Court Opinion

ID: 4204359
Source: CourtListenerOpinion
Date Created: 2017-09-19 12:10:31.800937+00
Date Added: 2024-06-11T09:27:49.115522
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                No. COA16-811

                            Filed: 19 September 2017

North Carolina Utilities Commission, No. SP-100, Sub 31

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.

      Appeal by Plaintiff from order entered 15 April 2016 by the North Carolina

Utilities Commission. Heard in the Court of Appeals 23 February 2017.

      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.
   STATE OF NC EX REL. UTILS. COMM’N V. N.C. WASTE AWARENESS & REDUCTION
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                                  Opinion of the Court

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

      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.

      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.

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                                      Opinion of the Court

                                        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

       1 The Commission also provided that all penalties imposed “shall be waived upon NC WARN’s
honoring its commitment to refund all billings to the Church and ceasing all future sales.”

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                                  Opinion of the Court

      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

public for compensation.” N.C.G.S. § 62-3(23)(a) (2015).

      In the present case, there is no doubt that NC WARN owns and operates

equipment (a system of solar panels) which produces electricity and that NC WARN

receives compensation from the Church in exchange for the electricity produced by

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                                    Opinion of the Court

the system. The dispute here is whether NC WARN is producing electricity “for the

public,” therefore, making it a “public utility.”

      “The public does not mean everybody all the time.” State ex rel. Utils. Comm’n

v. Simpson, 295 N.C. 519, 522, 246 S.E.2d 753, 755 (holding that the defendant was

offering his two-way radio communication service to “the public” even though he was

offering the service exclusively to members of the Cleveland County Medical Society,

which was comprised of only 55 to 60 people) (citation omitted). Instead:

             One offers service to the ‘public’ within the meaning of
             [N.C.G.S. § 62-3(23)(a)(1)] when he holds himself out as
             willing to serve all who apply up to the capacity of his
             facilities. It is immaterial, in this connection, that his
             service is limited to a specified area and his facilities are
             limited in capacity. For example, the operator of a single
             vehicle within a single community may be a common
             carrier.

State ex rel. Utils. Comm’n v. Carolina Tel. & Tel. Co., 267 N.C. 257, 271, 148 S.E.2d
100, 111 (1966) (offering his mobile radio telephone service in the Kinston area to an

anticipated 33 subscribers). However, this framework “is merely the beginning and

not the end of our inquiry[,]” as a person might still be offering his services to the

“public” even when he serves only a selected class of persons. Simpson, 295 N.C. at

525, 246 S.E.2d at 757. In further deconstructing the definition of “public,” within

the context of a selected class of consumers our Supreme Court instructed that

whether an entity or individual is providing service to the “public”:

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                                         Opinion of the Court

               depends . . . on the regulatory circumstances of the
               case . . . [including] (1) nature of the industry sought to be
               regulated; (2) type of market served by the industry; (3) the
               kind of competition that naturally inheres in that market;
               and (4) effect of non-regulation or exemption from
               regulation of one or more persons engaged in the industry.

Id. at 524, 246 S.E.2d at 756. This interpretation is meant to be flexible so as to

adjust according to “the variable nature of modern technology,” and, ultimately, the

touchstone of our analysis is: what “accomplish[es] the legislature’s purpose and

comports with its public policy.” Id. at 524, 246 S.E.2d at 757 (citation and internal

quotation marks omitted).

   i.       The Simpson Factors

        In the instant case, NC WARN seeks “to provide affordable solar electricity to

non-profits.” If we uphold the Agreement NC WARN has in place with the Church,

NC WARN would like “to provide similar projects to other non-profits in the future.”

