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Hawaii Revolutionizes Consumer-Utility Relationship With New Law

By Frank Andorka, Senior Correspondent

What Happened: Hawaii has rebalanced the relationship between utilities and their customers with a new law tying rate increases to performance data.

According to Hawaii Public Radio, “The Hawaii Ratepayer Protection Act will require the Public Utilities Commission, the PUC, to develop incentives for local electric companies to modernize and manage costs.’

The law takes effect July 1st. The PUC will then be required to create an incentive framework by January 1, 2020.

SolarWakeup’s View: To call Hawaii’s solar situation “complicated” would be like calling World War II a “kefuffle.” Ever since October 2015, when the PUC eliminated net metering precipitously (in the minds of many), the solar industry has struggled to re-find its identity. Hell, things in Hawaii were so bad that last year, the president of the Hawaii Solar Energy Association told an audience at Intersolar North America:

”I think people working in solar in Hawaii have reached the fifth stage of grief – acceptance – as many of us are looking at the impending death, for all intents and purposes, of the solar industry in the state,” he added.

He also added that a painful (he called it “nasty, brutish and long”) transition from net-metering to three stopgap programs that have slowed residential installations to a crawl.

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A law signed by Governor Daniel Ige, however, called the Hawaii Ratepayer Protection Act, could restart the business – at least that’s the hope of residential companies already heavily invested in the solar industry like Sunrun (emphasis added).

“Other state Legislatures and Commissions should take notice of Hawaii’s efforts,” said Anne Hoskins, chief policy officer of Sunrun. “The time to make these changes is now, before billions of dollars are spent in rebuilding our outdated electrical networks. Rooftop solar and home batteries are allowing users to choose a system that maximizes public benefits, not utility shareholder profits. Let’s keep giving people the freedom to create a brighter future.”

Any legislation that can help alleviate the mindless fighting between utilities and solar users is music to my ears. Let’s hope this new law can help the Aloha State return to its place as a leading residential solar state (and may this law, if it works, become a model for the rest of the country).

More:

Electricity Ratepayer Protection Act Signed Into Law (audio included) (HPR)

Does Chapter 11 Shelter Schletter From Employee Wrath?

By Frank Andorka, Senior Correspondent

What Happened: Schletter’s bankruptcy just got more interesting to me, based on some public information a friend of mine shared with me.

Did you know that Schletter had been sued by its employees in the Western District of North Carolina – the same one in which they have field bankruptcy – after one of their employees fell prey to a W-2 phishing scam that caused the sharing of all the employees’ private information with some identity thieves?

Did you also know that in late March (full document below) the judge dismissed Schletter’s attempts to dismiss the resulting employees’ lawsuit and allowed it to go forward, with the looming prospect of treble damages hanging in the balance?

And then there’s that pesky WARN Act thing…..

SolarWakeup’s View: My theory yesterday was that Schletter’s decision to declare Chapter 11 bankruptcy was that it was largely attributable to the tariffs on solar modules, aluminium and steel. Turns out that may not be the whole story (or even the primary one). Check out the March 26 ruling by a judge in North Carolina concerning Schletter’s legal liability in a W-2 phishing scam of which they became a victim.

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The good folks at Lexology have the details:

In that decision, called Curry v. Schletter Inc., Judge Martin Reidinger of the United States District Court for the Western District of North Carolina handed the employees a big win: a favorable ruling on a treble damages claim brought under N.C. Gen. Stat. § 75-1.1.

In 2016 a Schletter employee was reeled in by a phishing scam. The employee emailed criminals W-2 tax form information for all of the company’s then-current employees. That information included names, addresses, social security numbers, and wage information—all in an unencrypted file.

After discovering the incident, Schletter notified the affected employees and offered 24 months of credit monitoring and identity theft protection services. Unsatisfied with that response, the employees sued.

Unsurprisingly – and I saw that without even the hint of snark – Schletter moved to have the lawsuit dismissed. Again, I’ll let the lawyers at Lexology explain it far better than I could:

First, Schletter said, it hadn’t “intentionally” communicated anything to the criminals. Instead, it argued, the employee who fell victim to the scam meant to transmit the information internally and for a legitimate purpose, and thus lacked the requisite intent.

Second, Schletter argued that it had not disclosed the employees’ information to the “general public,” but only to the cyber-criminal.

