Durham environmental advocacy group NC WARN is asking the state appeals court to break Duke Energy’s longstanding monopoly on electricity sales in the state by letting NC WARN resume selling solar-generated power directly to a Greensboro church.
NC WARN is asking the N.C. Court of Appeals to do what the N.C. Utilities Commission refused to do in April when it slapped NC WARN with a $200-a-day fine totaling $60,000. The Utilities Commission agreed with Charlotte-based Duke that state law does not allow NC WARN or other “third parties” to compete for electricity customers against monopoly utilities.
NCWARN has until Jan. 3 to submit its legal filings to the appellate court; oral arguments are expected sometime next year. A lot is riding on the case, which could open up North Carolina’s power market to private solar developers selling electricity directly to homeowners and businesses if NC WARN prevails.
NC WARN director Jim Warren said the Greensboro church is a test case for consumer choice and for fuel choice.
“We absolutely believe we can win at the Court of Appeals,” Warren said. “From Day One, we have had a very strong legal argument.”
The organization argues that it’s offering a financing arrangement to Faith Community Church, which will own the $20,000 solar panels once they’re paid off. The financing argument was rejected by Duke, the Utilities Commission and the Public Staff, the state’s advocacy agency for utility consumers.
The commissioners said in their April ruling that NC WARN “does not explain why sales of power are a necessary feature of its program. Adding this feature provides no apparent benefit to NC WARN’s program; rather it only converts a perfectly legal transaction into an unlawful one.”
The Public Staff told the appellate judges in a Dec. 19 filing that the monopoly system works only if it is not undermined by letting unregulated competitors cherry-pick customers without any legal obligation to provide electricity to everyone. The Public Staff told the appellate court that the arrangement between NC WARN and the church does not include a total amount owed or other payment terms standard in a financial contract.
“Clearly, the only thing of value FCC (Faith Community Church) is obtaining for its payments under this agreement is the electricity created by the PV (photovoltaic) system owned by NC WARN,” the Public Staff wrote.
The Utilities Commission in April ordered NC WARN to return all sales proceeds to the church with 10 percent interest. NC WARN put the money into escrow until the courts resolve the matter.
Duke contends NC WARN’s stated rationale is a smokescreen.
“The fact that NC WARN is only serving one customer does not conceal its greater ambition to serve an expanding customer base,” Duke wrote in a court filing. “This case represents NC WARN’s attempt to enter the retail electricity market despite North Carolina’s long-standing policy of having a regulated market to ensure reliability and affordability for the public.”
The case, which started with NC WARN’s deal with Faith Community Church in July 2015, could last into 2018, as both NC WARN and Duke are expected appeal to the state supreme court if they lose at the court of appeals.
NC WARN was founded in 1988 to fight hazardous waste incinerators and subsequently expanded its watchdog mission to oppose nuclear power plants and coal-burning power plants. The group is now focusing on global warming solutions and promoting renewable resources like solar power. The one consistent theme in NC WARN’s campaigns is the group’s willingness to file legal challenges against giant utility companies and publicly criticize regulators.
NC WARN had been selling power to the church for 5 cents a kilowatt hour, less than half the rate charged by Duke. NC WARN told the appellate court it is “engaged in an altruistic program” to help the church buy solar panels. In the wake of the Utility Commission’s rebuke, NC WARN suspended its electricity sales to the Faith Community Church after collecting less than $250 over nine months, and the Utilities Commission has suspended its fine, as the dispute moves through the courts.
“It is crucial to understand that NC WARN and Duke are not in competition at all,” NC WARN wrote in its court filing. “In the Greensboro service area, Duke does not have a program similar to that offered by NC WARN.”
Over the years private solar developers have had no luck cracking North Carolina’s monopoly system, because the Utilities Commission has repeatedly said they always come down to retail power sales, no matter what they are called.
“Competition results in duplication of investment, economic waste and inefficient service, and high rates,” the commissioners wrote in their April decision against NC WARN.