A SOLAR ROOFTOP COMPANY that entered into a long-term power contract to supply electricity to a city building in Dubuque, Iowa is not violating the monopoly the local utility holds to make retail electricity sales in the area, the Iowa Supreme Court said in July.

The decision is important because it suggests a path for solar rooftop companies to sell electricity — rather than lease customers the systems — in states with retail sale restrictions.

Eagle Point Solar owns a solar system installed on a city building in Dubuque. The city buys the entire output from the system at a per-kilowatt-hour charge. It also shares in a third of any revenues that Eagle Point Solar receives from selling renewable energy credits tied to the electricity.

Interstate Power & Light Company, a regulated utility, has a monopoly to supply electricity to retail customers in the area. It called the arrangement an unlawful incursion into its exclusive service territory. Eagle Point asked the Iowa Utilities Board for a declaratory order that the arrangement does not violate state law.

The board sided with the utility. However, an Iowa district court overturned the decision and, on review, the state Supreme Court agreed with the district court.

The court said the arrangement would have infringed on the local utility’s monopoly if Eagle Point Solar was either a “public utility” or an “electric company” as defined under Iowa law. It said Eagle Point is not a “public utility” because it is not furnishing electricity “to the public,” at least not in a manner that requires the state to force it to submit tariffs for review and to provide service to all who desire it.

It said Florida had found independent generators are public utilities, but other states — Arizona, Nevada, New Mexico and Oregon — have declined to do so.

The case is SZ Enterprises, LLC d/b/a/ Eagle Point Solar v. Iowa Utilities Board. (For earlier coverage, see the June 2013 NewsWire article.)