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PSC Issues Important Oral Decision on Third-Party Financing for Energy Projects in Wisconsin

December 5, 2022

At its December 1 Open Meeting, the Public Service Commission of Wisconsin (PSC) verbally issued a declaratory ruling on one of two dockets seeking to address financing arrangements for distributed energy resources (DER). In the docket, 9300-DR-106, Vote Solar asserted that one of its members wished to utilize financing for a DER system in Stevens Point (The Family Project) by signing a lease with a DER provider (North Wind), and that other Vote Solar members sought to install third-party financed systems on various locations via lease or power purchase agreement.

In a 2-1 vote (Commissioner Nowak dissenting), the Commission agreed to issue a declaratory ruling based on language drafted by Chairperson Valcq, which stated:

  • The Family Project host customer to be served by a DER owned by North Wind Renewable Energy Cooperative (“North Wind”) under the arrangement and the specific facts and circumstances described in this docket is not, by itself, “the public” within the meaning of Wis. Stat. § 196.01(5)(a).
  • The Family Project does not produce, transmit, deliver, or furnish power either directly or indirectly “to or for the public,” as that phrase as defined by statute and interpreted by the courts.
  • As such, North Wind, as owner of the Family Project, a project utilizing third-party financing for the installation of a DER system to provide energy to the customer, is not, by virtue of that arrangement alone, subject to regulation as a public utility pursuant to Wis. Stat. § 196.01(5)(a)

A declaratory ruling is an administrative action under Ch. 227 of the Wisconsin Statutes, and "[a] declaratory ruling shall bind the agency and all parties to the proceedings on the statement of facts alleged, unless it is altered or set aside by a court." Wis. Stat. § 227.41(1).

General practice has been for the PSC to issue a written order following a verbal decision in Open Meetings, so the Commission's final order on the declaratory ruling and the accompanying reasoning remain to be seen.

While this decision may have broader effects as to the wider availability of third-party financed solar or other DERs in the future, today's ruling is unlikely to be the end of the issue. There will likely be further legal action or potentially legislative action next year. The Commission's ruling may be appealed for review in circuit court, and persons "aggrieved" by the decision may also petition the agency for a rehearing.

Godfrey and Kahn will continue to monitor these dockets closely and keep our clients up to date on any further developments.

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