How much should data centers pay for the massive amounts of new power infrastructure they require? Wisconsin’s largest utility, We Energies, has offered its answer to that question in what is the first major proposal before state regulators on the issue.

Under the proposal, currently open for public comment, data centers would pay most or all of the price to construct new power plants or renewables needed to serve them, and the utility says the benefits that other customers receive would outweigh any costs they shoulder for building and running this new generation.

But environmental and consumer advocates fear the utility’s plan will actually saddle customers with payments for generation, including polluting natural gas plants, that wouldn’t otherwise be needed.

States nationwide face similar dilemmas around data centers’ energy use. But who pays for the new power plants and transmission is an especially controversial question in Wisconsin and other ​“vertically integrated” energy markets, where utilities charge their customers for the investments they make in such infrastructure — with a profit, called ​“rate of return,” baked in. In states with competitive energy markets, like Illinois, by contrast, utilities buy power on the open market and don’t make a rate of return on building generation.

Although six big data center projects are underway in Wisconsin, the state has no laws governing how the computing facilities get their power.

Lawmakers in the Republican-controlled state Legislature are debating two bills this session. The Assembly passed the GOP-backed proposal on Jan. 20, which, even if it makes it through the Senate, is unlikely to get Democratic Gov. Tony Evers’ signature. According to the Milwaukee Journal Sentinel, a spokesperson for Evers said on Jan. 14 that ​“the one thing environmentalists, labor, utilities, and data center companies can all agree on right now is how bad Republican lawmakers’ data center bill is.” Until a measure is passed, individual decisions by the state Public Service Commission will determine how utilities supply energy to data centers.

The We Energies case is high stakes because two data centers proposed in the utility’s southeast Wisconsin territory promise to double its total demand. One of those facilities is a Microsoft complex that the tech giant says will be ​“the world’s most powerful AI datacenter.”

The utility’s proposal could also be precedent-setting as other Wisconsin utilities plan for data centers, said Bryan Rogers, environmental justice director for the Milwaukee community organization Walnut Way Conservation Corp.

“As goes We Energies,” Rogers said, ​“so goes the rest of the state.”

Building new power

We Energies’ proposal — first filed last spring — would let data centers choose between two options for paying for new generation infrastructure to ensure the utility has enough capacity to meet grid operator requirements that the added electricity demand doesn’t interfere with reliability.

In both cases, the utility will acquire that capacity through ​“bespoke resources” built specifically for the data center. The computing facilities technically would not get their energy directly from these power plants or renewables but rather from We Energies at market prices.

Under the first option, called ​“full benefits,” data centers would pay the full price of constructing, maintaining and operating the new generation and would cover the profit guaranteed to We Energies. The data centers would also get revenue from the sale of the electricity on the market as well as from renewable energy credits for solar and wind arrays; renewable energy credits are basically certificates that can be sold to other entities looking to meet sustainability goals.

The second option, called ​“capacity only,” would have data centers paying 75% of the cost of building the generation. Other customers would pick up the tab for the remaining 25% of the construction and pay for fuel and other costs. In this case, both data centers and other customers would pay for the profit guaranteed to We Energies as part of the project, though the data centers would pay a different — and possibly lower — rate than other customers.

Developers of both data centers being built in We Energies’ territory support the utility’s proposal, saying in testimony that it will help them get online faster and sufficiently protect other customers from unfair costs.

Consumer and environmental advocacy groups, however, are pushing back on the capacity-only option, arguing that it is unfair to make regular customers pay a quarter of the price for building new generation that might not have been necessary without data centers in the picture.

“Nobody asked for this,” said Rogers of Walnut Way. The Sierra Club told regulators to scrap the capacity-only option. The advocacy group Clean Wisconsin similarly opposes that option, as noted in testimony to regulators.

But We Energies says everyone will benefit from building more power sources.

“These capacity-only plants will serve all of our customers, especially on the hottest and coldest days of the year,” We Energies spokesperson Brendan Conway wrote in an email. ​“We expect that customers will receive benefits from these plants that exceed the costs that are proposed to be allocated to them.”

We Energies has offered no proof of this promise, according to testimony filed by the Wisconsin Industrial Energy Group, which represents factories and other large operations. The trade association’s energy adviser, Jeffry Pollock, told regulators that the utility’s own modeling of the capacity-only approach showed scenarios in which the costs borne by customers outweigh the benefits to them.

Clean energy is another sticking point. Clean Wisconsin and the Environmental Law and Policy Center want the utility’s plan to more explicitly encourage data centers to meet capacity requirements in part through their own on-site renewables and to participate in demand-response programs. Customers enrolled in such programs agree to dial down energy use during moments of peak demand, reducing the need for as many new power plants.

“It’s really important to make sure that this tariff contemplates as much clean energy and avoids using as much energy as possible, so we can avoid that incremental fossil fuel build-out that would otherwise potentially be needed to meet this demand,” said Clean Wisconsin staff attorney Brett Korte.