In that way, NC WARN serves, or seeks to serve, a subset of the population, just as

the defendant did in Simpson. Therefore, in order to evaluate whether this activity

violates the Act, we must consider the factors outlined by our Supreme Court.2

        2  Even though NC WARN is only offering its services to a subset of the population, it has
offered to provide all of the energy produced by the solar system located on the Church’s roof to the
Church itself, and in this way NC WARN has shown itself to be willing to serve the Church up to the
full capacity of NC WARN’s facility – in this case up to the full capacity of the solar system at issue.
Moreover, the Agreement provides that “any electricity generated by the system, for example, during
times of low on-site usage, will be put onto the power grid and credited against the kilowatt (kWh) sold
to [the Church] by Duke Energy.” The transfer of energy produced by the solar system to the energy
grid for unrestricted use by any and all of Duke Energy’s Greensboro customers leads us to conclude

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                                        Opinion of the Court

       Discussion of (1) the nature of the industry and (2) type of market served by

the industry overlap. The Greensboro area has been assigned exclusively to Duke

Energy, just as other regions of the state are exclusively assigned to other electricity

suppliers. North Carolina law precludes retail electric competition and establishes

regional monopolies on the sale of electricity based on the premise that the provision

of electricity to the public is imperative and that competition within the marketplace

results in duplication of investment, economic waste, inefficient service, and high

rates. Carolina Tel. & Tel. Co., 267 N.C. at 271, 148 S.E.2d at 111 (“[N]othing else

appearing, the public is better served by a regulated monopoly than by competing

suppliers of the service.”). In particular, although the provision of electricity might

be lucrative in some areas, it may also be costly in others. Monopolies exist in North

Carolina so that it makes financial sense for utilities to serve all North Carolinians

and so that service can be provided at a reasonable price. See Simpson, 295 N.C. at

525, 246 S.E.2d at 757 (recognizing that exempting certain radio service providers

from regulation would “leave burdensome, less profitable service on the regulated

portion resulting inevitably in higher prices for the service”).

       For these reasons, the legislature has elected to prohibit (3) any competition

that might otherwise naturally exist in the market and to limit providers of electricity

that NC WARN is in fact “hold[ing itself] out as willing to serve all who apply up to the capacity of
[its] facilities.” Id. at 522, 246 S.E.2d at 755.

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                                       Opinion of the Court

to specific providers in different regions of the state. Id. at 271, 148 S.E.2d at 111.

NC WARN’s activities are in direct competition with Duke Energy’s services, as both

entities are selling kilowatt hours of electricity to Duke Energy’s customers.

       Perhaps most importantly to our review of this case, however, is an evaluation

of (4) the effect of non-regulation or exemption from regulation of one or more persons

engaged in the industry. NC WARN maintains that it only intends to provide its

services “to self-selected non-profit organizations” and has no desire to offer its

services to all of Duke Energy’s customers.3 However, the Supreme Court of North

Carolina previously rejected this same argument in Simpson when the defendant

argued that he was spared from regulation because he only endeavored to provide his

services to the Cleveland County Medical Society. 295 N.C. at 525, 246 S.E.2d at 757.

In that case, the Supreme Court concluded, “[w]ere a definition of ‘public’ adopted

that allowed prospective offerors of services to approach these separate classes

without falling under the statute, the industry could easily shift from a regulated to

a largely unregulated one.” Id. at 525, 246 S.E.2d at 757.

       Simply put, Duke Energy has been granted an exclusive right to provide

electricity in return for compensation within its designated territory and with that

       3   In its request for declaratory judgment, NC WARN acknowledges its intent to expand this
program in stating, “An adverse ruling by the Commission would restrict NC WARN’s ability to enter
into similar funding mechanisms through [Power Purchase Agreements] with other churches and non-
profits, as funds become available.” {R. p. 9}

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                                         Opinion of the Court

right comes the obligation to serve all customers at rates and service requirements

established by the Commission. NC WARN desires to serve customers of its own

choosing within Duke Energy’s territory at whatever rates and service requirements

it sets for itself without oversight. Although NC WARN at the present date is only

providing its services to a small number of organizations in the Greensboro area, if it

were allowed to generate and sell electricity to cherry-picked non-profit organizations

throughout the area or state, that activity stands to upset the balance of the

marketplace. Specifically, such a stamp of approval by this Court would open the

door for other organizations like NC WARN to offer similar arrangements to other

classes of the public, including large commercial establishments, which would

jeopardize regulation of the industry itself.4

    ii.       Legislative Intent

          Under Simpson, our analysis of whether an entity is selling energy to the

“public” ultimately hinges on the query: what accomplishes the legislature’s purpose

and comports with public policy? Simpson, 295 N.C. at 524, 246 S.E.2d at 756-57

(citation omitted). Chapter 62 of the North Carolina General Statutes contains the

