After simmering on the proverbial back burner for nearly two years, the third-party financing issue relating to customer-sited solar power has been thrust back into the public spotlight as pressure builds to resolve the legal questions surrounding it.
The reemergence of this issue can be traced to two parallel developments. The first is a Public Service Commission (PSC) proceeding moving toward a ruling settling the legality of third-party-owned solar systems serving individual retail customers. The second is a lawsuit recently filed by the Midwest Renewable Energy Association in Portage County Circuit Court, challenging the PSC’s authority to regulate the financing of behind-the-meter systems that serve host customers only.
The PSC proceeding began in March 2019 when Eagle Point Solar, a Dubuque-based solar contractor, filed a complaint against We Energies for blocking the installation of rooftop arrays serving the City of Milwaukee. In its complaint, Eagle Point contends that PSC Chapter 119, which regulates the interaction between small-scale electricity producers and the utility grid, does not give We Energies the right to deny interconnection to a customer based on how the generating equipment is financed. According to We Energies, however, a third party owner of the equipment that supplies electricity to one customer under contract should be regulated as a public utility.
Following an extended period of legal maneuvering, the PSC set in motion a process for investigating Eagle Point’s complaint (Docket 9300-DR-104). In so doing, it expanded the scope of the proceeding to consider the public utility question that led to the interconnection denial. When the parties finished entering evidence into the hearing record, the PSC opened a public comment window on the proceeding, which ended on February 23rd.
Supporters of third-party financing sprang into action, led by RENEW. To illustrate the breadth and depth of support for opening up the solar market in this fashion, RENEW circulated an action alert encouraging those who care about this issue to submit comments supporting Eagle Point’s position. Networks such as Wisconsin Climate Table, Wisconsin Health Practitioners for Climate Action, and our own solar contractor e-mail list helped circulate RENEW’s alert beyond our own activist base. At the same time, organizations such as 350 Madison and Environmental Law and Policy Center (ELPC) asked their activists and members to post comments on the PSC website.
As a result of our combined efforts, a total of 336 individuals and organizations weighed with their views on the Eagle Point matter. Of that, 327 comments expressed support for opening the market to allow third-party ownership of solar electric systems in Wisconsin. In that overwhelming display of support, several themes prevailed, including the following:
Third-party financing is already expressly authorized in 28 states;
Allowing third-party-owned solar systems is consistent with Wisconsin case law;
The threat of being regulated as a public utility discourages businesses from providing solar power generated onsite to retail customers through leases and sale agreements;
Third-party financing would make solar power affordable to low-to-moderate income households and nonprofit entities such as schools;
Expanding solar financing options would help communities reduce their reliance on harmful fossil energy sources; and
Expanding solar financing options would invigorate local economies.
These arguments track closely to those articulated by Wisconsin solar contractors and consultants in a March 2019 filing urging the Commission to approve Eagle Point’s petition. Similar to our efforts during the comment period, RENEW shaped the themes in that statement and pulled together a coalition of market actors to demonstrate support for third-party financed solar energy. In the intervening two years, Eagle Point Solar and the City of Milwaukee labored to amass a set of facts and legal arguments to support a finding that WEPCO’s action was unlawful.
The merits of this case are clear-cut, as are the regulatory remedies. Other states that regulate electric utilities have taken steps to affirm the legality of third-party-financed solar, most notably Iowa, which did so in 2014, the result of a long and expensive legal fight waged by Eagle Point. In contrast to Iowa, the State of Wisconsin has allowed this issue to languish for many years without resolution.
But with the filing of briefs from parties on March 10th, the Eagle Point proceeding has finally reached the home stretch. The strong outpouring of public support for third-party financed solar tells us that a policy call from the PSC is long overdue.
In a brief representing RENEW and other solar advocates, we urged the PSC to take the following actions:
Order WEPCO to interconnect the City of Milwaukee solar projects, regardless of how those projects are financed;
Clarify that a utility may not deny interconnection based on project ownership, and
Clarify that third-party owners of customer-sited distributed generation are not “public utilities” under Wisconsin law.
