On May 26th two petitions were filed at the Public Service Commission (PSC) seeking rulings to clarify the long-simmering issue of third party-financed renewable energy generation serving individual customers behind their meters.
In one of the petitions (Docket No. 9300-DR-106), Vote Solar, a national nonprofit advocacy organization with 500 members residing in Wisconsin, asks the agency to affirm the legality of a tax-financed solar system installed at the residence of one of its Wisconsin members. In the other petition (Docket No. 9300-DR-105), Custer-based Midwest Renewable Energy Association seeks a similar affirmation, based on relevant case law precedents, enabling customers to host third party-financed electric generation systems on their premises without fear of being designated a public utility. You can read the petitions online at the above-referenced docket numbers on the PSC’s website.
Although the two petitions take different approaches to the legal question at issue, a positive ruling from the PSC on either or both of these filings would achieve the desired result: the ability of individual customers to access electricity generated on their premises from installations owned by third parties. For that reason, RENEW is urging stakeholders—solar contractors, climate and energy justice advocacy organizations, local governments, and legislators–to signal their support for both petitions through statements of support filed at the PSC.
When the PSC receives a Declaratory Ruling petition, it is obligated to open a 20-day initial comment window prior to deciding whether or not to accept that petition. Accepting the petition is a prerequisite for rendering a decision on the legal merits of the case.
RENEW is asking stakeholders to submit statements in both proceedings urging the PSC to accept the petitions and convene a proceeding to affirm third-party financing on its merits, emphasizing the following themes:
- Businesses need clarity on this legal question before they will commit to providing renewable energy to customers with equipment they would own. Though customer demand for solar PV is growing, the ongoing legal ambiguity acts as a powerful disincentive to businesses contemplating investments in equipment and staff to serve that part of the market. The risk of fighting expensive legal battles with utilities also diminishes business appetite for doing business in Wisconsin.
- Third-party financing eliminates the upfront financial commitment that often stops low and middle-income households from pursuing solar. As a market-building tool, third-party financing can expand the residential customer base more effectively than either rebates or tax credits. Third-party financing is a linchpin mechanism for securing a just energy transition that engages customers of all income levels.
- The lack of legal clarity on this issue is an unjustifiable restriction on property owners’ ability to supply themselves with clean energy produced on their premises. The PSC has had several opportunities in recent years to settle this issue but declined to do so. It is past time for the PSC to clear a path for the homeowners, businesses, and nonprofits desiring to access onsite solar power owned by a third party.
Currently, Wisconsin case law allows for third-party financing of energy projects, but some electric utilities have denied interconnection to installations that would have been owned by third parties. They contend that such installations should be regulated as public utilities, even though they are designed to supply energy to only one entity: the host customer. In our view, a business that installs and operates energy equipment on a customer’s property for that customer’s exclusive use should not be regulated as a public utility.
PSC affirmation for third-party financing is essential to spreading the benefits of clean energy to all Wisconsin utility customers.
The deadline for submitting comments is June 14th.
If you have questions or represent a business or organization that would like to engage on this issue, please contact Michael Vickerman at email@example.com.
But a federal anti-dumping investigation jeopardizes solar power build-out in Wisconsin
Having secured approval today from the Public Service Commission (PSC) to build six more solar power plants, Alliant Energy’s Wisconsin affiliate is on a trajectory to source 20% of its electricity from solar power by 2025.
The PSC decision enables Alliant to construct and operate 414 megawatts (MW) of solar generating capacity in Dodge, Grant, Green, Rock, and Waushara counties. In combination with the 675 MW of projects approved in April 2021, Alliant’s solar power portfolio now consists of a dozen projects totaling more than one gigawatt, or 1,089 MW. Alliant’s approved solar projects are listed in the table below.
Over the last three years, the PSC has approved 1,850 MW of utility-owned solar generating capacity in Wisconsin. Of that total, nearly 60% of that generation will serve Alliant Energy’s Wisconsin customers.