          4
          The Dissent notes that within the last decade the Commission concluded in two separate
cases that “similar” arrangements by third-party solar services providers did not turn those providers
into public utilities. However, those cases are not before us now, nor are “past decisions of a previous
panel of the North Carolina Utilities Commission . . . binding on later panels of the Commission or
this Court.” Utils. Comm’n v. Carolina Water Serv., Inc. of N.C., 225 N.C. App. 120, 131 n. 6, 738
S.E.2d 187, 194 n. 6 (2013). Accordingly, they have no bearing on the present appeal.

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                                   Opinion of the Court

Public Utilities Act, which establishes a comprehensive set of regulations for public

utilities in the state. The “Declaration of policy” proclaims, inter alia, that “[i]t is

hereby declared to be the policy of the State of North Carolina: . . . (2) To promote the

inherent advantage of regulated public utilities[.]” N.C.G.S. § 62-2(a)(2) (2015).

Doing so allows for the “availability of an adequate and reliable supply of electric

power . . . to the people, economy and government of North Carolina[.]” Id. § 62-2(b).

In that way, the declaration clearly reflects the policy adopted by the legislature that

a regulated monopoly best serves the public, as opposed to competing suppliers of

utility services. Carolina Tel. & Tel. Co., 267 N.C. at 271, 148 S.E.2d at 111.

      It is also true that the General Assembly has recently declared that it is also

the policy of this state “[t]o promote the development of renewable energy and energy

efficiency.” N.C.G.S. § 62-2(a)(10); see also N.C.G.S. § 105-277 (2015) (exempting from

taxation solar systems used to heat a property). However, statutory pronouncements

of policy are meant to coexist with North Carolina’s well-established ban on third-

party sales of electricity rather than supersede it until such time as the monopoly

model is abandoned by our legislature. See Taylor v. City of Lenoir, 129 N.C. App.
174, 178, 497 S.E.2d 715, 719 (1998) (“[S]tatutes relating to the same subject or

having the same general purpose, are to be read together, as constituting one

law . . . such that equal dignity and importance will be given to each.” (citation and

internal quotation marks omitted)).

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                                   Opinion of the Court

       If the legislature desires to except these types of third-party sales, it is within

its province to do so and it is not for this Court to determine the advisability of any

change in the law now declared in the Public Utilities Act. See State ex rel. Utils.

Comm’n v. Lumbee River Elec. Membership Corp., 275 N.C. 250, 257, 166 S.E.2d 663,

668 (1969) (“It is for the Legislature, not for this Court or the Utilities Commission,

to determine whether the policy of free competition between suppliers of electric

power or the policy of territorial monopoly or an intermediate policy is in the public

interest.”).

                                      Conclusion

       We hold, therefore, that NC WARN is operating as a public utility within the

meaning of N.C.G.S. § 62-3. Consequently, NC WARN is subject to regulation by the

Commission. Accordingly, we affirm the order of the Commission from which NC

WARN appealed.

       AFFIRMED.

       Judge STROUD concurs.

       Judge DILLON dissents by a separate opinion.

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 No. COA16-811 – N.C. UTILS. COMM’N v. NC WARN

      DILLON, Judge, dissenting.

      I conclude that NC WARN is not acting as a “public utility” because the solar

panel system at issue is not serving “the public,” but rather is designed to generate

power for a single customer (the “Church”) from the Church’s property. Therefore, I

respectfully dissent.

      The Public Utilities Act gives the Commission the power to supervise and

control the “public utilities” in our State. N.C. Gen. Stat. § 62-30 (2015). A “public

utility” as defined by our General Assembly is any entity which “own[s] or operate[s]”

“equipment or facilities” that provide “electricity” “to or for the public for

compensation.” N.C. Gen. Stat. § 62-3(23)(a) (2015) (emphasis added).

