Renewable energy advocates are again asking Wisconsin regulators to bless a financing mechanism that could expand access to solar energy.
This time a former renewable energy advocate could cast the deciding vote.
Two groups — Vote Solar and the Midwest Renewable Energy Association — last week filed petitions asking the Public Service Commission to declare that third-party financing is legal under state law.
Vote Solar, a nonprofit advocacy group based in California, says it is seeking affirmation on behalf of Wisconsin members who want to install third-party-financed systems on their homes, businesses and places of worship.
MREA, a Wisconsin-based nonprofit advocacy and job training organization, and some of its members intend to provide third-party financing but have held off because of “the overhanging threat” of PSC investigations and enforcement proceedings.
While contract details vary, third-party ownership is a financing mechanism that could make solar energy available to more people, including residents who can’t afford the upfront costs and local governments, schools and nonprofits that can’t benefit from federal tax credits.
Wisconsin law says that public utilities are subject to regulation by the PSC, but the definition of a public utility is ambiguous: any entity providing “heat, light, water or power ... to or for the public.”
Renewable energy advocates say it’s clear that a company financing a customer-hosted system is not a “public utility,” but informal documents and the commission’s past refusals to rule on the issue have created regulatory ambiguity.
The groups say it’s time for the commission to resolve a “decade of uncertainty” and stop considering agreements on a case-by-case basis, which they say amounts to an effective ban since third-party providers have to absorb the costs of litigation unlike monopoly utilities, which pass them on to ratepayers.
Distributed energy resources (DERs) can include solar panels, batteries, thermal storage or smart power controllers that operate “behind the meter” — or on the customer’s property. Future applications could also include smart thermostats and electric vehicle chargers.
The town of Christiana is asking the courts to reverse the Public Service Commission’s approval of the Koshkonong Solar Energy Center, which would produce enough electricity to power about a third of the county’s homes.
Although they can supply power to the grid, MREA argues they are more akin to appliances than utility-scale power systems, though they can also benefit other utility customers by reducing energy and transmission costs as well as wear on equipment.
MREA points out the physical equipment is the same, as is the reduction in use of utility power, regardless of how it’s paid for.
“There is no difference to the public, the utility company, or the grid between customers who own DERs outright and those who utilize third-party financing,” the group wrote.
Renew Wisconsin says the lack of legal clarity creates “an unjustifiable restriction” on people’s rights to supply themselves with clean energy produced on their own property and that it’s “past time” for the PSC to clear the path.
Wisconsin law says homeowner associations can’t restrict peoples’ rights to install solar panels on their property. Many do it anyway.
Swing vote in play
Previous commissions have rejected similar petitions for rulings on the question of third-party financing, with conservative appointees arguing that is the Legislature’s job.
MREA last year sued the commission, arguing it had overstepped its authority by effectively preventing third-party-financing agreements. The case was dismissed, but in its petition MREA points out that the commission itself has told the court that a declaratory ruling is the appropriate process for deciding public utility status.
Earlier this year, the commission did consider a petition from Eagle Point Solar, an Iowa company whose agreement to install solar panels for the city of Milwaukee was blocked by We Energies.
But the commission deadlocked, with Chair Rebecca Valcq agreeing the practice was purely financial and Commissioner Ellen Nowak siding with the utility.
Commissioner Tyler Huebner abstained because of his involvement with that case prior to joining the commission. But neither of the new petitions are covered by his recusal agreement, meaning he could cast the deciding vote this time.
“It’s long past time we recognize that a financing arrangement for a homeowner, church, farm or small business does not infringe on the regulated monopoly utility model,” Cowles wrote. “You can finance anything from a new water heater to energy efficient windows to help reduce your energy consumption, and there’s no reason you shouldn’t be able to do the same to generate your own electricity.”
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The utilities, which have so far spent about $277 million on the project, say the price of steel has essentially doubled in the four years since construction costs were estimated, while the aluminum and steel wires have gone up 68%.
The lawsuit, filed Thursday on behalf of the Midwest Renewable Energy Association, argues the Public Service Commission has overstepped its authority by preventing non-utility companies from providing services such as financing.
Despite multiple attempts to deflect the issue to lawmakers, Wisconsin regulators are wrestling with the question again as part of a dispute between the state’s largest utility and an Iowa company that wants to lease solar panels to the city of Milwaukee.
The Public Service Commission voted 2-0 Thursday to allow the state’s largest utility to introduce evidence and arguments about who is considered a utility under state law -- a question the commission has declined to address -- as part of a related case.
Led by the conservative majority, the Public Service Commission declined Eagle Point Solar's request to say its agreement with the city of Milwaukee does not make the company a public utility subject to regulation.
The Commission did, however, agree to hold a hearing on whether We Energies can legally refuse to connect solar panels.
The county is asking the courts to strike testing requirements in the permit for stormwater that drains from the airport into Lake Monona through Starkweather Creek, where PFAS contamination has made fish unsafe to eat.
Three utility projects with a combined capacity of 574 megawatts have been delayed and face potential cost overruns largely stemming from difficulty securing solar panels and other key parts.
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Alan Watson, left, and Tommy Olson of Midwest Solar Power install solar panels on a Monona home in October 2021. Solar advocates are asking Wisconsin utility regulators to bless a financing tool that could expand access to the technology.