UTILITIES

Mo. Supreme Court to hear arguments in solar dispute

Missouri's highest court is set to hear next week a last-ditch appeal to help jump-start the rooftop solar business in the state's southwest corner.

Oral arguments will be heard Sept. 18 in a case brought by Renew Missouri against the Missouri Public Service Commission over a utility's position that it is exempt from solar energy provisions in the state's renewable energy standard.

Renew Missouri argued in a court brief that the utility, Empire District Electric Co., should not be exempt from a solar "carve-out" in the renewable law that mandates investor-owned utilities to get 2 percent of their required renewable generation from the sun. The law also ordered utilities to offer customers a $2-a-watt rebate for solar photovoltaic installations less than 25 kilowatts.

Joplin, Mo.-based Empire, however, says a bill passed in the 2008, just months before Missouri voters approved the state's 15 percent renewable standard, specifically exempts it from having to meet the solar requirement.

The case is the latest in a long line of skirmishes in Missouri and elsewhere across the country between renewable energy advocates and utilities over efforts to push rooftop solar further into the mainstream.

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In recent months, an Iowa Supreme Court ruling this summer affirmed the rights of solar developers to enter into third-party financing agreements with their customers (EnergyWire, July 14). In Wisconsin, utilities want to alter rate structures and raise fixed customer charges, a move that the solar industry sees as a disincentive for consumers to self-generate or save electricity (EnergyWire, July 24).

The dispute over Empire, which provides electric service to 207,000 customers in southwest Missouri, began in the spring of 2008 when advocates submitted tens of thousands of signatures to put the renewable energy initiative on the fall ballot.

Empire publicly stated at the time that it neither supported nor opposed the initiative. But privately, the utility persuaded two conservative legislators to draft an amendment that exempted utilities from the solar requirements if they already satisfied the 15 percent standard.

The amendment was part of a broader bill approving a sales tax exemption for energy efficient appliances. The bill, which passed, applied to just one of Missouri's utilities: Empire.

"We're not going to be shoved into solar if it doesn't make sense," Brad Beecher, then an Empire vice president, was quoted as saying in the Joplin Globe. Beecher is now the company's chief executive.

The renewable energy ballot initiative, which requires investor-owned utilities to generate 15 percent of electricity with renewable sources of energy by 2021, passed with two-thirds voter approval in the fall. The law took effect the following year.

A Springfield, Mo., solar company was first to challenge the solar exemption, filing a lawsuit against the utility in circuit court. The court dismissed the lawsuit, and a Missouri appeals court affirmed the decision. Both courts said the dispute should first be heard by the PSC.

The solar industry and other clean energy advocates, including Renew Missouri, subsequently filed a complaint with the commission in January 2013. But the commission dismissed the complaint against Empire in November.

In its order, the PSC said that for a utility that already gets 15 percent of its generation from renewables, the solar requirements "would impose an extra compliance burden on a utility that had already, in the General Assembly's determination, gone the extra mile to offer renewable energy to its customers."

Renew Missouri appealed to the Missouri Supreme Court in January, arguing that the amendment written at Empire's request is invalid because it was an intentional end run to help one utility -- Empire -- escape the requirement to provide solar rebates to its customers.

The group argues the solar exemption was also effectively repealed by the subsequent ballot initiative.

In briefs filed with the Missouri Supreme Court, attorneys for Empire and the PSC argue the commission correctly determined the two state laws -- one approved by the Legislature and the other by Missouri voters -- are not "irreconcilable."

Empire spokeswoman Amy Bass declined a request for an interview, saying it's company policy not to comment on pending litigation.

P.J. Wilson, executive director of Renew Missouri, said that unlike other areas of the state served by the state's other two investor-owned utilities, solar activity in Empire's 15-county service area has been almost nonexistent.

"It's almost zero," he said.

An array of challenges

The Empire case is among several ongoing challenges to the Missouri's solar rebate program, which has all but dried up following an agreement among utilities and the solar industry to cap the amount of money available.

In May, a group of consumers filed separate complaints with the PSC concerning availability of solar rebates offered by other utilities (EnergyWire, May 16).

Another lawsuit filed in June by solar installers and an environmental group seeks to preserve solar rebates.

Meanwhile, solar development in Missouri has significantly slowed since June 30 -- the deadline for installers to complete projects that qualified for $2-a-watt rebates last year. Under a legislative compromise between utilities and the solar industry, the rebate was reduced to $1.50 a watt on Jan. 1 and will step down to $1 a watt next year.

Some Missouri solar companies have responded to declining incentives by doing work in adjacent states or expanding into energy efficiency or other business lines.

Solar advocates believe there remains untapped demand for development in the Show Me State if the economics work. But without some form of incentive, it's questionable if they do, even with a sharp decline in solar equipment prices.

Wilson said, "It certainly would be better if we had rebate money flowing right now."

Twitter: @jefftomich | Email: jtomich@eenews.net

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