Third, Schletter pointed to the rule that section 75-1.1 does not generally apply to employer-employee disputes. According to Schletter the claim for treble damages—which arose only because of their employment relationship with Schletter—was barred by this so-called “employment exemption” to section 75-1.1.

What that decision did was open Schletter to treble damages six days after its German parent company had filed for insolvency (Germany’s version of Chapter 11 bankruptcy). There would be no help coming from the parent to bail them out if the lawsuit went forward and a jury found in favor of the employees.

In those circumstances, combined with the pressures from the tariffs, Schletter may have decided to file Chapter 11 in an attempt to get out from under the lawsuit. But according to court records, there’s no indication the lawsuit over the phishing scam is going away.

Moreover, Schletter may have opened itself up to another lawsuit when it failed to produce a WARN Act notification before suspending operations. A spokesman for the company says there are 120 employees in Shelby, North Carolina, which would make any attempt to close the headquarters without giving their employees 60 days notice of the closing.

The spokesman did indicate there have been no layoffs yet – which I suppose could allow them to skirt the law for now – but if layoffs DO occur, the company has put itself in more legal jeopardy by not giving their employees the heads up.

Stay tuned – this situation promises only to get more interesting as the process moves along. All I know is that my heart goes out to the 120 employees that will inevitably be affected by whatever the outcome in this tale is. They don’t deserve to have their futures held hostage like this, no matter what the reason.

Here is the March 26 ruling against Schletter’s motion to dismiss its employees’ lawsuit:

Curry-Opinion

More:

A North Carolina Federal Court Allows a Treble Damages Claim in Employee Data-Breach Lawsuit (Lexology)

Schletter U.S. Files For Chapter 11

Source: As Parent Company Struggles, Schletter Eyes Closing U.S. Operations

We’re Happy For SolarWorld Employees – But That’s It

Suniva Being Sold For Parts (Literally), Just Like We Said

Michigan Utility Under Fire For Alleged PURPA Violations

By Frank Andorka, Senior Correspondent

What Happened:DTE Energy is in the news again, and it is yet again not for a good reason. Greenwood Solar has filed a complaint against the utility alleging that it is not negotiating to buy their electricity in good faith as is required under the Public Utility Regulatory Policies Act of 1978.

Under PURPA, utilities are legally required to buy power from independent power producers (IPP) if it is below their cost of generation from other sources, also known as “avoided costs”.

Congress passed PURPA at the height of the 1978-1979 oil crisis, when Western nations like the United States tried to wean themselves off fossil fuels to counter a move by the Organization of the Petroleum Exporting Countries (OPEC) to raise oil prices significantly.

The Michigan utility has until May 29 to respond to last week’s complaint. The first prehearing will be held on June 5.

Is the image of the sun setting on a utility pole too heavy handed? I worry it’s a little heavy handed.

SolarWakeup’s View: As I was doing research for my story on DTE’s $1 billion natural-gas plant boondoggle, I happened across an interesting note on the Michigan Public Service Commission’s website: The Michigan utility has had a complaint filed against it by a solar company saying DTE is not negotiating in good faith under the Public Utility Regulatory Policies Act of 1978, or PURPA.

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Under PURPA, utilities are legally required to buy power from independent power producers (IPP) if it is below their cost of generation from other sources, also known as “avoided costs”. Congress passed PURPA at the height of the 1978-1979 oil crisis, when Western nations like the United States tried to wean themselves off fossil fuels to counter a move by the Organization of the Petroleum Exporting Countries (OPEC) to raise oil prices significantly.

In its complaint, Greenwood Solar alleges that:

DTE’s refusal to enter substantive negotiations of an agreement for purchase of capacity and energy violates Greenwood Solar’s rights under PURPA.

DTE can’t unilaterally refuse to purchase capacity offered by Greenwood Solar.

DTE’s failure to engage in substantive negotiations of an agreement for purchase of capacity and energy violates Greenwood Solar’s rights Under DTE’s Rider No. 6.

“DTE is aggressively blocking solar development at every scale in order to justify its proposal to build a giant gas plant in St. Clair County,” Becky Stanfield, senior director of Western States for solar advocacy group Vote Solar, told SolarWakeup. “We don’t think what they’re doing is consistent with the law, and we’re very much hoping the Commission doesn’t let the company get away with it.”

The Michigan utility has until May 29 to respond to Greenwood’s complaint, and the first hearing on the matter will take place June 5.

