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Florida Supreme Court tosses Duke Energy solar case back to regulators

The League of United Latin American Citizens of Florida argued the program improperly shifts costs to customers who do not participate.
Duke Energy installed solar-powered batteries at  John Hopkins Middle School in St. Petersburg. Here, Mike Lyman, with FC Solar, works to install the downspout on the gutter of the solar panels on Sept. 24, 2021.
Duke Energy installed solar-powered batteries at John Hopkins Middle School in St. Petersburg. Here, Mike Lyman, with FC Solar, works to install the downspout on the gutter of the solar panels on Sept. 24, 2021. [ DIRK SHADD | Times ]
Published May 27

TALLAHASSEE — In an unusual move, the state Supreme Court on Friday said utility regulators need to revise a decision that approved a controversial Duke Energy Florida solar energy program, saying the regulators’ decision “leaves the court guessing as to the reasoning.”

The Supreme Court’s order came in a challenge to the Florida Public Service Commission’s decision to approve the Duke program. The League of United Latin American Citizens of Florida has argued, at least in part, that the program would improperly shift costs and financial risks to the vast majority of Duke customers who do not participate,

The group known as LULAC appealed to the Supreme Court last year, and the court held arguments Feb. 9. But in a 6-1 order Friday, justices said the Public Service Commission’s decision on Duke’s “Clean Energy Connection” program did not adequately address the league’s arguments.

“LULAC argues that the program … unfairly requires Duke’s non-participating customers to subsidize the participating customers,” said the order by Justices Ricky Polston, Jorge Labarga, Alan Lawson, Carlos Muniz, John Couriel and Jamie Grosshans. “According to LULAC, this violates the statutory requirement that Duke’s rates be ‘fair and reasonable’ and that they not give ‘any undue or unreasonable preference or advantage’ to any person. Although LULAC preserved this issue by raising it at the hearing below (at the Public Service Commission) and in a post-hearing brief, the final order approving the program does not discuss it.”

Justices also said that “at least as to the major issues in dispute, commission orders must explain the agency’s findings and conclusions enough to permit meaningful judicial review.”

“The order under review is inadequate to an extent that prevents us from deciding the central issue that we have identified,” the justices wrote. “To be clear, we express no position now on the merits of LULAC’s challenge. But we believe it is necessary to remand this case and afford the commission an opportunity to enter a revised final order that adequately explains the agency’s findings and reasoning.”

While utilities have rushed to build solar power plants in recent years, the Duke program has a different financial structure that involves some customers volunteering to initially pay more on their electric bills to help finance the projects — and then receiving bill credits in the future.

The program involves building 10 74.9-megawatt solar plants. The Public Service Commission gave approval after Duke, Walmart and the groups Vote Solar and the Southern Alliance for Clean Energy negotiated what is known as a “stipulation” about the details.

In a news release last month inviting customers to seek to take part in the program, Duke touted it as supporting the development of solar energy.

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“Our customers want affordable, clean energy options, and we believe larger-scale solar is the most cost-effective way to advance the benefits of solar on our entire system,” Melissa Seixas, Duke Energy Florida state president, said in a prepared statement. “We are proud to offer this innovative program that will give customers, especially those who may not have the ability to install solar at home, an opportunity to support renewable energy while seeing real benefits.”

Related: Tampa Electric, Duke Energy seek approval for storm project money

But the dispute largely has focused on the program’s financial structure, with opponents contending that it would disproportionately benefit Walmart and other large customers that would help pay upfront costs and then receive future credits.

“The approved program will provide a financial windfall to a few select Duke customers at the expense of all of Duke’s other customers, including LULAC’s members,” attorneys with the Earthjustice law group, which is representing the league, wrote in a brief at the Supreme Court.

The Supreme Court order on Friday said the commission’s decision “does not acknowledge any dispute over the program’s funding structure.”

“It does not say whether the commission accepts LULAC’s characterization of the program’s bill credit feature as a ‘subsidy,’ and if so, why the commission nonetheless considers the program to have established rates that are fair, reasonable, and not unduly preferential,” the justices wrote. “Indeed, the order leaves the court guessing as to the reasoning underlying the commission’s conclusions on this issue.”

Chief Justice Charles Canady dissented but did not detail his reasons.

By Jim Saunders, News Service of Florida

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