This week, the RENEW Wisconsin policy team submitted testimony calling for no change to how Rice Lake Utilities (RLU) compensates customers for the solar energy they produce. This testimony is in opposition to what RLU has suggested for their net energy metering (NEM) policy, which would be a reduction in compensation for solar customers.

In this case, the Public Service Commission of Wisconsin (PSC) will consider a NEM formula for systems at 20 kilowatts (kW) and below, and a formula for systems between 20 and 100 kW. Systems that are 20 kW or below are typically residential rooftop arrays, whereas the larger ones are often on businesses or municipal buildings. RLU currently has three customers with systems above 20 kW, all of which are schools.

Although Rice Lake Utilities is a smaller utility in northwestern Wisconsin and does not have many customers with solar, what they have proposed could change the precedent at the PSC. RENEW has decided to intervene and provide testimony to prevent the potential for statewide changes to NEM policy.

RENEW’s policy team provided evidence to the PSC in support of maintaining the status quo for both larger and smaller solar systems. We also shared potential alternatives for how RLU could transition away from the status quo should the PSC decide to allow a change to NEM benefits. These alternatives are more in line with how utility-avoided costs for Wisconsin utilities are calculated.

Utility-avoided costs are the cost an electric utility pays to generate or purchase power. This could be described as — an avoided expense that a utility would have paid by generating themselves or purchasing it from a third party, had it not come from the customer’s solar array.

RENEW feels that before the PSC decides this case, they should consider the future of municipally-owned utility payment structures for NEM. RLU’s net monthly excess generation formula for NEM currently points to their base cost of power as its avoided cost reference, and that reference remains financially viable for RLU, as well as most Wisconsin utilities. With that in mind, we are concerned that the PSC’s decision in this case might set a precedent for other similar cases.

RENEW is hopeful that the PSC will agree that it is best to leave the current NEM pay structures in place until their Value of Solar Study and NEM investigation concludes.

Next Steps for RENEW

The RLU case is ongoing, and RENEW will have the opportunity to submit rebuttal testimony and participate in a party hearing this June. We will continue to advocate for fair payments to utility customers with solar arrays. There will also be an opportunity for the public to comment on the case before a decision from the PSC in July.

On Wednesday, RENEW Wisconsin’s Policy team submitted comments to the Public Service Commission (PSC) in response to the Lawrence Berkeley National Laboratory’s (LBNL) review of the Value of Solar Studies (VoSS). These comments represent a critical step toward shaping the future of solar energy in Wisconsin, with several organizations, including 350.org, the Wisconsin Environmental Initiative, Northwind Solar, and Appleton Solar, joining RENEW in support of these recommendations. Other organizations and utilities also submitted separate comments.

The context for this study and the review stems from rate case proceedings in the fall of 2023 involving Alliant Energy and Madison Gas & Electric (MGE). These rate cases included proposals to reduce or eliminate the current Net Energy Metering (NEM) policies for solar customers in these two utility territories. If approved, such changes would have reduced the financial benefits for consumers with solar arrays at their homes or businesses. These proposals were ultimately rejected by the Public Service Commission of Wisconsin (PSC), and the Commission agreed to gather more information in a separate statewide investigatory docket. Last year, the PSC began working with Berkeley Lab and other national lab staff on a VoSS to better understand the full benefits of distributed solar energy to the grid and the economy.

RENEW’s comments offer key recommendations to strengthen solar policy in Wisconsin, ensuring it supports sustainable growth and a fair, data-driven approach to valuing solar energy. Here are the main points highlighted in RENEW’s submission:

1. Gather utility data required to estimate solar adoption rates

Accurate and comprehensive data are essential for determining solar energy adoption rates across Wisconsin. RENEW recommends that the PSC gather data from utilities, formulate methodologies, and report on solar adoption rates. This will enable policymakers to make informed decisions on future solar policies.

2. Decide whether an independent VoSS is appropriate for Wisconsin at this time

Before pursuing an independent Value of Solar Study (VoSS), RENEW recommends that the PSC assess whether such a study is appropriate for Wisconsin at this time. This evaluation should consider the unique circumstances of the state, including its zero-carbon energy goals and economic landscape.

3. Create more robust and consistent NEM policy throughout Wisconsin

RENEW advocates for the development of more robust and consistent Net Energy Metering (NEM) policies across the state. NEM is a cornerstone of Wisconsin’s solar energy development, and strengthening this policy will help ensure fairness and consistency for solar customers.

4. When appropriate, establish a VoSS stakeholder process and methodology to consider all values presented in the LBNL VOSS Review

When the time is right, RENEW recommends adopting a fair, transparent, and 

stakeholder-driven approach to a VoSS. This process should consider all the values outlined in the LBNL VoSS Review (economic, environmental, and grid-related) to ensure a comprehensive understanding of solar’s full benefits.

