Wis. judge rejects demand charge for utility’s rooftop customers
In a verbal order, Dane County Circuit Court Judge Peter Anderson said there wasn’t sufficient evidence in the case record and sent the issue back to the Wisconsin Public Service Commission to draft a new order consistent with the ruling, said Tyler Huebner, executive director of RENEW Wisconsin.
The Madison-based renewable energy advocacy group and the Alliance for Solar Choice, a national solar advocacy group, filed a lawsuit in January appealing elements of the commission’s November decision.
The commission’s decision, set to take effect Jan. 1, would have required solar-owning customers to pay a $3.79 per kilowatt monthly fee. For a 5 kW solar installation, the charge would have totaled $227 a year and significantly eroded the economics of investing in a solar energy system, the groups said.
The new charge would have covered customers who applied for net metering tariffs after Oct. 7, 2014. Customers with existing tariffs would have been grandfathered.
“Renewable energy is growing in states all over the country, and states right next door to us like Iowa, Michigan, and Minnesota, and hopefully this decision will enable more of We Energies customers to take advantage of all the benefits of clean energy,” Huebner said in a statement.
Wisconsin became only the second state to impose a demand charge for distributed energy customers last year, following Arizona, according to renewable advocates. The Alliance for Solar Choice has since filed a lawsuit challenging a similar decision in Hawaii.
We Energies, meanwhile, said it is reviewing options in light of the judge’s ruling.
“We believe sufficient information was provided for the commission to include a demand charge on customer generation,” spokeswoman Cathy Schulze said in an email. “It should be noted that the judge did not remand or vacate any other portion of the commission’s order and other than the demand charge, the new tariffs for customer-owned generation will go into effect as planned Jan. 1.”
The demand charge was among several proposed changes that would have weakened the economics of distributed generation in We Energies’ service area (EnergyWire, Nov. 17, 2014). The commission also approved a significant increase in fixed charges for all customers and a reduction in rates for energy that customer-generators sell back to the grid.
Renewable advocates argued against the changes and urged the commission to conduct an independent study of the costs and benefits of distributed solar generation.
Ultimately, the commission sided with We Energies on most issues, including fixed charges, net metering and the need for a demand charge.
In its order, the majority concluded that “demand charges [for distributed energy customers] are reasonable and will allow [We Energies] a reasonable opportunity to recover standby generation and distribution costs that are not recovered by the facilities charge of the underlying rate.”
Wisconsin PSC Commissioner Eric Callisto, whose term expired earlier this year, dissented in the order. He also supported a broader study of the costs and benefits of distributed energy.
Callisto wrote in the dissent: “The commission would be well advised to just start over, do an actual cost analysis for DG customers, and develop tariffs with a proper evidentiary foundation and which do not unjustly harm certain customers simply because they choose to install distributed generation systems.”