Lawsuit attempts to parse who can sell electricity to utilities



David Hommrich is suing PPL Corp. But he might as well be taking on the state of Pennsylvania.

Last year, Mr. Hommrich, president of Green Tree solar development company Sunrise Energy LLC, decided to expand his business into the eastern part of the state.

He asked PPL, the electric utility that covers 29 counties in the eastern and central parts of Pennsylvania, if he’d be able to hook up his proposed solar farm into PPL’s distribution grid. He wanted to net meter the generation, which would mean the utility would pay him the same price per kilowatt hour for the electricity he generates as it charges its customers.

PPL said no.

Sunrise submitted two more applications for different sites. This time, the utility company didn’t give an answer but, instead, said it needed the Public Utility Commission to decide whether net metering was appropriate for generators that aren’t offsetting an existing load.

To put it simply: Solar panels on a house roof that generate some or all of the electricity necessary to power that house are undisputed candidates for net metering. But a solar array in the middle of a field with no independent demand for electricity at the site is a question mark right now, especially since the PUC introduced proposed rules in February that would disqualify such generators from net metering.

Mr. Hommrich has based his entire business on net metering, a right granted by Pennsylvania Alternative Energy Portfolio Standards Act of 2004 to encourage renewable energy and distributed generation.

Sunrise built its first and only solar farm in Slovan, Washington County, in 2010. Over the years, Mr. Hommrich added more solar panels there, increasing total capacity to just under a megawatt — enough to power about 110 Pennsylvania homes, according to the trade industry group Solar Energy Industries Association.

The Slovan solar farm is net metered through West Penn Power’s distribution grid. After a few “speed bumps” in the beginning, Mr. Hommrich said he has a good working relationship with the utility and doesn’t understand why something that’s permitted by state law should be approached so differently by PPL and West Penn Power.

“The only reason we got into this business is because of protections” included in that law, he said. “Prior to that, utilities could kill projects at the cradle.”

PPL declined to comment.

In PPL’s request for guidance filed with the Public Utility Commission earlier this month, the company said it has received four similar application for net metering — three came from Sunrise Energy, each with a capacity of 1.95 megawatts, and the fourth from Lewistown-based Mid Atlantic Green Builder for a 3 megawatt system. PPL said it expected other requests would follow.

Rules that the PUC proposed in February have paralyzed the issue, the utility said, and thrown any decisions it would make about allowing such facilities to net meter on tentative ground.

That’s why Mr. Hommrich’s lawsuit in federal court, while aimed at PPL, is attempting to set a precedent for testing the legality of the PUC’s proposal.

“Given the commission’s proclivity for testing the boundaries of legislative intent, it is likely that their proposed rulemaking will need to be resolved in court,” Mr. Hommrich wrote in response to PUC’s proposed rules after they were published.

“Organizations like the PUC, they don’t get to write laws,” he said last week. “If [the courts] rule, maybe it won’t happen again.”

PUC spokeswoman Jennifer Kocher said, after the agency released its draft, that it wasn’t proposing a new interpretation of the 2004 law but rather clarifying what has already been the practice — to treat energy providers with no pre-existing electricity demand as merchants generators, not customer generators.

At last count in May 2013, there were about 7,600 customer-generator facilities net metered in Pennsylvania, totaling 186 megawatts in capacity. That’s a sliver — less than half a percent — of total electricity generation in the state.

It’s not known what portion of them would be impacted if the definition were permanently shifted to exclude installations like Sunrise’s solar farms.

For Mr. Hommrich, the Public Utility Commission and PPL, a utility regulated by the agency, are two sides of the same coin.

“The commission’s proposal reads like a page from the electric utility industry’s playbook,” Mr. Hommrich wrote to the agency, promising he would submit several white papers addressing the proposal’s specific faults.

“Who else but the electric utility companies would want to change the rules? The question is on everyone’s mind. Who is asking for these changes?” Mr. Hommrich wrote.

The PUC’s proposal won’t become an official proceeding until it is published in the Pennsylvania Bulletin. That has not happened yet.

Mr. Hommrich’s lawsuit against PPL awaits the company’s response. It has been filed in federal court in the Western Pennsylvania district alleging civil rights violations. It states that Sunrise stands to gain about $8 million in revenue over the next 25 years from any one of the proposed projects, money that would go unrealized in the event the company loses in court or if the PUC’s rules are adopted as proposed.

Anya Litvak: alitvak@post-gazette.com, 412-263-1455.

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