PSC Considers Second DER Financing Docket – Renewables

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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about your specific circumstances.