Read the whole complaint here:

U-20156 Complaint of Greenwood Solar Against DTE

More:

Decision On Fate Of $1 Billion DTE Natural Gas Plant Looms

Coalition Delivers 10,000 Michigander Letters Calling on DTE to Drop Its Gas Plan and Choose Clean Energy (Vote Solar)

Power Up Michigan

Michigan Public Service Commission

Schletter U.S. Files For Chapter 11

By Frank Andorka, Senior Correspondent

What Happened: Schletter’s U.S. subsidiary filed for Chapter 11 bankruptcy protection in the Western District of North Carolina, where the company’s headquarters are located.

By written consent of the company’s board of directors, Schletter is seeking protection from between 299 and 1,000 creditors.

The filing, signed by Schletter U.S. President and CEO Russell Schmit, confirms what SolarWakeup first reported on Monday, which was that the company was on the verge of closing.

SolarWakeup’s View: We hate to say we told you so, but … oh, who are we kidding? We LOVE telling you we told you so. As SolarWakeup first reported rumors of on Monday, Schletter U.S. has now officially filed for Chapter 11 bankruptcy protection in the Western District of North Carolina.

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The filing was signed by Schletter U.S. President and CEO Russell Schmit, is asking for protection from between 299 and 1,000 creditors, presumably including the one in the Google review referenced above that we brought you originally on Monday.

The company’s three largest creditors are, in order:

Coilplus North Carolina, a flat-rolled steel processor, owed more than $3 million;

MI Metals, a Scottsdale, Arizona, based aluminum extruder, owed nearly $1.2 million; and

American Express, owed $838,837.

The bankruptcy of an industry stalwart like Schletter is certainly tragic, as is the potential loss of jobs. LinkedIn lists 120 employees for the racking company, though it’s not clear how many were located in the Shelby, N.C. headquarters. It should be noted that with no WARN Act notices have been filed by the company.

The Worker Adjustment and Retraining Notification Act of 1988 (the “WARN Act”) is a U.S. labor law which protects employees, their families, and communities by requiring most employers with 100 or more employees to provide 60 calendar-day advance notification of plant closings and mass layoffs of employees, as defined in the Act.

Based on other WARN filings from other companies in North Carolina, it appears Schletter should have filed a WARN notice.

Schletter’s Germany parent company filed for bankruptcy in March.

As I wrote on Monday:

Schletter US may well be another casualty in the needless and mindless trade war the Trump Administration had declared on the world, starting with his announcement of tariffs on solar modules in January and followed by tariffs on steel and aluminum, all of which would have had deleterious effects on Schletter’s main business.

The racking-and-mounting segment of the U.S. solar industry, of which Schletter USA was a part, spoke out as a group forcefully and often against the trade complaint brought by bankrupt solar module manufacturer Suniva and later joined by SolarWorld in an attempt to jack up their valuation in preparation for sale.

Last week, SunPower announced it had purchased SolarWorld’s assets, and Suniva’s main creditor SQN Capital Management announced it was selling off all the company’s manufacturing equipment. So neither of the two combatants of the idiotic tariff battle are likely to exist in six months.

But the effects of their ridiculous battle will be felt long into the future and, by all accounts, have claimed the employees of racking giant Schletter.

UPDATE (12:15 PM, 4/25/2018):

Schletter spokesman Sebastian Glaser responded to SolarWakeup inquiries about the current employees statuses and what’s next for the U.S. subsidiary:

SolarWakeup: Could you tell us what is the current situation with the employees, how many have been affected and what they should expect next?

Glaser: There are currently around 120 employees at Schletter, and so far there have been no redundancies. Please understand that I cannot give you any more details at this stage. We are still in the process of reviewing our operations during the proceedings which also includes HR planning. When we have a clearer picture in terms of HR, we will of course inform our employees first.

SolarWakeup: With the sales process of the global Schletter business, do you expect to entertain acquisition offers of the business unit separately from the German parent company?

Glaser: Our goal is to find an investor solution for the group and the investor process is making good progress. A few weeks after the start, several potential investors have handed in indicative bids already. Among the bidders, there are companies from the industry as well as financial investors. This pleasingly high investor interest clearly shows the strength of the Schletter brand.

SolarWakeup will continue to monitor this situation and update the story as necessary.

Here is Schletter’s full filing:

SchletterBankrutpcyFiling

More:

We’re Happy For SolarWorld Employees – But That’s It

Suniva Being Sold For Parts (Literally), Just Like We Said