March 2019 Director’s Note

Since 2014, Wisconsin municipalities, tribes, school districts, and nonprofits have entered into public-private partnerships with third–party private businesses, which can take advantage of federal tax credits, as a way to finance solar PV projects on their property and avoid the substantial initial cost of purchase and installation (see Solar Energy Financing Guide).  The solar systems are installed behind-the-meter to provide electricity only to the building they are on, and are sized to comply with the net metering caps of the utility that interconnects them (so they offset only a portion of the electric use).  Typically, after six years, the public entity can buy the remainder of the solar system at a depreciated cost.

But, third-party solar financing came to an abrupt halt in Wisconsin in November 2018 when We Energies (WEPCO) notified Milwaukee that it would not interconnect 1.1 megawatts of solar systems designed and ready to be installed on six City buildings through a solar service agreement with Eagle Point Solar and Eagle Point Energy LLC. A grey area in Wisconsin law, the Public Service Commission of Wisconsin (PSCW) has chosen not to rule on this issue several times.

The basis of We Energies interconnection denial was their determination that Eagle Point was acting as a public utility in selling electricity at a retail rate to the City that already buys power from WEPCO. On March 6, Eagle Point filed a petition with the PSCW to appeal the denial of their interconnection application and, to get a ruling on whether a third-party agreement between two parties constitutes a public utility service. On March 27, WEPCO filed a letter with the PSCW asking that they not open a docket and again, defer to the legislature to address issues with policy consequences.

Meanwhile, the Milwaukee City Council moved to fund and fully own 20 percent or 209 kilowatts of solar PV installations on three public libraries of the six projects originally included in the 1.1 MW solar services agreement.  This will save an estimated $35,000 annually in energy costs The City will devise strategies, which include working with We Energies, on how to achieve their clean energy goals.

The costs of fully funding solar projects would make it more challenging for the City of Milwaukee and more than 140 other municipalities to reach their Energy Independent Community goals to generate 25 percent of their energy locally by 2025. Milwaukee needs to install 15 MW of renewable energy to reach that first 25 x ’25 milestone for government operations, and significantly more to meet the targets of the Paris Accord they support. Wisconsin has only 1 of  9 policies that support local authority over energy compared with other states, ranking it in the bottom nine in the 2019 Community Power Scorecard (see EnergyOnWI News, February 2019).

Municipalities will need to work with their utilities on energy efficiency, renewable energy and fleet electrification on many fronts and at large scales to achieve their goals. As more Wisconsin municipalities adopt higher renewable energy goals in response to the costly impacts of climate change on their communities and to reap the benefits of a clean energy economy, a decision on third-party financing will be either a green or a red light to the free market opportunities to help achieve them.  milwaukeeindependentjsonline

 Sherrie Gruder