A federal judge on Friday threw out a Western Pennsylvania solar company’s lawsuit that claimed an electric utility’s refusal to accept excess generation from a proposed solar farm violated Pennsylvania’s alternative energy law.
David Hommrich, president of Green Tree solar development company Sunrise Energy LLC, argued that Allentown-based PPL Electric Utilities Corp. exercised unfair competition and violated U.S. Constitutional protection of equal rights when it denied an application to hook up a solar farm into its 29-county service territory in eastern Pennsylvania.
At the heart of the lawsuit is the state’s evolving net metering policy, created in 2004 under the Alternative Energy Portfolio Standards Act and designed to encourage customers to buy their own renewable generators, typically rooftop solar panels. Net metering is the idea that electric utilities should pay its customers who generate excess electricity at the same price per kilowatt hour as it charges its customers.
But rules governing the policy — including what kind of generators qualify for payment — have been far from clear.
Mr. Hommrich’s lawsuit has come and gone as the state Public Utility Commission mulls changes to the current metering rules, which took effect in 2008. In February 2014, the commission drew a distinction between so-called merchant generators from customer generators when it issued recommendations that would cap how much excess generation a utility could be required to buy.
By proposing renewable energy systems be sized at no more the 110 percent of a customer’s annual electric consumption, the commission effectively disqualified generators that don’t serve an existing customer.
So when Mr. Hommrich put in an application one month after those proposed changes for a site in Beavertown, PPL balked. It argued a solar farm “did not meet the intent” of the alternative energy law because it does not offset an existing demand. It denied the application.
When Mr. Hommrich put in two more applications for other sites, the utility did not deny them but rather asked the PUC to determine whether Sunrise would qualify under net metering rules. In letters to Mr. Hommrich, the utility explained it faced “substantial uncertainty regarding the requirements to qualify as a ‘customer-generator,’” according to documents filed with the lawsuit.
As the utility sought guidance from the PUC, Mr. Hommrich filed the suit in May with the hopes to set a precedent for the PUC’s proposal. He noted in the suit that he owns a solar farm in Washington County that puts 950 kilowatts annually into West Penn Power’s distribution system. The farm proposed in PPL’s territory would produce about 2 megawatts.
But U.S. District Court Judge David Cercone didn’t bite. In his ruling, Mr. Cercone wrote that the solar company’s arguments came up short and that PPL’s actions were not those of the state, as would be required to prove a Constitutional rights violation.
“We think this is the appropriate decision, particularly because Pennsylvania’s net metering rule are under review by the Public Utilities Commission,” PPL said in a statement. Mr. Hommrich could not be reached for comment on Monday.
Daniel Moore: email@example.com, 412-263-2743 and Twitter @PGdanielmoore.