September/October 2019 Issue
Also in this issue: Court Of Appeals Upholds Denial of Cell Tower Permit | Supreme Court Narrowly Affirms Discretionary Governmental Immunity
Local Governments Buy in to Large Scale Solar Projects
Richard Heinemann | 10.01.19
The City of Middleton and Middleton-Cross Plains Area School District are the first two local governmental units to purchase solar energy under a new large scale renewable energy tariff developed by Madison Gas & Electric (MGE). Known as the “Renewable Energy Rider” (RER), the MGE tariff allows large customers with multiple facilities to purchase renewable energy under separate power purchase agreements (PPAs) from dedicated facilities located nearby.
The Middleton PPAs were approved by the Public Service Commission of Wisconsin (PSCW) on July 25, 2019. Other local governments, including Dane County and the City of Madison, are expected to follow suit by seeking PSCW approval of similar PPAs with MGE under the RER in the coming months.
In contrast to existing roof top and community or shared solar programs, which have become wide spread in utility territory throughout Wisconsin largely to serve residential customers, the RER tariff allows utilities to design lower cost, large scale renewable energy projects without creating cross-subsidies that potentially increase energy costs for other non-tariff customers.
The Middleton project, for example, will generate 1.5 megawatts of solar power for the city and school district on property owned by the City of Middleton located near the Middleton airport. The Dane County project, which was formally approved by the county in early September, will generate 9 megawatts of solar power on land leased by MGE at the Dane County Regional Airport. The facility is expected to produce about 40% of the county’s energy needs.
The RER tariff enables local governments otherwise unable to take advantage of federal tax credits to directly finance dedicated renewable energy generation. Rather than issuing bonds or working with third party developers, local governments enter into long term PPAs with their utilities at a fixed price and offset their energy purchases under standard tariff rates. Excess energy generated by the resource, as well as associated capacity, are compensated by the utility at market rates. Because the RER allows multiple meters to be aggregated under the PPA, eligible customers are not restricted by the size of individual buildings, meaning that the projects can be scaled up.
The PSCW first approved MGE’s program in 2017 for up to 25 megawatts. Since then, the PSCW has approved 150 MW RER programs for both We Energies and Alliant Energy. Hence it is likely that an increasing number of local governments will be able to develop cost-effective renewable energy resources and meet clean energy goals in partnership with their incumbent utilities.
— Richard A. Heinemann
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