Dive Brief:

• A Pennsylvania appeals court has ruled that the state’s Public Utility Commission does not have jurisdiction over the interpretation of the state’s Alternative Energy Portfolio Standards Act, which governs solar net metering, and has remanded the matter back to the lower court.

• The case involved a dispute in which Sunrise Energy claims it is eligible for net metering rates from West Penn Power, a subsidiary of FirstEnergy, for a 950-kW solar power project it developed.

• The case revolves around whether Sunrise Energy is a "customer-generator" under the Alternative Energy Portfolio Standards Act. A lower court had ruled the PUC could not place limits on the definition of the term under the act, a decision the appellate judges upheld 5-2. 

Dive Insight:

After two years of debate, the Pennsylvania PUC in February finalized net metering rules, allowing utility customers with distributed generation to produce up to 200% of their annual electricity consumption and receive retail rates for electricity they send back to the grid.

Sunrise Energy and West Penn entered into a power purchase agreement in October 2010 under which Sunrise qualified as a “customer-generator” as the owner of a distributed generation system of less than 3,000 kW.

West Penn terminated the PPA with Sunrise in May 2014, arguing that Sunrise is an “electric generation supplier” under the Alternative Energy act as amended by the PUC

In February 2014, the PUC proposed an amendment, not yet finalized, to its Alternative Energy act rules that customer-generators must have load behind the meter independent of their alternative energy system to be considered under the term. 

“To be independent, the electric load must have a purpose other than to support the operation, maintenance or administration of the alternative energy system,” the PUC wrote in the decision.

In May 2016, the state’s Independent Regulatory Review Commission disapproved the PUC’s proposed amended regulation, arguing it exceeded the PUC’s authority under the Alternative Energy Act.

West Penn has been arguing that jurisdiction on the matter rests with the PUC. A trial court disagreed.

The appellate court did not rule on the merits of the arguments about the definition of a customer-generator under the Alternative Energy act, but in its decision wrote: “The trial court did not err by refusing to cede jurisdiction to the PUC. Statutory construction is a responsibility of the judiciary, not the executive branch.”

The appellate court also noted that, “Whether Sunrise Energy is a customer-generator must be resolved by construing the language of the Alternative Energy Act, which expressly defines ‘customer-generator.’”

The court added, “The General Assembly may also, if it deems it appropriate, amend the definition of customer-generator.”