“Today’s approval by the PSC affirms the uniquely valuable set of benefits that large-scale solar will bring to Wisconsin’s power industry,” RENEW Executive Director Heather Allen said. “When placed in service, these 12 solar projects will support the grid long after Alliant retires its coal-fired power plants, generating clean, affordable energy here in Wisconsin while delivering a reliable revenue stream to participating landowners and host communities.”
But a recently initiated U.S. Commerce Department investigation into alleged unfair trade practices has already begun to disrupt utility-scale solar farm development nationwide, including projects in Wisconsin. If not resolved soon, the collateral damage from this investigation will likely spread to the Alliant solar portfolio approved today, causing construction delays and increasing costs.
The investigation, which could extend until August 28th, targets solar products imported from Cambodia, Malaysia, Thailand, and Vietnam. Eighty percent (80%) of all U.S. solar panel imports are sourced from these four countries. If an unfair trade practice is identified, the Commerce Department is empowered to remedy the situation with very high tariffs on panels. For that reason, manufacturers in the targeted countries have been forced to cease production of solar panels destined for U.S. projects.
“Not even a month has gone by, and it is already disrupting solar projects at all stages of the development pipeline,” Allen said. “We are concerned that this investigation can do serious damage to the solar build-out now underway as well as undermine Wisconsin’s Clean Energy Plan.” Allen added: “We ask Senators Baldwin and Johnson and Wisconsin’s Congressional delegation to stand up for Wisconsin jobs, Wisconsin farmers, and Wisconsin’s rural economy and urge the Commerce Department to issue a negative ruling on this matter as soon as possible.”
APPROVED ALLIANT ENERGY SOLAR PROJECTS
Approved April 28, 2022
||Capacity (in MW)
Approved April 21, 2021
||Capacity (in MW)
RENEW Wisconsin, together with a coalition of Clean Energy Advocates (Clean Wisconsin, Environmental Law, and Policy Center, Vote Solar, The Nature Conservancy, Wisconsin Conservation Voters, and the Wisconsin Health Professionals for Climate Action), submitted comments this week to the Public Service Commission in favor of protecting and improving net metering in Wisconsin.
The Commission asked for remarks on four key questions and shared a 60-page memo from the Regulatory Assistance Project describing net metering policy issues, changes to net metering in other states, and several other aspects for consideration. The comment period closed on Tuesday, March 22, 2022.
Wisconsin’s customer-owned solar market is falling behind our neighboring states due to a patchwork of service terms and artificial market barriers. Our coalition comments highlighted several key factors contributing to the issue:
- The absence of a statewide net energy billing policy has fostered an inconsistent and confusing patchwork of tariffs across Wisconsin.
2. Low net energy billing ceilings and low export rates effectively exclude many larger customers from investing in solar systems.
3. Encroachment of utility-owned DG reduces behind-the-meter installation opportunities for customers and solar contractors.
4. The lack of clarity over third-party financing hampers the solar marketplace.
Solar installers, solar customers, clean energy advocates, and climate activists submitted comments echoing these themes. Here are some quotes from the commenters:
“The time has come for the Wisconsin Public Service Commission (WiPSC) to take a customer-centric approach to address the need for dramatic greenhouse gas emission reductions.”
Kerry Beheler and Gary Radloff
“Larger commercial and industrial customers should be allowed to net meter on larger projects that help them displace a greater percentage of their usage with on-site renewable generation. Adjacent states have raised net meter limits above 1000 kW for these customers. State goals of increased renewable energy are efficiently met with an on-site generation that is offsetting load, and this also possibly reduces the need for additional transmission infrastructure. Net metering is one good tool encouraging on-site renewable generation.”
“I support a robust net metering policy for Wisconsin. The adaptation of solar power is critical for our energy independence and to mitigate the impact of climate change.”
RENEW and its allies explained their priority to improve net metering in the near term to “make net billing tariffs more consistent across Wisconsin utilities.” But we also urged caution that no other reform that could diminish customers’ value proposition for investing in these grid-beneficial technologies should be pursued before reaching much higher solar penetration levels and analyzing the impact of such potential changes.
