SZ Enterprises, LLC v. Iowa Utilities Board

SZ Enterprises, LLC d/b/a Eagle Point Solar (Eagle Point) (plaintiff) was a small company that installed and financed solar rooftop systems. Eagle Point entered into a power-purchase agreement with the City of Dubuque, Iowa. Eagle Point was to finance and construct a solar-energy system on city property. Dubuque was to remain connected to the electric grid because the solar system was intended only as a supplement to the city’s existing electricity service. The city would compensate Eagle Point for the electricity for the duration of the agreement and then acquire ownership rights in the solar system at the agreement’s termination. Eagle Point filed a request with the Iowa Utilities Board (the board) (defendant) for a declaratory ruling that Eagle Point would not be considered a public utility under Iowa Code § 476.1 (2011). If Eagle Point was considered a public utility by the board, it would be prohibited from providing electricity to Dubuque because the city was in the exclusive service territory of Interstate Power and Light Company. The board found that Eagle Point would be a public utility under the terms of the power-purchase agreement. Eagle Point appealed to the district court, which reversed the board’s decision. The district court found that the board’s application of public utility was too rigid and that the legislature intended some smaller electricity-service providers to be excepted from regulation as a public utility. The board appealed.