RENEW would like to thank Eagle Point Solar and the City of Milwaukee for leading this crucially important regulatory battle, ELPC for drafting a particularly persuasive legal brief on behalf of clean energy advocates, and the 327 commenters who affirmed their desire for an expanded solar marketplace free of utility interference.
The unfolding situation in Texas remains dire. The grid operator, the Electric Reliability Council of Texas (ERCOT) first warned of rolling blackouts on Sunday, February 14, 2021. The blackouts and widespread power outages lasted for days in the Lone Star state amidst some of the harshest winter weather in years. Millions of people were left without power and dozens perished.
Now just ten days out from the onset of the crisis, water contamination and shortages (resulting from frozen and broken pipes) continue to threaten the health and welfare of Texas residents.
Immediately preceding the energy crisis, a powerful winter storm blanketed the southern Plains with freezing rain and snow, followed by record low temperatures. Frigid temperatures had a stranglehold on the central U.S. for two straight weeks, extending from Canada to Mexico. Many parts of Texas and the South rely on electricity as their primary source of heat, as opposed to gas, propane, or wood, which are more commonly used in the northern United States. The prolonged cold snap created a high demand for natural gas, for both heating and electricity generation around the region, triggering an upsurge in electricity consumption.
Everything that could go wrong, did go wrong
As demand skyrocketed, supply plummeted. Even before the winter weather moved in ERCOT had nearly 14 gigawatts (GW) of electric-generating capacity offline for maintenance. As other generating sources were shuttered, ERCOT was left with as much as 34 GWs of electric production offline. This periodically amounted to 30-42% of ERCOT’s total electric capacity.
Unfortunately, the outages gave rise to a disinformation campaign that attempted to implicate frozen wind turbines as the principal cause of the power outages. This narrative is patently false. While some wind turbines were frozen and unable to produce electricity, the cold and ice had a far more disruptive effect on thermal plants.
Wind, natural gas, and other energy sources need to be weatherized
In fact, renewable energy generation facilities played a key role in keeping the lights on. According to ERCOT, wind power output exceeded forecasted generation numbers during the blackouts, even with the icing of turbines. At times, solar generation has also exceeded output. Wind turbines would have done better if they had used heating technology as Sweden does, to prevent icing and keep turbines generating power in extreme cold. Using heating carbon-fiber technology similar to aircraft, Swedish maintenance workers add a thin layer of material to the wings of the turbines that can be automatically heated can prevent ice before it forms.
The bottom line is that our electricity grid and all types of power generation are vulnerable to extreme weather events. We need to plan for these events and invest in grid resilience and weatherization to prevent disasters like this from repeating.
There is no single cause for the situation currently unfolding in Texas, and no silver bullet for preventing a repeat situation. A combination of record demand due to the prolonged cold temperatures, and generators not equipped to function in very cold temperatures are responsible for the rolling blackouts now plaguing the state.
Planning and preparing for extreme weather has to be part of the conversation
Renewables are reliable sources of energy from Texas to Antarctica. Even during extreme weather events, wind and solar can function when traditional energy sources have gone offline. More renewable energy sources, in more locations, will diversify our grid and make it less susceptible to the forces of nature and the market. Microgrids and energy storage are important tools to help shore up the reliability and safety of our grid.
Extreme weather events will continue to complicate our lives and strain our power grids over the foreseeable future. By incorporating more sources of renewable energy, we can reduce problems and increase reliability in our electric grid.
As part of its tenth annual Renewable Energy Summit, RENEW Wisconsin will recognize individuals and organizations who have made significant and lasting advances in renewable energy development here in Wisconsin.
Titled “Building the Clean Energy Mosaic,” this year’s Summit will be hosted virtually over three days from Tuesday, January 12th through Thursday, January 14th, 2021. The theme of this year’s event, “Building the Clean Energy Mosaic,” will highlight the diversity of technologies, people, and scale needed to shape our clean energy future.
