rights Comm’n, 784 N.W.2d 8 (Iowa 2010) (establishes framework for when agencies receive interpretive deference)