Net metering is a valuable tool that helps customers generate their energy in a manner that provides both system and public benefits, including carbon emission reduction and economic development. It drives solar deployment and is easily understood and accessible to customers. RENEW will continue to participate in this conversation at the Commission and share results as this process moves forward. Wisconsin can improve customer transparency with a more uniform statewide approach but should be very cautious about risking the benefits of distributed generation by altering rate design.
In June of 2020, the Public Service Commission of Wisconsin (PSC) opened an investigation into parallel generation (docket 5-EI-157). Parallel generation refers to distributed generation (DG) that is sited at a customer’s premises and can 1) produce energy for the customer’s energy use, and 2) produce and sell to the utility energy that exceeds the customer’s use. The most common type of DG is a solar photovoltaic (PV) rooftop system.
According to the PSC Notice of Investigation, this ongoing parallel generation investigation aims to gather information on costs, markets, emerging technologies, and barriers to DG in the state. A January 2021 RENEW blog described the initial activities in the docket.
After gathering information, the PSC made an initial decision in the docket to further explore:
- avoided costs and buyback rates for DG;
- net metering;
- contracts; and
- consistent terminology and terms of service across the state.
To better understand the value of DG, the PSC directed the five largest investor-owned utilities in Wisconsin to provide modeling and calculations of ‘avoided costs’ and revise the rates at which the utilities purchase energy from DG (also called ‘buyback rates’).
The utility’s buyback rate is a critical economic variable for DG. When homeowners and businesses entertain the idea of solar generation on their rooftops, they must first consider the costs and benefits of installation. The principal economic benefits of installing solar are reducing the energy you buy from the utility and getting paid for the excess energy you sell to the utility. Outside of the net energy billing services available for small installations, most utilities in Wisconsin pay very little for the energy they purchase from DG customers. Utility payments to DG customers don’t recognize the value of local, clean energy, which then oppresses the development of DG and hinders the advancement of carbon reduction goals.
It became apparent that upcoming PSC decisions would reset buyback rates and influence the business case for DG in Wisconsin, potentially for decades to come. As a result, RENEW put together a plan to participate in the utility cases and contracted with GridLab and Synapse Energy Economics to provide expert testimony on the issues.
When the utilities filed their buyback rate applications in early September last year, there were no major surprises to the clean energy community. Rather than model and calculate the long-term avoided costs of local, renewable DG, as the Commission requested, utilities either cited short-term marginal prices for some costs or simply stated that DG provides no value for other costs. RENEW needed to do more than simply critique the utility applications. The RENEW team developed a complete counterproposal for the Commission’s consideration, premised on criteria established by the Commission and just, reasonable buyback rates for DG customers.
Over several months, RENEW collaborated with its consultants and Keyes & Fox, a firm dedicated to clean energy law. Focusing on the Commission’s conceptual framework of avoided energy, generating capacity, and transmission costs, RENEW’s team gathered information, developed and ran market models, and calculated buyback rates. This ensured that RENEW’s proposal would meet the Commission’s requirements and recognize the actual value renewable DG provides to all utility customers.
These efforts resulted in a comprehensive framework for the Commission to consider and adopt for all utilities across Wisconsin. The RENEW team is now submitting testimony and evidence to support this comprehensive framework in all five utility cases.
RENEW now needs your support! The Commission will soon open the public comment period for these five cases and needs to hear from clean energy organizations, climate activists, businesses, and residents across Wisconsin. Below is a list of the five utility cases. RENEW will update the list with dates and direct links to make public comments when the public comment period becomes known. Since Commission decisions in these cases will set a precedent for all utilities in Wisconsin, we encourage you to comment on all 5 cases.
Click on applicable links below to submit comments for each utility.
Energy Policy Nerd Alert!
If you are interested in reading through the details of RENEW’s testimony filings, below are links to direct testimony filings for the case proceeding first (Xcel Energy, aka Northern States Power Company-Wisconsin). Testimony for other cases mentioned above will be available at a later date.
Direct Testimony of Andrew Kell
Direct Testimony of Michael Vickerman
Direct Testimony of Divita Bhandari (Synapse consultant)
Direct Testimony of Rachel Wilson (Synapse consultant)