Roster of 2020 awardees
Renewable Energy Business of the Year
Northwind Solar Cooperative, Amherst
Renewable Energy Catalysts of the Year:
Sid Sczygelski & Ali Wolf, Aspirus Health, Wausau
Charles Hua, Madison
Renewable Energy Champion of the Year
Oregon School District
Renewable Energy Pioneer of the Year
Dane County
Renewable Energy Project of the Year
Two Creeks Solar Park, Manitowoc County
NextEra Energy Resources (developer)
Wisconsin Public Service Corp. (joint owner)
Madison Gas and Electric (joint owner)
Renewable Energy Business of the Year
NorthwindSolar Cooperative has been a fixture in Central Wisconsin’s renewable energy marketplace since 2007, operating principally in the residential and small commercial segments. Throughout its history, Northwind has been acutely conscious of the value of community ties. Northwind’s PV systems are a common sight in Amherst. The company has operated the Grow Solar – Central Wisconsin group purchase program for four straight years, designing and installing more than a megawatt of solar capacity for 168 residential customers. After the company reorganized itself as a worker-owned cooperative structure, Northwind committed to building a new headquarters building in Amherst Business Park that showcases its talents and services. With 44 kW of PV capacity and multiple battery configurations, Northwind’s new headquarters building invites prospective customers to pursue solar + storage as the energy package of the future.
Renewable Energy Catalysts of the Year
Aspirus Health is a health care organization serving much of central and northern Wisconsin and Michigan’s Upper Peninsula, with 10 hospitals, 50+ clinics, labs and other service-providing facilities within its system. In 2018 Aspirus launched a systemwide initiative to identify and implement strategies for slashing its energy overhead and scaling back its carbon footprint. Sid Sczygelski, chief financial officer of Aspirus, chairs this initiative, while Sustainability Director Ali Wolf directs and coordinates this ambitious undertaking. Their goal is to reduce carbon emissions systemwide 80% by 2030. Going into 2021, Sczygelski, Wolf and the Aspirus sustainability team have made great progress to date. Aspirus has integrated into its buildings more than 900 kilowatts of solar PV on its rooftops, saving more than $600,000/year in energy expenses. In 2021, Aspirus plans to double its use of solar energy systemwide and complete construction on its most energy-efficient facility yet, a clinic in Wausau.
In 2017, students and staff at Madison West High School started work on a campaign to power their school with a rooftop solar PV system. That year, Charles Hua, then a junior, took the helm of West Green Club and launched a fundraising and outreach campaign that blossomed into one of the largest youth-led sustainability efforts in Wisconsin. From June 2017 through 2019, the West Green Club raised nearly $90,000 from staff, students, parents and local foundations, accounting for nearly 50% of the cost of their 128 kW solar PV system. Installed last summer by Westphal Electric, Madison West’s solar system is now the largest array supplying electricity to a Madison Metropolitan School District building. The example set by Hua and West Green Club helped inspire the school district to adopt a 100% renewable goal for all of its facilities. Hua is now a junior at Harvard University.
Renewable Energy Champion of the Year
Long a leader in pursuing solar power for its operations, Oregon School District took advantage of an opportunity in 2018 to push the envelope on sustainability at its new Forest Edge Elementary School in Fitchburg. Collaborating with HGA’s Madison office, an architectural and engineering design firm, the school district financed and saw to completion the first net zero energy public school in Wisconsin. Equipped with a 646 kW rooftop solar array, a ground-source heat pump system and onsite battery storage, Forest Edge is an all-electric building. There is no gas connection to the school. Completed in the fall of 2020, Forest Edge represents a quantum leap in capturing, controlling and maximizing the economic value of sunshine and ground temperatures to heat, cool and power a building where many people congregate.
Renewable Energy Pioneer of the Year
Impatient with federal and state government inaction on climate change, Dane County decided to roll up it sleeves and get to work, starting in 2017 with the creation of the Office of Climate Change and Energy. The County’s approach to reducing fossil fuel use has been aggressive and remarkably systematic for a local government. A number of these actions bore fruit in 2020. These include:
Throwing the switch on a biogas processing plant in April that converts gas from landfill waste and cow manure into a pipeline-grade renewable fuel;
Releasing a Climate Action Plan, also in April, containing recommendations for reducing greenhouse gas emissions countywide 45% by 2030 and achieving net zero emissions by 2050;
Partnering with Madison Gas and Electric to host a 9-megawatt solar array on airport property and purchase the output from that project, under a long-term contract; and
Purchasing property in the Town of Cottage Grove to host a larger solar array that will enable the County to offset all of its electricity usage with zero-emission power.