And advocates want the utility to include smaller data centers in its proposal, which in its current form would apply only to data centers requiring 500 megawatts of power or more.

We Energies’ response to stakeholder testimony was due on Jan. 28, and the utility and regulators will also consider public comments that are being submitted. After that, the regulatory commission may hold hearings, and advocates can file additional briefs. Eventually, the utility will reach an agreement with commissioners on how to charge data centers.

Risky business

Looming large over this debate is the mounting concern that the artificial intelligence boom is a bubble. If that bubble pops, it could mean far less power demand from data centers than utilities currently expect.

In November, We Energies announced plans to build almost 3 gigawatts of natural gas plants, renewables and battery storage. Conway said much of this new construction will be paid for by data centers as their bespoke resources.

But some worry that utility customers could be left paying too much for these investments if data centers don’t materialize or don’t use as much energy as predicted. Wisconsin consumers are already on the hook for almost $1 billion for ​“stranded assets,” mostly expensive coal plants that closed earlier than originally planned, as Wisconsin Watch recently tabulated.

“The reason we bring up the worst-case scenario is it’s not just theoretical,” said Tom Content, executive director of the Citizens Utility Board of Wisconsin, the state’s primary consumer advocacy organization. ​“There’s been so many headlines about the AI bubble. Will business plans change? Will new AI chips require data centers to use a lot less energy?”

We Energies’ proposal has data centers paying promised costs even if they go out of business or otherwise prematurely curtail their demand. But developers do not have to put up collateral for this purpose if they have a positive credit rating. That means if such data center companies went bankrupt or otherwise couldn’t meet their financial obligations, utility customers may end up paying the bill.

Steven Kihm, the Citizens Utility Board’s regulatory strategist and chief economist, gave examples of companies that had stellar credit until they didn’t, in testimony to regulators. The company that made BlackBerry handheld devices saw its stock skyrocket in the mid-2000s, only to lose most of its value with the rise of smartphones, he noted. Energy company Enron, meanwhile, had a top credit rating until a month before its 2001 collapse, Kihm warned. He advised regulators that data center developers should have to put up adequate collateral regardless of their credit rating.

The Wisconsin Industrial Energy Group echoed concerns about risk if data centers struggle financially.

“The unprecedented growth in capital spending will subject (We Energies) to elevated financial and credit risks,” Pollock told regulators. ​“Customers will ultimately provide the financial backstop if (the utility) is unable to fully enforce the terms” of its tariff.

Jeremy Fisher, Sierra Club’s principal adviser on climate and energy, equated the risk to co-signing ​“a loan on a mansion next door, with just the vague assurance that the neighbors will almost certainly be able to cover their loan.”

A version of this article was first published by Canary Media.

Wisconsin debates how to pay for the power-hungry AI boom is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

A debate playing out in Wisconsin underscores just how challenging it is for U.S. states to set policies governing data centers, even as tech giants speed ahead with plans to build the energy-gobbling computing facilities.

Wisconsin’s state legislators are eager to pass a law that prevents the data center boom from spiking households’ energy bills. The problem is, Democrats and Republicans have starkly different visions for what that measure should look like — especially when it comes to rules around hyperscalers’ renewable energy use.

Republican state legislators this month introduced a bill that orders utility regulators to ensure that regular customers do not pay any costs of constructing the electric infrastructure needed to serve data centers. It also requires data centers to recycle the water used to cool servers and to restore the site if construction isn’t completed.

Those are key protections sought by decision-makers across the political spectrum as opposition to data centers in Wisconsin and beyond reaches a fever pitch.

But the bill will likely be doomed by a ​“poison pill,” as consumer advocates and manufacturing industry sources describe it, that says all renewable energy used to power data centers must be built on-site.

Republican lawmakers argue this provision is necessary to prevent new solar farms and transmission lines from sprawling across the state.

“Sometimes these data centers attempt to say that they are environmentally friendly by saying we’re going to have all renewable electricity, but that requires lots of transmission from other places, either around the state or around the region,” said state Assembly Speaker Robin Vos, a Republican, at a press conference. ​“So this bill actually says that if you are going to do renewable energy, and we would encourage them to do that, it has to be done on-site.”

This effectively means that data centers would have to rely largely on fossil fuels, given the limited size of their sites and the relative paucity of renewable energy in the state thus far.

Gov. Tony Evers and his fellow Democrats in the state Legislature are unlikely to agree to this scenario, Wisconsin consumer and clean energy advocates say.

Democrats introduced their own data center bill late last year, some of which aligns closely with the Republican measure: The Democratic bill would similarly block utilities from shifting data center costs onto residents, by creating a separate billing class for very large energy customers. It would require that data centers pay an annual fee to fund public benefits such as energy upgrades for low-income households and to support the state’s green bank.