      I agree with the majority that NC WARN “owns and operates” “equipment” (a

system of solar panels) which provides “electricity” “for compensation.” However, I

disagree with the majority that the equipment at issue here is designed to produce

electricity “for the public,” because the system of solar panels in this case is designed

to produce electricity on the property of a single customer for that customer’s sole use.

      Our Supreme Court has had occasion to define the contours of what constitutes

a “public utility,” subject to regulation by our Utilities Commission.        But every

instance cited by the majority where our Supreme Court has determined that a

“public utility” exists involved equipment or a facility which served multiple

customers. The majority’s decision today appears to be the first in North Carolina

where equipment designed to generate power (or other utility-type service) for a
                          N.C. UTILS. COMM’N V. NC WARN

                                  DILLON, J., dissenting

single customer from the customer’s own property is held to be a “public utility”

subject to regulation by our Utilities Commission.

      In 1958, for instance, our Supreme Court stated that “the true criterion by

which to determine whether a plant or system is a public utility is whether or not the

public may enjoy it of right or by permission only[.]” Utilities Comm’n v. New Hope,

248 N.C. 27, 30, 102 S.E.2d 377, 379 (1958). The Court further stated that “an

attempt to declare a company or enterprise to be a public utility, where it is inherently

not such, is, by virtue of the guaranties of the federal Constitution, void wherever it

interferes with private rights of property or contract.” Id. NC WARN’s solar panel

equipment at issue here is not designed to be enjoyed by the public either by right or

by permission; rather, the system was designed only to be enjoyed by the Church,

pursuant to a private contractual agreement.

      Ten years later, in 1968, our Supreme Court considered the definition of “the

public” in the context of utilities regulation in Utilities Comm’n v. Carolina Telegraph

Co., 267 N.C. 257, 148 S.E.2d 100 (1966), a case in which a company sought to

establish a mobile radio telephone service for a small area with an estimated thirty-

three (33) customers. Our Supreme Court held that the operation was a public utility,

stating:

             One offers service [to] the “public” within the meaning of
             th[e] statute when he holds himself out as willing to serve
             all who apply up to the capacity of [his] facilities. . . . For
             example, the operator of a single vehicle within a single

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                          N.C. UTILS. COMM’N V. NC WARN

                                 DILLON, J., dissenting

             community may be a common carrier.

Id. at 268, 148 S.E.2d at 109. However, NC WARN’s solar panel “facility” is markedly

different than the “public utility” described by the Supreme Court in this 1968

opinion. Where the “single vehicle” in the Supreme Court’s example is designed to

serve multiple members of the public, the solar panel equipment at issue here is

designed to serve only one customer, and has not been made available to any other

customer.

      A decade later, in 1978, in the case relied upon by the majority today, our

Supreme Court clarified Carolina Telegraph by holding that a system may be serving

“the public” even where it serves only a “selected class of persons” and is not designed

to serve “everybody all the time.” Utilities Comm’n v. Simpson, 295 N.C. 519, 522,

246 S.E.2d 753, 755 (1978). In Simpson, the Court articulated a list of factors, cited

by the majority, which inform whether a particular enterprise is considered a “public

utility.” I believe the majority applied these factors much more broadly than Simpson

intends.

      In Simpson, our Supreme Court provides a guide as to the application of these

factors by referencing a number of cases from other jurisdictions, concluding that

those cases all “seem correctly decided.” Id. at 524, 246 S.E.2d at 756. Several of

those cases cited concluded that certain operations – each of which were designed to

serve multiple customers – constituted “public utilities,” where each operation was

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                           N.C. UTILS. COMM’N V. NC WARN

                                  DILLON, J., dissenting

designed to serve a select class of customers rather than the public at large. However,

our Supreme Court also cited a Pennsylvania case which concluded that the

furnishing of electric service to tenants of a single apartment building by the building

owner (where the owner bought electricity from the public utility company and then

resold it to its tenants) did not constitute the operation of a public utility: “Here . . .

those to be serviced consist only of a special class of persons – those to be selected as

tenants – and not a class opened to the indefinite public.         Such persons clearly

constitute a defined, privileged[,] and limited group and the proposed service to them

would be private in nature.” Id. at 524-25, 246 S.E.2d at 756 (quoting Drexelbrook v.