Renewable Energy Project of the Year
Developed by Florida-based NextEra Energy Resources in Manitowoc County, the 150-megawatt Two Creeks Solar Park was energized last November. It is now the largest power plant in the state of Wisconsin that is fueled by the sun. Jointly owned by Wisconsin Public Service and Madison Gas and Electric, Two Creeks effectively doubled solar generation capacity in Wisconsin, and its output will equal the electrical consumption of 33,000 residential households. Two Creeks was the first solar power plant to receive approval from the Public Service Commission, and the first to be approved as a utility-owned asset. Seeing Two Creeks to completion opens the door to a new chapter in electric power, one highlighted by the emergence of solar power as the cleanest, more affordable and least risky supply option available to Wisconsin electric providers.
This year’s summit program will also draw attention to other milestones and notable achievements in 2020, including the following:
The Public Service Commission approved two large solar farms—Badger State Solar and Paris Solar—that will add 349 MW of solar power to Wisconsin’s electric generation portfolio;
Madison Gas and Electric completed two smaller solar farms in its service territory, with a combined capacity of 14 MW, to supply several customers under contract and expand its shared solar program;
Grants from RENEW’s Solar for Good program resulted in 27 new solar installations across the state totaling 1,265 kW of operating capacity.
Two Eau Claire high schools—Memorial and North—celebrated the completion of their 126 kW solar arrays supported by Solar on Schools, a joint venture between the Couillard Solar Foundation and the Midwest Renewable Energy Association.
Eagle Point Solar installed 400 kW(AC) of PV capacity, serving four City of La Crosse-owned buildings.
The Two Creeks Solar Park, located in Manitowoc County, was energized last week, becoming the state’s largest generating station powered by the sun. Developed by Florida-based NextEra Energy, Two Creeks is jointly owned by two Wisconsin electric utilities: Wisconsin Public Service Corporation (WPS) and Madison Gas and Electric (MGE). WPS owns and operates a 100 megawatt (MW) share of the 150 MW power plant, while MGE has the remaining 50 MW share.
Located next to the Point Beach Nuclear Plant, Two Creeks effectively doubles the amount of solar generating capacity in Wisconsin to 300 MW, and will, over the next six months, produce more electricity than the combined output from all other existing solar systems in Wisconsin. Expected to produce more than 300,000,000 megawatt-hours a year, Two Creeks will generate about one-half of one percent of the state’s overall supply of electricity, which is the equivalent of what 33,000 residences consume annually.
Along with the 300 MW Badger Hollow Solar Farm in Iowa County, Two Creeks received approval from the Public Service Commission (PSC) in April 2019. These two were the pioneering solar farm proposals that navigated through the PSC’s power plant siting process and won approval from the agency. At the same meeting, the PSC granted a joint request from WPS and MGE to acquire Two Creeks.
Since then, the PSC has given the green light to two more solar farms totaling 249 MW in capacity, including NextEra Energy’s 100 MW Point Beach Solar Farm next door to Two Creeks. Point Beach Solar is under construction and should be completed in the fall of 2021.
Building Two Creeks was no small undertaking. It involved punching thousands of posts into the ground to support horizontal tracking systems spreading across 800 acres of relatively flat terrain. Mounted on these rotating poles are more than 500,000 panels that follow the sun as it crosses the sky going east to west. Between the first rays of sunlight and the last ones before sunset, these panels soak in the sunshine and convert it to electricity.
A plant like Two Creeks will begin displacing higher-cost power at the moment it is energized, and these savings will grow significantly over the course of its 30-to-50-year life. True, the utilities will need to recover the cost of building the solar farm, somewhere in the vicinity of $195 million. But the savings utilities expect to reap from avoided fossil fuel purchases and pollution control expenditures will more than outweigh their investment in a zero-carbon generation source. Seen in this light, large-scale solar is indisputably the most cost-effective supply option that an electric utility can pursue going forward.
The benefits from Two Creeks extend beyond ratepayer savings. Manitowoc County and the Town of Two Creeks, the jurisdictions hosting the solar farm, expect to reap a combined $600,000 in local aids each year while the project remains in service. That number grows to $18,000,000 over the course of 30 years, which is the projected minimum lifespan of Two Creeks.
