State regulators are considering a utility-backed solar energy plan that has drawn sharp criticism from consumer and renewable energy opponents alike.
WE Energies, which is the state’s largest public utility and serves customers in the southeastern corner of the state, is asking the Public Service Commission for permission to install 35 megawatts of solar panels on the property of its commercial, industrial and institutional customers.
The three-member commission is expected to vote on the plan Thursday.
Under the proposal — officially Solar Now, but sometimes referred to as “rent a roof” — WE Energies would own the panels and the energy they generate and pay each customer a monthly fee based on the performance of its system.
This is different from traditional utility solar programs, where customers pay a special rate to buy solar-generated electricity or purchase shares in “community solar” gardens and then sell the electricity back to the utility.
Opponents say participants will get less money than if they installed their own panels, and all utility ratepayers will bear the costs of the program, which they worry will become a template for other utilities to follow.
“It’s a bad deal for participants, it’s a bad deal for non-participants,” said Mike Barnett, a Madison energy consultant who submitted comments to the PSC. “It’s just a horrible deal for everyone except WE Energies.”
According to the company’s application, the program is a response to customer interest in renewable energy and would allow the company to “gain valuable knowledge, insight and experience operating distributed solar generation” while encouraging the growth of carbon-free electricity.
The proposal comes just three years after WE Energies attempted to impose special fees on customers with their own solar panels. That was ultimately rejected by a Dane County judge.
The Citizens Utility Board, which advocates for residential and small business customers, argues the program amounts to a new power plant that could cost ratepayers $128 million over the next three decades.
“A good share of that cost is the return they’re going to make on it,” said Tom Content, executive
Normally if a utility wants to build a new power plant, it must convince the PSC that it is needed and would be the most cost-effective way of providing reliable service for its customers.
But because each individual project would be capped at 2.25 megawatts, the cost would fall below the threshold for PSC evaluation.
Renewable energy advocates argue that the utility is trying to use its monopoly powers to elbow out the competition.
While solar installers stand to benefit from growing the state’s current solar generation capacity by more than 40 percent, other industry professionals worry about having to compete with a giant monopoly.
“What we would like to see is a holistic marketplace of choices and options,” said Tyler Huebner, executive director of Renew Wisconsin. “You can’t have a monopoly be the only option on the table. That’s a problem.”
Last month WE Energies rejected a proposal from the City of Milwaukee to let a developer put solar panels on its buildings and hook them up to the electric grid. Instead, the utility suggested the city participate in its own program.
In its letter to the city, the utility claimed state law prohibits third-party ownership of so-called distributed generation assets such as rooftop solar panels.
But the law is ambiguous, and PSC rules say utilities cannot refuse to connect just because the customer doesn’t own their panels.
The city of Milwaukee has endorsed the general idea of the Solar Now program but has asked the PSC to make modifications to the pricing and to ensure it doesn’t preclude customers from building and financing distributed energy through other means.
As a utility, WE Energies would earn additional revenue from the panels not available to individual businesses, which Barnett says would give them an unfair advantage over private sector competitors. And the lease payments are based on the value of afternoon electricity, which is expected to drop as more solar systems are installed.
“The utilities want to say this is a great deal. We’re a monopoly. Trust us,” Barnett said. “People have a lot of trust in the utility. They assume because they’re regulated by the PSC they’re going to be good players.”