Pennsylvania Public Utility Comm’n, 418 Pa. 430, 436, 212 A.2d 237, 240 (1965). NC

WARN’s system is designed to serve a group even more limited (a single customer)

than the group served by the system in the Pennsylvania case (tenants in a single

building).

       In the years since Simpson was decided, our appellate courts have applied

Simpson to determine whether a certain enterprise constituted a “public utility.”

Many of these cases are cited by the Commission in support of its order. However,

unlike the present case, each of those cases involved a system which provided some

utility service to multiple consumers accessing the system. See Simpson, 295 N.C. at

520, 246 S.E.2d at 754 (two-way radio service operated in conjunction with telephone

answering service, using tower that serves multiple subscribers); Bellsouth Carolinas

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                          N.C. UTILS. COMM’N V. NC WARN

                                 DILLON, J., dissenting

PCS, L.P. v. Henderson Cty. Zoning Bd. Of Adjustment, 174 N.C. App. 574, 621 S.E.2d
270 (2005) (cellular telephone company operating cellular telephone tower serving

multiple customers); Utilities Comm'n v. Mackie, 79 N.C. App. 19, 338 S.E.2d 888

(1986), aff'd as modified, 318 N.C. 686, 351 S.E.2d 289 (1987) (sewer and water

service with approximately twenty-five (25) customers served from a single tank);

Utilities Comm'n v. Buck Island, Inc., 162 N.C. App. 568, 592 S.E.2d 244 (2004)

(facilities used to produce water and treat sewage in housing development); Shepard

v. Bonita Vista Properties, L.P., 191 N.C. App. 614, 664 S.E.2d 388 (2008), aff'd, 363
N.C. 252, 675 S.E.2d 332 (2009) (campground charging the occupants of each

campsite for use of electricity from a single system at above-market price).

      In conclusion, I believe that our Supreme Court’s jurisprudence compels the

conclusion in the present case that NC WARN’s equipment, which is designed to

generate power for a single customer, is not a “public utility.” This conclusion is also

consistent with the General Assembly’s declared policy in the Public Utilities Act “[t]o

promote the development of renewable energy” and “encourage private investment in

renewable energy and energy efficiency.” See N.C. Gen. Stat. § 62-2(a)(10); see also

N.C. Gen. Stat. 105-277 (exempting solar panel systems used to heat a property from

taxation); see also Simpson, 295 N.C. at 524, 246 S.E.2d at 757 (stating that the

definition of “public” must “accomplish the legislature’s purpose and comport[] with

its public policy”) (internal marks and citation omitted)).

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                         N.C. UTILS. COMM’N V. NC WARN

                                DILLON, J., dissenting

      Further, this conclusion is consistent with the prior opinions of the

Commission in In re Application of FLS YK Farm, LLC, N.C.U.C. Docket No. RET-4,

Sub 0 (April 22, 2009) and In re Request by Progress Solar Investments, LLC, N.C.U.C.

Docket No. SP-100, Sub 24 (Nov. 25, 2009). In those cases, the Commission concluded

that the entities at issue were not public utilities where the entities “owne[d] or

operat[ed] solar thermal panels located on-site to a single entity pursuant to a

‘bargained for’ transaction[.]” Progress Solar, N.C.U.C. Docket No. SP 100, Sub 24;

FLS YK Farm, N.C.U.C. Docket No. RET-4, Sub 0. And in FLS YK Farm, the

Commission noted that “FLS YK Farm will not be holding itself out to provide solar

thermal heat production to the general public, but rather plans to sell the BTUs

(“British Thermal Units”) created by its on-site thermal panels only to the [Inn] and

solely for the purpose of heating water owned by [the Inn].”

