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Distributed Generation Policy / Net Metering: Florida Court of Appeals Determines Whether Organization Has Standing to Challenge | Mitchell, Williams, Selig, Gates & Woodyard, PLLC

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A Florida District Court of Appeals (First District) (“Court of Appeals”) in a September 9 notice dealt with an issue arising from an organization’s challenge to the Distributed Generation Policy (“DGP”) of ‘a public service. See Community Power Network Corporation v. JEA, 2021 WL 4097789.

The question was whether the protest organization had standing to argue that the DGP had not provided a net metering program as required by Florida law.

Net energy metering (i.e. net metering) is generally described as a metering and billing arrangement designed to compensate owners of distributed power generation systems for production that is exported to the distribution network. It generally applies to small distributed generation systems such as renewable technologies [such as solar] and small heat and power cogeneration systems. Such systems can allow homeowners to receive credit for excess electricity generated on site.

A key issue associated with net metering may be the electricity tariff that the utility pays to a net metering customer.

The specific aspects of net metering may vary from state to state.

The Florida legislature in 2008 passed a law requiring municipal electric utilities to:

. . . develop a standardized interconnection agreement and net metering program for customer-owned renewable energy production. § 366.91 (6), Florida Stat. (2018).

The legislation defines “net metering” as:

. . . a metering and billing methodology according to which the renewable energy production owned by the customer is authorized to offset the customer’s electricity consumption on the site.

JEA is described in the notice as a “community-owned, not-for-profit municipal electric utility”.

JEA would have previously used a net metering methodology with a ratio of 1 to 1. If a solar customer were to transmit excess energy to JEA’s electricity grid, it would provide credit for that excess energy at the retail rate. As a result, the solar customer would only pay the net difference between the energy consumed and the energy produced.

JEA is stated to have considered revisions to this policy. He determined that while the customer-generated solar energy reduced its cost of generating electricity by eliminating fuel purchases, it did not take into account the cost of the capacity to operate and maintain the electricity grid. Consequently, the JEA DGP 2018 reduced the rate of the compensatory credit:

. . . from the full rate to the “fuel charge rate”, that is, the rate representing fuel costs.

This has resulted in lower fuel costs for the total kilowatt-hours generated and sent to the grid.

Solar United Neighbors (“SUN”) was preparing to establish a solar cooperative. However, the organization canceled its creation due to the change in policy of the JEA. She argued that there was no longer a financial incentive for JEA customers to install solar equipment.

SUN filed a complaint arguing that the revised DGP violated previously referenced Florida law. She sought an injunction requiring JEA to provide a legal net metering program.

JEA’s arguments in response included a motion to dismiss based on SUN’s lack of standing. The request was granted.

The Court of Appeal considered that the permanent investigation was aimed at “assessing whether a party has sufficient interests in a particular controversy”. Items covered include:

  • Injury
  • causality
  • Repairability

In summary, the Court of Appeal said that standing exists when a plaintiff can identify harm caused by the defendant’s conduct which the court can remedy.

The Court of Appeal considered that SUN had to demonstrate that the revised DGP had caused damage to the organization. He also said that:

. . . in doing so, he had to rely on clear and verifiable facts, not speculation.

The Court of Appeal ruled that SUN had not discharged this charge due to its inability to provide sufficient details about the proposed cooperative. He noted that the cooperative was canceled before the planned launch and that it was not possible to:

. . . identify, with some certainty, a clientele who, had it not been for the 2018 Policy, would have participated in the cooperative.

Therefore, the Court of Appeal upheld the lower court’s finding of lack of standing.

A copy of the notice can be downloaded here.


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