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Governor Evers Okays PSCW to Explore a Fairer Distributed Solar Rate

SOUL is uncertain whether intervenors will be able to participate in Docket 1-AC-256  “Section 119 rule making,” but the new rules established by the Commission are likely to either propel or limit investment in distributed grid modernization in Wisconsin. 

On February 8, Wisconsin Public Service Commission staff posted a memo from Governor Ever’s office announcing it would allow the Commission to explore regulation changes pursuant to Wis. Stat. §227.135(2): “relating to rules for interconnecting distributed generation facilities (Wis.
Admin. Code ch. PSC 119).

To date, Wisconsin energy law has remained silent on the matter of the economic value of solar power in Wisconsin. PSC CODE 119 RULES FOR INTERCONNECTING DISTRIBUTED GENERATION FACILITIES makes no mention of rates or other economic arrangements between solar customer and the customer’s electric utility utility. Filings in an associated PSC “Parallel Generation” docket have revealed that most utilities reward customers retail rate for the solar power they produce up to the amount equal to the gird power power they consume. However, the price Wisconsin utilities credit for generation above this amount ranges greatly from about 3 to 12 cents per kWh.

Solar customers point to larger rate amounts observing that what is possible for one utility should be possible for all utilities. Because the excess solar generation rate is not regulated in Wisconsin, solar customers facing small credits are forced to install marginally-sized arrays resulting in systems that are less effective at displacing use of grid supplied power and reducing CO2 emissions over time. In contrast, customers receiving near retail rate for excess generation tend to install larger arrays allowing more carbon-laden grid supplied power to be be displaced by solar power each day.

SOUL is uncertain whether intervenors will be able to participate in Docket 1-AC-256  “Section 119 rule making,” but for these reasons and others, the new rules established by the Commission are likely to either propel or limit investment in distributed grid modernization in Wisconsin. 

 A high price determination by the Commission, e.g. from 8-15 cents per kilowatt hour, will make investment in distributed solar and storage in Wisconsin more economic, safer, flexibly expandable and economically just. 

But utility interests argue this range in rates is 300 to 500% too high.  In essence, they pose that homeowner production of solar power has no other value other than what utilities define as “fuel costs.”  In 2020, fuel costs in MISO and Wisconsin were 2.3 cents per kWh. The “fuel costs” that utilities propose to equate are blind to utility capital investment in power plants, transmission, distribution and other utility-investments. The utilities’ limited range of considerations undercut the value of electric customer capital, the technical advantages their solar and battery systems add to the grid and their investments adds value by reducing demand for new power plants, transmission and distribution. 

A low price determination by the Commission, e.g. from 2-6 cents per kilowatt hour, will make investment in distributed solar in Wisconsin less economic, riskier, less expandable and economically less just.

If the rates determined by the new PSC rules fall with the two ranges described here, it is fair to observe that the PSC’s ruling will determine whether Wisconsin’a local economies immediately start developing distributed electric services or do so, inevitably, after wasteful and inexcusable delay.  

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