## Facts

- SZ Enterprises, LLC (Eagle Point Solar) proposed installing and owning solar photovoltaic systems on City of Dubuque buildings and selling all generated electricity to the City under a long-term per-kWh power-purchase agreement (PPA).
- The City would remain interconnected to, and continue taking service from, the incumbent utility in its exclusive service territory; the solar generation would offset part of the City’s load rather than replace retail utility service.
- Eagle Point would retain ownership during the contract term, with the City having an option to acquire the system at the end; the arrangement functioned as a financing method to avoid the City’s upfront capital costs.
- Because the City is within Interstate Power and Light’s exclusive service territory, Eagle Point sought a declaratory ruling from the Iowa Utilities Board (IUB) that it would not be a “public utility” under Iowa Code § 476.1 (2011) or an “electric utility” under Iowa Code § 476.22.
- The IUB ruled Eagle Point’s proposed PPA made it a public utility and therefore impermissible within the exclusive territory.
- On judicial review, the district court reversed, concluding Eagle Point was not a public utility or electric utility under the statutes.
- The IUB and intervenor utilities appealed; Eagle Point cross-appealed on aspects of the district court’s reasoning.

## Issues

1. Whether a third-party solar PPA provider selling electricity to a single municipal customer is a “public utility” under Iowa Code § 476.1.
2. Whether the provider is an “electric utility” under Iowa Code § 476.22 such that the PPA is barred by Iowa’s exclusive service-territory framework.

## Decision

- The Iowa Supreme Court affirmed the district court and reversed the IUB’s declaratory ruling.
- Eagle Point was neither a “public utility” under § 476.1 nor an “electric utility” under § 476.22.
- Because Eagle Point was not a regulated utility under these provisions, the proposed PPA did not violate the exclusive service-territory regime.

## Legal Principles

- Public-utility status under Iowa law does not arise from any sale of electricity; it turns on whether the enterprise is “clothed with the public interest.”
- The statutory concept of providing service “to the public” focuses on dedication to public use and offering service indiscriminately, not on a negotiated, single-customer arrangement.
- A multi-factor analysis of the enterprise’s operations may be used to assess whether it resembles a traditional public utility (e.g., holding out to serve the public, monopoly features, essential public-service obligations).
- A customer-sited, behind-the-meter solar project sold under a bespoke PPA to one identified customer, without seeking monopoly rights or serving the general public, falls outside public-utility regulation and related exclusive-territory limits aimed at traditional utilities.

## Conclusion

The court held that a third-party provider that installs and owns customer-sited solar generation and sells its output only to a single customer under a customized PPA is not a “public utility” or “electric utility” under Iowa Code §§ 476.1 and 476.22, so the arrangement is not barred by Iowa’s exclusive electric service-territory rules.


SZ Enters., LLC v. Iowa Utils. Bd., 850 N.W.2d 441 (Iowa 2014)