With legislation and court challenges stalled, Wisconsin regulators have deadlocked on the legality of a financing mechanism that could expand access to clean energy.
Two Public Service Commissioners disagreed Thursday on whether the state’s largest utility acted legally when it blocked an Iowa solar company from leasing solar panels to the city of Milwaukee.
Eagle Point Solar won a contract in 2018 to install 1.1 megawatts of solar panels on municipal buildings to help the city meet its clean energy goals.
But We Energies refused to allow the panels to be connected to its system, saying Eagle Point would be selling electricity to one of its customers in violation of its monopoly agreement. The utility later agreed to hook up panels on three of the seven sites after the city decided to buy rather than lease the panels.
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Eagle Point appealed the denial and asked the PSC to clarify whether a financing arrangement would make it a public utility.
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Commissioner Ellen Nowak agreed with We Energies’ position that the arrangement is illegal under current law.
“Eagle Point seeks permission to operate as a public utility ... in another public utility’s exclusive area,” she said.
Chair Rebecca Valcq said We Energies had no legal basis to deny the connection, which would allow electricity from the panels to flow onto the grid.
“What we’re talking about here are purely financial arrangements,” Valcq said. “These are scare tactics of a monopoly trying to hold on to the very last scraps of their monopoly.”
Citing his advocacy for third-party financing prior to joining the PSC, Commissioner Tyler Huebner recused himself from the decision, and the split vote resulted in no action on Eagle Point’s appeal.
Representatives of Eagle Point and the city of Milwaukee did not respond to requests for comment Thursday.
‘Follow the law’
We Energies spokesperson Brendan Conway said policies like third-party financing favor wealthy customers at the expense of those who can’t afford solar. He said the utility will “continue to urge the commission to follow the law.”
We Energies and other utilities have developed their own programs to lease customer rooftop space for utility-owned solar panels, recovering the costs — with a 10% profit — from all ratepayers.
Clean energy and consumer advocates say utilities are standing in the way of a financing mechanism that could make solar energy available to more people, including residents who don’t have thousands of dollars to pay up front and local governments, schools and nonprofits that can’t benefit from federal tax credits.
“(We Energies) supports renewables that it can build itself — and for which it can recover a return on equity,” solar advocates wrote. “And at the same time, (the company) seeks to block third-party financing that could open the door to affordable and accessible distributed self-generation by customers.”
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‘A hot potato’
Thursday’s vote marked a turning point in the commission’s willingness to engage on the issue.
In 2019, Nowak and then-commissioner Mike Huebsch voted to deny Eagle Point’s request to rule on the legality of third-party financing, arguing that was a job for the Legislature. But the commission did agree to take up the narrower issue of the interconnection denial.
Eagle Point then asked the courts to weigh in. A Dane County judge dismissed the case, throwing the issue back to the PSC, and Eagle Point’s appeal was also rejected.
Judge William Conley’s ruling throws the fate of the Cardinal-Hickory Creek transmission line into question just months after utilities began construction on the $492 million project.
The commission is facing a separate lawsuit from clean energy advocates seeking to force it to allow third-party financing.
Last year a pair of Republican lawmakers introduced legislation to allow third-party financing for solar, wind and other renewable energy sources. But the bills have yet to receive a hearing.
“They’re not moving at this point,” said one of the sponsors, Sen. Rob Cowles, R-Green Bay.
Valcq said the commission has an obligation to evaluate connection agreements based on the existing law.
“Clearly to me the Legislature has not demonstrated an interest in taking this up. It has become a hot potato,” Valcq said. “We already have a statute in front of us that we have the expertise and experience interpreting.”
Nowak agreed that the commission can evaluate individual agreements on a case-by-case basis, but said this one was not legal.
“If Eagle Point wants the law changed ... they must petition the Legislature for a change in the law,” she said. “The Legislature has had the opportunity to modify it and they have chosen not to.”
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