Solar is a noncombustible energy resource that does not emit any gaseous emissions or particulates when converted to electricity. Deploying solar at the scale of Two Creeks will capture significant public health and air quality benefits by avoiding emissions that are associated with conventional fossil generation plants. In another PSC proceeding involving a 15O MW solar farm in eastern Wisconsin, the developer anticipates annual emissions reductions in the following categories of pollutants: (1) nitrogen oxide (NOx) emissions by 195,000 pounds; (2) methane (CH4) by 20,000 pounds; (3) nitrous oxide (N2O) by 5,000 pounds; and (4) carbon dioxide (CO2) by 405 million pounds.
Decarbonizing the state’s fleet of power plants is also a job creation strategy. The PSC estimates that somewhere between 200 and 300 jobs were created during the project’s construction window. It’s quite likely that many of the workers involved in the building of Two Creeks are now hard at work constructing the adjoining Point Beach solar farm.
In the annals of Wisconsin electric utility history, Two Creeks represents a noteworthy milestone, as the first solar farm to clear the PSC’s power plant review process and become a valuable addition to the state’s portfolio of power plants. And it took only 18+ months from the crossing of the regulatory finish line for Two Creeks to start sending power into the grid.
Two Creeks can also be viewed as the lead entry in a parade of large solar farms seeking to cross the same regulatory finish line and proceed to construction and completion. Looking out over the next 12 months, the PSC will review and make decisions on six solar farm applications totaling 1,150 MW (see table below).
Project name
Developer
County
Capacity
(in MW)
Anticipated decision date
Paris
Invenergy
Kenosha
200
11/2020
Wood County
Savion
Wood
150
12/2020
Grant County
NextEra Energy
Grant
200
4/2021
Onion River
Ranger Power
Sheboygan
150
5/2021
Darien
Invenergy
Walworth/
Rock
250
7/2021
Apple River
National Grid
Polk
100
9/2021
Springfield
National Grid
Dodge
100
9/2021
Within that same 12-month window, we expect two more PSC-approved solar farms—Badger Hollow I (150 MW) and Point Beach (100 MW) to cross the finish line and begin generating electricity.
What we’re seeing here is the emergence of a new resource paradigm that is ushering in a major wave of public works construction across the state. As this transition unfolds, solar power will become widely recognized as a linchpin in the state’s economy, extending through this decade and beyond.
Last week the Federal Energy Regulatory Commission (FERC) dismissed a challenge to state control of net metering. The unanimous decision made on Thursday, July 16, 2020 was great news for RENEW Wisconsin and our members. Homeowners, business and manufacturers that generate their own solar energy can now breathe easy, knowing that the oversight for net metering policy remains in the hands of Wisconsin’s own Public Service Commission.
The New England Ratepayers Association (“NERA”) had petitioned the FERC to take control over net metering policy for the entire country. If the petition were granted, states would have lost the ability to set policy on solar electricity generated by utility customers. The challenge to state control of net metering, the policy that enables energy producers to get bill credit for the extra energy they push back on to the grid, threatened the solar investments of thousands of families and businesses in Wisconsin.
RENEW joined dozens of other clean energy advocacy organizations in a petition to dismiss the issue and encouraged Wisconsin’s political leadership to get involved. Many elected officials from around the country joined in the fight to protect net metering including Wisconsin’s own, Attorney General Josh Kaul.
An upcoming decision by the Federal Energy Regulatory Commission (FERC) has the solar industry, legislators, clean energy advocates, and state regulators extremely worried over the viability of solar power for homeowners and businesses.
The New England Ratepayers Association (“NERA”) has petitioned the FERC to take control over net metering policy for the entire country. If the petition is granted, states would lose the ability to set policy on solar electricity generated by utility customers. NERA’s petition has sparked widespread opposition from states, legislators, individuals and renewable energy businesses. Attorney Generals from 15 states, including Wisconsin’s own Attorney General Josh Kaul, submitted a protest in opposition to the petition.
What inspired 15 attorney generals, three governors, and state officials from across the political spectrum to engage in a federal energy policy debate?
