Dubuque solar energy company faces another battle - KWWL - Eastern Iowa Breaking News, Weather, Closings

Dubuque solar energy company faces another battle

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DUBUQUE (KWWL) -

A solar energy company in Dubuque faces either setting a regional precedent or a major road block.

In an ongoing legal battle with the Iowa Utilities Board, Eagle Point Solar in Dubuque could pave the way for solar power companies in Iowa.

However, the Iowa Utilities Board argues Eagle Point Solar is violating Alliant Energy's protected service territory. Originally meant to prevent competing public utilities from cluttering every city with a mess of wires and utility poles, the protected service territories now face the question of where - and whether - solar energy fits in.

When Eagle Point Solar entered into a third-party power purchase agreement contract with Dubuque in 2011 to sell the city solar power, the Iowa Utilities Board said the solar company was stepping on toes. The IUB ruled in 2012 Eagle Point Solar was a public utility and an electric utility and therefore violated Alliant Energy's protected service territory.

Just last month, however, a Polk County judge overturned that IUB ruling, saying Eagle Point Solar is neither a public nor an electric utility and may therefore sell energy to the city through a third-party power purchase agreement.

The IUB, along with Alliant Energy and other public utilities in Iowa, filed an appeal last week. The Iowa Supreme Court will hear the appeal in coming months.

Alliant Energy contends tax-exempt entities such as churches, cities and schools should not be able to reap the tax benefits of going through a third-party power purchase agreement for solar energy.

Justin Foss is spokesperson for Alliant Energy.

"A city or a church, they do not pay taxes, so, therefore, the cost of the system is the sticker price because they can't qualify for the tax benefits, but when a third party comes in there, they are then able to qualify for tax benefits and make the cost of the system easier for them to afford," Foss said. "Do all taxpayers want to pay for non-taxpaying entities to get these benefits?"

Even on an overcast, rainy day, the solar panels on top of Dubuque's Municipal Services Center provide the building with energy.

"We're real happy with the way the system is working now," Dubuque's street and sewer maintenance supervisor John Klostermann said. "It does provide us some benefit now as far as we're reducing our CO2 footprint. That's probably the biggest benefit right now. It's break-even on the cash side."

The city has a lease-to-purchase agreement for the solar panels with Eagle Point Solar and says the panels are providing the building with approximately one third of its annual electricity use. Originally, however, the city was purchasing the energy produced by the panels directly from Eagle Point Solar through a third-party power purchase agreement.

Whether the city goes back to the original contract or sticks with the current one, Klostermann said, depends on the Supreme Court's ruling.

Eagle Point Solar president and CEO Barry Shear said what his company is doing is completely legal and the public utilities are simply concerned he is taking away business from them.

"Alliant supports renewable energy," Foss said, adding Alliant just wants to make sure it's done in the correct way.

Shear says, that's exactly how he is doing it.

If the Court rules in favor of Eagle Point Solar, it would open the door for other solar companies to sell energy to tax-exempt entities through third-party power purchase agreements.

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