5. Contract with a third-party VoSS consultant using a stakeholder-driven review process

To ensure a fair and credible outcome, RENEW urges the PSC to engage an independent consultant to assist in leading the Value of Solar analysis. An experienced third-party expert can provide objective insight and guide the process in a way that respects the input of all participants, including utilities, customers, advocates, and other stakeholders.

6. Establish either a statewide or utility-specific VoSS driven by data

RENEW supports the creation of a statewide or utility-specific VoSS that is grounded in data and accurately reflects the value solar brings to the grid. This study should be informed by the utility data and stakeholder feedback gathered throughout the process.

7. Establish a glide path towards VoS tariffs only when NEM solar adoption rates increase to 10% in utility service territories

Finally, RENEW recommends a gradual transition to Value of Solar (VoS) tariffs, with a clear glide path based on solar adoption rates. Specifically, the transition to VoS tariffs should occur only when solar adoption reaches 10% in utility service territories.

Next Steps: Stay Tuned for Updates!

At this time, the PSC has not announced the next steps as the investigation remains open. However, the PSC will likely take up a verbal decision on the next steps soon. We’ll keep a close eye on the process and share any important updates with you as they happen.

Stay tuned for further developments as we continue to push for policies that support a clean, sustainable, and equitable energy future for Wisconsin.

A Brief History on Recent Net Metering Decisions at the State Level

In 2023, Wisconsin utilities proposed to dramatically change Net Energy Metering (NEM) policies in the areas they provide energy. Such changes would have reduced the financial benefits for consumers with solar arrays at their homes or businesses. These proposals were ultimately rejected by the Public Service Commission of Wisconsin (PSC), however, the Commission agreed to gather more information in a separate statewide investigatory docket. RENEW staff wrote a blog on this topic last November.

This past March, the PSC reopened an existing investigation into parallel generation, also defined as consumer-generated electricity, to direct the future of NEM policy for the state of Wisconsin. Commission staff also issued a memo for comment on issues related to NEM, and requested information and analysis on these issues, including how Wisconsin could approach a potential Value of Solar Study (VOSS). Along with several other organizations, RENEW submitted comments to the PSC with regard to how the PSC should approach a VOSS and other analytical aspects of NEM policy.

Explaining the PSC’s Recent Decision on Net Energy Metering Policy

After gathering comments and information on VOSS, on September 26 Commission staff posted a memo outlining potential next steps, and the Commission quickly discussed and made a couple of important decisions. During the open meeting, the Commission announced that Commission staff have been working with Berkeley Lab and other national lab staff to conduct a nationwide VOSS literature review. The Commission decided to take no action until more information is gathered.

The Commission essentially decided to:

1) Wait until this VOSS literature review is complete

2) Post VOSS literature review for public comment

3) Decide what the next actionable steps are in the investigation

If interested, you can watch the YouTube archive of this meeting, with the NEM investigation discussion starting at the 3:20 mark.

Given the need to gather more information, RENEW believes that this was a good decision by the Commission. It shows that the PSC will use a deliberate process in this investigation and associated analyses, and is not interested in making immediate changes to NEM policy. RENEW staff are keeping an eye out for the results of the VOSS literature review and look forward to commenting and suggesting next steps for the PSC to consider.

Recent PSC Decision on Parallel Generation Buyback Rates

While the Commission further investigates NEM policy, the agency has also been actively revising utility pricing for large solar systems sited by businesses for their own use. The price a utility pays for energy generation beyond a customer’s needs is listed in its parallel generation buyback rates for systems above NEM thresholds.* While the Commission has already revised buyback rates for Wisconsin’s five major investor-owned utilities, it has also begun to consider municipal utility-proposed revisions. RENEW staff wrote a blog regarding Sturgeon Bay Utility’s proposed parallel generation rate revisions this past May.

During an open meeting discussion on October 10, the Commission considered Sturgeon Bay Utilities’ (SBU) proposal to revise its buyback rates. The Commission decided that it needed more information before revising SBU’s buyback rates, and requested that Commission staff reopen the docket to gather more information and analysis through an extended proceeding. The Commission’s decision on SBU’s proposed change could have sweeping impacts across the state as SBU is part of WPPI Energy, which has many municipal electric utility members in Wisconsin. WPPI has stated that it would like to revise all its municipal utilities’ parallel generation buyback rates in line with the Commission’s decision in the SBU case.

Next Steps on NEM and Parallel Generation Buyback Rates

In the coming months, RENEW expects several important Commission decisions in both the ongoing NEM investigation and individual utility parallel generation cases. RENEW staff will follow upcoming Commission developments closely and will directly participate with witness testimony and public comments. You can follow these issues as well, and make your voice heard when public comment opportunities arise. Sign up for RENEW updates and action alerts so that you can provide timely input on these important issues.

*NEM thresholds vary across Wisconsin utilities. WE Energies has a 300-kilowatt (kW) threshold, NSPW and MGE have 100 kW thresholds, WPL and WPS have 20 kW thresholds, and all other Wisconsin utilities regulated by the PSC have a 20-kW threshold.