For almost 40 years, states have had the authority to design and implement net metering policies. The NERA petition aims to reverse this long-standing precedent and eliminate Wisconsin’s ability to tailor utility net metering services to best fit local conditions.
What is net metering?
As defined by the Solar Energy Industries Association, net metering is a billing mechanism that credits PV system owners for the electricity they add to the grid. For example, if a residential customer has a rooftop PV system, it may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods when the home’s electricity use exceeds the system’s output. The credit is set at the customer’s retail energy rate. Under this arrangement, customers are only billed for their “net” energy use. This practice enables utility customers who are producing their own electricity to decrease their electricity bills, and it is a powerful tool for driving investment in solar power.
What is at stake here?
According to the U.S. Energy Information Administration, Wisconsin has 3,879 residential net metering households, 874 commercial net metering customers, and 74 industrial net metering customers. These customers are at risk of increased electric bills with the potential loss of net metering.
In addition, the 2019 jobs data from Clean Energy Trust found that before the pandemic hit, Wisconsin employed over 3,798 solar installers as part of the statewide clean energy workforce. With less financial incentive for installing solar, these jobs and other clean energy jobs would be at risk if this petition is granted.
Net metering is good for everyone
RENEW Wisconsin joined other organizations in protesting this petition to wrest control of net metering away from states and put it in the hands of a federal agency. Our protest, authored by attorneys Dave Bender and Carter Hall of Earthjustice with clients Sierra Club and Vote Solar, includes explanations of the value of net metering policies for the electric grid. Here are some essential excerpts from the protest:
Net metered facilities (such as solar) provide capacity value by avoiding otherwise required generation, transmission and distribution capacity.
With net metering, solar has become an affordable option for almost everyone, not just high-wealth families. Net metering supports the increased use of distributed solar (such as solar arrays on the rooftop of a house or business), stimulating investment across communities while reducing the environmental and health impacts on low income communities and communities of color, who are disproportionately burdened by current forms of energy production.
Solar installers operate in a competitive marketplace, driving down prices and passing savings onto consumers.
Distributed solar has predictable energy production.
Allegations of cross-subsidies are unfounded and overstated.Net metered customers often reduce their own loads and system loads during the cost-causing peak hours used to allocate costs of retail service, meaning they consume less of the fixed and demand services as measured by cost of service analysis.
Strong bipartisan support for state control of net metering
Millions of individual citizens and businesses across the country have made significant investments to generate their own electricity and have entered long-term contracts premised on the continuation of policies and programs regulated at the state level. Granting the petition would create enormous uncertainty and financial harm for our citizens and businesses at a time when they are already struggling with the economic impacts of the coronavirus.
More than 240 comments in opposition have been submitted to the FERC, and just five comments in support of taking away state control of net metering. Here are a few highlights:
Josh Kaul, Attorney General of Wisconsin said, “Suddenly changing the rules on Wisconsinites who invested in clean energy for their homes is wrong and bad for the future of clean energy,” said AG Kaul. “The federal government shouldn’t be disrupting state programs that are good for the environment and help consumers save money.” 6/15/20
Frank Knapp Jr.CEO and President of South Carolina Small Business Chamber of Commerce said, “…Net metering regulation properly resides with the states… We ask that the Commission reject the NERA petition. Moving it forward only serves the purpose of big special interests that find it easier to influence one group of federal commissioners rather than legislators, regulators and consumers in 50 individual states.” 6/11/20
Terry Kilgore, Virginia State Delegate (R-VA-1) wrote, “This case would set two bad precedents. It would move us closer to nationalized electricity regulation and give more power to unaccountable federal bureaucrats. We, as Virginians, must oppose this and fight to make sure the authority to set energy policy stays vested with Virginia’s General Assembly.” 6/20/20
Net metering is in jeopardy. The petition, if approved, would take the state out of the picture in designing and preserving net metering as we know it. You can count on RENEW to keep working to ensure that net metering policies remain in the hands of our state regulators and are designed to fairly compensate residents and business that have installed renewable energy.
Make a donation today to support this work and all of the ways RENEW Wisconsin is protecting and advancing renewable energy in Wisconsin.