      In the present case, however, the Commission has reached an opposite

conclusion in spite of the fact that, like the providers in FLS YK Farm and Progress

Solar, NC WARN owns and maintains the equipment on the property of a single

customer which is designed to generate power from the customer’s property for the

sole use of that customer (and for no other NC WARN customer). The Commission

seems to distinguish NC WARN’s arrangement with the Church from its prior

decisions merely based on the manner NC WARN is being compensated by the

Church. Indeed, at oral argument, counsel for the Commission stated that if NC

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                           N.C. UTILS. COMM’N V. NC WARN

                                  DILLON, J., dissenting

WARN’s arrangement with the Church were structured as a lease agreement, rather

than as a contract where NC WARN was compensated based on the Church’s usage,

the Commission would not be challenging the arrangement in court.

      However, to me, the manner in which NC WARN and the Church choose for

NC WARN to be compensated – based on usage rather than based on a flat rate per

month – does not convert NC WARN’s solar panel system on the Church’s property

into a public utility. Indeed, a hardware store renting a portable generator to a

homeowner would not be acting as a public utility if it chose to charge the customer,

at least in part, based on the power generated by the generator rather than solely at

a flat daily rate. Such billing is a logical method by which private parties should be

free to contract to account for wear and tear on the system itself. Certainly it is true

that the more the system operates, the quicker its components deteriorate and need

maintenance, repair, or replacement. And N.C. Gen. Stat. § 62-3(23) does not deem

the form of compensation relevant to the determination of whether a system is serving

“the public.” Certainly, the Commission would not argue that Duke Energy would

cease operating as a public utility subject to regulation if it changed its billing method

to a flat monthly rate for unlimited access to its power grid.

      Additionally, I would point out that the fact that NC WARN might, in the

future, enter into similar private contracts with other entities seeking to install other

solar panel systems does not compel the conclusion that NC WARN is holding itself

                                            7
                                N.C. UTILS. COMM’N V. NC WARN

                                         DILLON, J., dissenting

out as willing to serve “all who apply up to the capacity of [the] facilit[y]” at issue here.

Indeed, a hardware store does not act as a public utility simply because it leases out

more than one generator. The Simpson factors focus on the function of the single

system or facility at issue, not the company offering the service, the company’s

marketing of its service, or the manner of compensation given to the company in

exchange for the service. Here, NC WARN is not holding itself out as willing to serve

others up to the capacity of the Church’s solar system. NC WARN’s system will

produce electricity solely for the Church and the power generated by the system is

not accessible by NC WARN or any other party or entity.5 I disagree with the

majority’s characterization of the Church itself – a single customer – as “the public.”

See Simpson, 295 N.C. at 524, 246 S.E.2d at 757.

        In conclusion, this case does not involve a solar panel farm providing power to

multiple customers off-site. It involves solar panel equipment located on the property

of a single customer designed to produce power for that customer where no adjacent

property owners or other members of the public have the right to tap into the system.

Based on the General Assembly’s current definition of “public utility,” I conclude that

NC WARN’s system is not a public utility and is thus not subject to regulation by our

        5 The majority notes, in a footnote, that the fact that the excess energy created by the Church’s
system will be transferred to Duke Energy’s power grid “leads us to conclude that NC WARN is in fact
‘hold[ing itself] out as willing to serve all who apply up to the capacity of [its] facilities.” I am wholly
unpersuaded by this characterization, and do not believe there is sufficient information in the record
from which we could undertake an informed interpretation of Duke Energy’s voluntary net metering
credit program.

                                                     8
                            N.C. UTILS. COMM’N V. NC WARN

                                    DILLON, J., dissenting

Utilities Commission.       The General Assembly is certainly free to broaden the

definition of “public utility” (within constitutional limits). However, based on the

General Assembly’s current definition and our Supreme Court’s jurisprudence, I vote

to reverse the Commission’s decision regarding this private contract between NC

WARN and the Church. See New Hope, 248 N.C. at 30, 102 S.E.2d at 380 (“[A]n

attempt to declare [NC WARN] to be a public utility where it is inherently not such,

is . . . void wherever it interferes with private rights of . . . contract.”).

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