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PSC votes on petition for third-party financing for solar energy

By Ethan Duran
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A contractor’s plans to install and maintain solar systems on a family home in Stevens Point won’t be affected by state laws for local utilities after the latest Public Service Commission ruling, according to a report.

The Public Service Commission voted 2-1 on Dec. 1 to rule on nonprofit solar energy promoter Vote Solar’s petition to free third-party financers from being regulated as public utilities, the Wisconsin Examiner reported. Two labor unions, the Wisconsin Building Trades Council and the International Union of Operating Engineers Local 139, spoke out in opposition to deregulating out-of-state, third-party owners and asked for more clarity from the commission’s decision.

Vote Solar filed a petition in May 2022 to rule owners of third-party financed photovoltaic systems won’t be subject to the same rules as public utility. “(Owners) will not be deemed to be, or regulated as, a ‘public utility’ under Wis. Stat. § 196.01(5)(a), when the system is the subject of a lease or power purchase agreement (PPA) between the owner of the third-party financed system (referred to herein as a “DER Provider”) and a host customer,” a memorandum said.

A nonprofit member wanted to use third-party financing for a solar system on their home in Stevens Point through a lease agreement, Vote Solar’s petition said. Owners wanted to control their energy costs over the long-term by installing DERs but might not be able to due to upfront payments needed, the nonprofit added.

“Vote Solar seeks certainty from the Commission on these members’ behalf that the DER Providers are not at risk of regulation as public utilities because such regulation would undermine the value of those systems,” the petition said. Members who wanted third-party financed systems included homes, businesses, farms and places of worship.

“Clarity on Vote Solar’s positions would benefit these nonmember Wisconsinites, as well as the individual, non-member businesses like solar installers that seek to enter into leases or PPAs for projects similar to the project described in this Petition throughout Wisconsin,” Vote Solar officials wrote.

Members of the Local 139 were “deeply concerned” by the action which allowed entities to sell power in Wisconsin without regulatory oversight, union president and business manager Terry McGowan said.

“Experiences from other states show that unregulated third-party owned rooftop solar leads to predatory pricing practices, decreased reliability and an increase in utility costs for the poorest in Wisconsin,” McGowan said. Rooftop solar companies were also likely to use transient, out-of-state and low wage workers over local trade workers, he added.

The discussion didn’t define whether the ruling applied to the Steven’s Point member’s case or for the entire electric industry in Wisconsin, the union president added. “Until the written decision is issued, we cannot assess the full impact of the Commission’s actions.”

Republican commissioner Ellen Nowak said Vote Solar’s request was an attempt to change Wisconsin law, which the PSC doesn’t have power to do, the Wisconsin Examiner reported. “We have repeatedly denied similar requests in the past, noting that this is for the Legislature to decide and we lack the authority to give Vote Solar what it seeks,” she said.

The Legislature hadn’t enacted bills that were introduced to clarify third-party power providers weren’t utilities and Nowak argued that in making that judgment the PSC should go through the rulemaking progress, the Wisconsin Examiner reported.

The Environmental Protection Agency said third-party financing is one of the most popular methods of solar financing and works through solar leases and power purchase agreements.

A developer will sell power solar generated power to a customer at a fixed rate under a PPA, usually lower than the local utility, and the energy system offsets the customer’s electric utility bill, the EPA said. In a lease, a customer signs a contract with an installer or developer and pays to use a solar system over a period instead of paying for power generated.


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