Solar panel on a red roof

By Joe Kelly | Courthouse News

STEVENS POINT, Wis. (CN) — A Wisconsin-based clean energy group sued the state’s utilities regulator on Thursday demanding rule changes to make it easier and cheaper for Badger State consumers to access renewable energies in lieu of typical power sources.

The Midwest Renewable Energy Association – whose offices are in Milwaukee and Custer, a small community in central Wisconsin – says the Public Service Commission of Wisconsin, or PSC, is illegally regulating residents’ private energy consumption choices beyond its authority in ways that are preventing use of clean energy sources like solar power, which the group’s complaint calls “constitutionally as well as politically suspect.”

The PSC – which regulates energy utilities as well as telecommunication and broadband services – consists of three full-time commissioners appointed by the governor and confirmed by the state Senate for staggered six-year terms. Defendants in Thursday’s lawsuit are the agency and its current commissioners Rebecca Valcq, Ellen Nowak and Tyler Huebner.

The clean energy group, represented by David Bender with environmental law outfit Earthjustice’s Madison branch, claims in its lawsuit filed in Portage County Circuit Court that the PSC’s illegal conduct is twofold.

First, they say PSC guidance documents – policy statements which help individuals and businesses to best comply with the law – preclude certain financing options for solar panels on consumers’ rooves by regulating such private solar generation as if it were a monopoly public utility. This third-party financing option works like an auto lease by allowing customers to pay for a solar power system over time, which defrays what can be high up-front installation costs of such a system.

But by discouraging third-party financing, the group says the PSC is causing solar companies to get cold feet about pushing private clean energy generation in Wisconsin, which “lags other states that do not threaten to extinguish third-party financed solar by regulating private solar as if it were a monopoly public utility,” according to the complaint.

Nick Hylla, MREA’s executive director, on Thursday pointed to progress being made by Midwest neighbors like Iowa, Minnesota and Illinois as evidence that clean energy can fairly compete with traditional utilities.

“We’re not asking for favorable treatment. We’re asking for fair treatment. Clean energy alternatives to the monopoly utility model can stand on their own. We’re asking the [PSC] to stop holding them back,” Hylla said in a press release.

The same press release noted that consumers in the 28 states that don’t jam up third-party financing for renewables are using power purchase agreements that allow municipalities, schools, hospitals and other institutions to benefit from tax credits they cannot take advantage of themselves through lower monthly payments passed along to them by third-party owners.

Thursday’s lawsuit also accuses the PSC of unlawfully prohibiting households and businesses from turning down the juice during peak hours in exchange for resale compensation through wholesale power markets.  The MREA concedes that federal law allows states to enact laws blocking participation in wholesale power markets, but their complaint charges that the Wisconsin Legislature never authorized the PSC to do so and “in fact, the [PSC] has no authority to prohibit electricity consumers from reducing their usage” and barring participation in federal wholesale markets.

The clean energy group’s complaint requests that the court invalidate the PSC’s actions, reestablish the limits of its authority and “enjoin the agency from interfering with choices that the legislature left to individual businesses and to free market competition.”

While methodologies and data can vary, the MREA pointed to a study which acknowledged locally generated and consumed solar power as a potentially cost effective alternative to monopoly-owned utilities, in part by bypassing expensive transmission lines and generation capacity part and parcel with the traditional grid system. Another from the International Energy Agency in October 2020 shows increased demand for cheap solar and wind power, in conjunction with structural declines in fossil fuel sources such as coal, could pave an affordable path to a drastic decline in emissions within a couple decades.

The PSC declined to comment on the open litigation.