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State ex rel. Utilities Commission v. North Carolina Waste Awareness and Reduction Network

Court of Appeals of North Carolina

September 19, 2017

STATE OF NORTH CAROLINA EX REL. UTILITIES COMMISSION; PUBLIC STAFF-NORTH CAROLINA UTILITIES COMMISSION; DUKE ENERGY CAROLINAS, LLC; DUKE ENERGY PROGRESS, LLC; VIRGINIA ELECTRIC AND POWER COMPANY, d/b/a Dominion North Carolina Power, Defendants,
v.
NORTH CAROLINA WASTE AWARENESS AND REDUCTION NETWORK, Plaintiff.

          Heard in the Court of Appeals 23 February 2017.

         Appeal by Plaintiff from order entered 15 April 2016 by the North Carolina Utilities Commission, No. SP-100, Sub 31

          Staff Attorney Robert B. Josey, Jr. and Staff Attorney David T. Drooz, for Defendant-Appellee Public Staff - North Carolina Utilities Commission.

          Allen Law Offices, PLLC, by Dwight W. Allen and Lawrence B. Somers, for Defendants-Appellees Duke Energy Progress, LLC, and Duke Energy Carolinas, LLC.

          McGuireWoods, LLP, by Brett Breitschwerdt and Andrea R. Kells, for Defendant-Appellee Virginia Electric & Power Company, d/b/a Dominion North Carolina Power.

          The Law Offices of F. Bryan Brice, Jr., by Matthew D. Quinn and John D. Runkle for Plaintiff-Appellant North Carolina Waste Awareness and Reduction Network.

          Burns, Day & Presnell, P.A., by Daniel C. Higgins, for amicus curiae North Carolina Eastern Municipal Power Agency, North Carolina Municipal Power Agency Number 1 and Electricities of North Carolina, Inc.

          Southern Environmental Law Center, by David Neal and Lauren Bowen, for amicus curiae North Carolina Interfaith Power and Light, North Carolina Council of Churches, Greenfaith, The Christian Coalition of America, Young Evangelicals for Climate Action, and Creation Care Alliance of Western North Carolina.

          Nelson Mullins Riley & Scarborough LLP, by Joseph W. Eason, for amicus curiae North Carolina Electric Membership Corporation.

          OPINION

          MURPHY, Judge.

         Plaintiff North Carolina Waste Awareness and Reduction Network ("NC WARN") appeals from an order of the North Carolina Utilities Commission (the "Commission") concluding that NC WARN was operating as a "public utility, " subject to the Commission's jurisdiction, when it entered into an agreement with a Greensboro church (the "Church") to install and maintain a solar panel system on the Church's property and to charge the Church based on the amount of electricity that the system generated. The Commission also concluded that NC WARN's actions constituted a provision of "electric service" to the Church, infringing on the utility monopoly of Duke Energy Progress, LLC, and Duke Energy Carolinas, LLC, (collectively "Duke Energy") in violation of Chapter 62 of the North Carolina General Statutes.

         We agree and conclude that NC WARN is acting as a "public utility" by operating its system of solar panels for the Church on the Church's property. Therefore, we affirm the order of the Commission.

          Background

         In December 2014, NC WARN entered into a "Power Purchase Agreement" (the "Agreement") with the Church. The Agreement provided that NC WARN would install and maintain a system of solar panels on the Church's property. Under the Agreement, the solar panels would "remain the property of NC WARN" and the Agreement did not "constitute a contract to sell or lease" the solar panels to the Church. In exchange, the Church agreed to compensate NC WARN based on the amount of "electricity produced by the system" at a rate of $0.05 per kWh.

         In June 2015, NC WARN filed a request with the Commission for a declaratory ruling that its proposed activities under the Agreement would not cause it to be regarded as a "public utility" pursuant to the Public Utilities Act (the "Act").

         The Commission, however, concluded that NC WARN's arrangement with the Church constituted a public utility in violation of the Act. In addition, the Commission ordered that NC WARN refund its charges to the Church and pay a fine of $200 for each day that NC WARN provided electric service to the Church through the solar panel system.[1] NC WARN timely appealed the Commission's order.

         Analysis

          The dispositive issue on appeal is whether the Commission correctly determined that NC WARN was operating as a "public utility." See State ex rel. N.C. Utils. Comm'n v. New Hope Rd. Water Co., 248 N.C. 27, 29, 102 S.E.2d 377, 379 (1958) ("The Commission has no jurisdiction over these respondents unless they are public utilities within the meaning of [the Public Utilities Act]."). This issue is a question of law, which is reviewed de novo by our Court. N.C. G.S. § 62-94(b) (2015) ("[T]he court shall decide all relevant questions of law [and] interpret constitutional and statutory provisions."); New Hope, 248 N.C. at 30, 102 S.E.2d at 379 ("[T]he question of whether or not a particular company or service is a public utility is a judicial one which must be determined as such by a court of competent jurisdiction."); State ex rel. Utils. Comm'n v. Envir. Defense Fund, 214 N.C.App. 364, 366, 716 S.E.2d 370, 372 (2011) ("Questions of law are reviewed de novo.").

         The Public Utilities Act, found in Chapter 62 of our General Statutes, gives the Commission the power to supervise and control the "public utilities" in our State. N.C. G.S. § 62-30 (2015). A "public utility" as defined in the Act is any entity which owns and operates "equipment and facilities" that provides electricity "to or for the ...


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