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PSC Considers Second DER Financing Docket

January 17, 2023

At its Open Meeting on January 10, the Public Service Commission of Wisconsin (PSC) considered the second of two petitions for declaratory ruling related to financing arrangements for distributed energy resources (DERs). In Docket 9300-DR-105, Midwest Renewable Energy Association (MREA) sought a declaratory ruling from the PSC that entities which provide DER financing are not public utilities, and therefore not subject to PSC jurisdiction and regulation. MREA stated its intent to provide DER financing to multiple Wisconsin customers, but requested clarity from the PSC as to the extent of the PSC’s jurisdiction. MREA presented eleven specific attributes (“state of facts”) it said are common to its proposed DER financing arrangements, and argued that the PSC should issue a declaratory ruling that would apply to that state of facts, rather than a particular arrangement, and be binding on the PSC and any party involved in the proceeding. Opponents argued that MREA does in fact seek to act as a public utility, and by providing power “to or for the public,” MREA too must be subject to PSC regulation. Opponents also argued that approving MREA’s request would represent a change in state law, which requires action by the Legislature.

In a 2-1 vote (Commissioner Nowak dissenting), the Commission ordered the record to be reopened in order to gather more information from the applicant as to the specific circumstances of its request. Commissioners stated they did not believe the record contained sufficient information on which to make a decision. Without deciding the merits of the petition at this time, the Commission will allow new filings and additional information from the parties.

Similar to its December 2022 decision in Docket 9300-DR-106 related to DER financing , the PSC will next issue a written order following its verbal decision. However, unlike the prior docket, the Commission’s order will not be a decision as to the merits of the petition, but rather a procedural order to reopen the record and request additional information from the parties. Within the order to reopen, the Commission may outline certain questions or specific information it seeks from the parties. Alternatively, the Commission may direct the Administrative Law Judge to work with the parties in regards to the information needed.

Although the PSC’s prior decision in 9300-DR-106 directly addressed the question of whether the petitioner was a public utility, the PSC’s order in this docket, alongside individual comments from the Commissioners, seem to indicate that the PSC will remain engaged on the issue of third-party financed DERs and will likely take a case-by-case approach to future petitions. The Commission’s final order in 9300-DR-106, along with its reasoning, is still expected in the coming weeks. Comments during the discussion indicated that a concurrence and dissent would likely be filed with that order.

The PSC’s latest decision all but guarantees that third-party financing of DERs will remain a live issue for now. There will almost certainly be further legal action related to these dockets, as well as the potential that new dockets may be filed and opened in the future.

Godfrey and Kahn will continue to monitor this issue closely and keep our clients up to date on further developments.

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