A judge for Wisconsin’s utility regulatory agency heard testimony Friday on proposals from two utilities seeking to invest nearly $400 million in new solar energy projects.
Madison Gas & Electric and Wisconsin Public Service Corp. together want to buy 300 megawatts of generation from two proposed solar farms.
Chicago-based Invenergy has proposed building a 300-megawatt project, called Badger Hollow, in western Iowa County. More than 100 times the size of any solar project in Wisconsin, it would be one of the largest solar farms in the country, with a footprint roughly twice the size of the UW Arboretum.
NextEra Energy Resources has proposed building a 150-megawatt solar farm, known as Two Creeks, between Manitowoc and Kewaunee.
The utilities are asking the Public Service Commission for permission to buy all of Two Creeks and half of Badger Hollow for a combined $390 million.
They say it’s an opportunity to buy cheap, clean energy that will save their customers more than $180 million over investing in other types of generation. MGE estimates bills will go up about 1 percent in the first year of operation, while WPSC says its customers bills will go down about 1 percent.
But a PSC engineer questioned WPSC’s cost analysis and found the project could end up costing the Green Bay utility’s customers up to $144 million more than purchasing a share of Alliant Energy’s new generators at its Riverside Energy Center in Beloit, which the utility disputes.
Under questioning from WPSC’s attorney, Alex Vedvik said the assumptions in the utility’s price model reflected a “good case” scenario and that he considered less sunny alternatives.
Attorneys for the PSC and a group of Iowa County landowners opposed to the project grilled witnesses regarding the modeling WPSC used to come up with its estimate that the purchase will save ratepayers $124 million.
There were also questions about the cost of connecting the projects to the power grid, which are estimated at $3.5 million but could go up or down before the project is built, and whether the grid operator could change the way it counts solar panels toward a utility’s ability to meet power demand.
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If the solar credit rate were to drop in the next three decades, the utilities could need to build or purchase additional generation resources.
The utilities have said the project not only saves money but satisfies consumer demand for renewable energy, which prompted Judge Michael Newmark to question how the utilities know that’s what their customers want.
Jeff Knitter, director of planning for wholesale energy at WPSC’s parent company, WEC Energy Group, said customers in general — including those of WPSC — have an interest in replacing coal and natural gas generators with renewable energy based on reports in the news media, trade publications and “protesters outside our offices.”
There were no public comments made at Friday’s hearing. The PSC received two written comments on the utilities’ proposal. One was a letter from Madison Mayor Paul Soglin in support of the utility plans; the other referenced a different issue.
It will be up to the three-member PSC to determine whether purchasing the solar farms will impair the utility’s efficiency, exceed their future needs or increase the cost of service without also increasing the value or quality of service.
Earlier this week Newmark heard evidence in a parallel case to consider whether to allow the private developers to build the solar farms. Under the proposed arrangement, the utilities would take over the project once the commission approves it for the developers.
In an unusual step, the commission has scheduled a March 6 hearing for oral arguments where utilities and other parties can make their case and commissioners can ask questions of the applicants.
The Badger Hollow project has generated opposition from some neighbors who object to the loss of prime farmland and are concerned about the environmental impact of such a large project when the state has no rules for siting solar farms.
Consumer advocates have questioned the need as well as the two-step permitting process, which is less rigorous than if the utilities proposed building the farms themselves.
“Just because these are facilities that the utilities and green-minded organizations and consumers want doesn’t mean the PSC shouldn’t conduct a thorough review,” said Kate Hanson, staff attorney for the Citizens Utility Board, which represents customer interests. “If the projects are wonderful in terms of siting and cost, then they will get approved even under very stringent review.”