But that proposal may also prove impossible to pass, advocates say, because of its mandate that data centers get 70% of their energy from renewables in order to qualify for state tax breaks and a requirement that workers constructing and overhauling data centers be paid a prevailing wage for the area. This labor provision is deeply polarizing in Wisconsin. Former Republican Gov. Scott Walker and lawmakers in his party famously repealed the state’s prevailing wage law for public construction projects in 2017, and multiple Democratic efforts to reinstate it have failed.

The result of the political division around renewables and other issues is that Wisconsin may accomplish little around data center regulation in the near term.

“If we could combine the two and make it a better bill, that would be ideal,” said Beata Wierzba, government affairs director for the nonprofit clean energy advocacy group Renew Wisconsin. ​“It’s hard to see where this will go ultimately. I don’t foresee the Democratic bill passing, and I also don’t know how the governor can sign the Republican bill.”

Urgent need

Wisconsin’s consumer and clean energy advocates are frustrated about the absence of promising legislation at a time when they say regulation of data centers is badly needed. The environmental advocacy group Clean Wisconsin has received thousands of signatures on a petition calling for a moratorium on data center approvals until a comprehensive state plan is in place.

At least five new major data centers are planned in the state, which is considered attractive for the industry because of its ample fresh water and open land, skilled workers, robust electric grid, and generous tax breaks. The Wisconsin Policy Forum estimated that data centers will drive the state’s peak electricity demand to 17.1 gigawatts by 2030, up from 14.6 gigawatts in 2024.

Absent special treatment for data centers, utilities will pass the costs on to customers for the new power needed to meet the rising demand.

Two Wisconsin utilities — We Energies and Alliant Energy — are proposing special tariffs that would determine the rates they charge data centers. Allowing utilities in the same state to have different policies for serving data centers could lead to these projects being located wherever utilities offer them the cheapest rates and result in a patchwork of regulations and protections, consumer advocates argue. They say legislation should be passed soon, to standardize the process and enshrine protections statewide before utilities move forward on their own.

Some of Wisconsin’s neighbors have already taken that step, said Tom Content, executive director of Wisconsin’s Citizens Utility Board, a consumer advocacy group.

He pointed to Minnesota, where a law passed in June mandates that data centers and other customers be placed in separate categories for utility billing, eliminating the risk of data center costs being passed on to residents. The Minnesota law also protects customers from paying for ​“stranded costs” if a data center doesn’t end up needing the infrastructure that was built to serve it.

Ohio, by contrast, provides a cautionary tale, Content said. After state regulators enshrined provisions that protected customers of the utility AEP Ohio from data center costs, developers simply looked elsewhere in the state.

“Much of the data center demand in Ohio shifted to a different utility where no such protections were in place,” Content said. ​“We’re in a race to the bottom. Wisconsin needs a statewide framework to help guide data center development and ensure customers who aren’t tech companies don’t pick up the tab for these massive projects.”

Clean energy quandary

Limiting clean energy construction to data center sites could be especially problematic as data center developers often demand renewable energy to meet their own sustainability goals.

For example, the Lighthouse data center — being developed by OpenAI, Oracle and Vantage near Milwaukee — will subsidize 179 megawatts of new wind generation, 1,266 megawatts of new solar generation and 505 megawatts of new battery storage capacity, according to testimony from one of the developers in the We Energies tariff proceeding.

But Lighthouse covers 672 acres. It takes about 5 to 7 acres of land to generate 1 megawatt of solar energy, meaning the whole campus would have room for only about a tenth of the solar the developers promise.

We Energies is already developing the renewable generation intended to serve that data center, a utility spokesperson said, but the numbers show how future clean energy could be stymied by the on-site requirement.

“It’s unclear why lawmakers would want to discriminate against the two cheapest ways to produce energy in our state at a time when energy bills are already on the rise,” said Chelsea Chandler, the climate, energy and air program director at Clean Wisconsin.

Renew Wisconsin’s Wierzba said the Democrats’ 70% renewable energy mandate for receiving tax breaks could likewise be problematic for tech firms.

“We want data centers to use renewable energy, and companies I’m aware of prefer that,” she said. ​“The way the Republican bill addresses that is negative and would deter that possibility. But the Democratic bill almost goes too far — 70%. That’s a prescribed amount, too much of a hook and not enough carrot.”

Alex Beld, Renew Wisconsin’s communications director, said the Republican bill might have a hope of passing if the poison pill about on-site renewable energy were removed.

“I don’t know if there’s a will on the Republican side to remove that piece,” he said. ​“One thing is obvious: No matter what side of the political aisle you’re on, there are concerns about the rapid development of these data centers. Some kind of legislation should be put forward that will pass.”

Bryan Rogers, environmental director of the Milwaukee community organization Walnut Way Conservation Corp, said elected officials shouldn’t be afraid to demand more of data centers, including more public benefit payments.

“We know what the data centers want and how fast they want it,” he said. ​“We can extract more concessions from data centers. They should be paying not just their full way — bringing their own energy, covering transmission, generation. We also know there are going to be social impacts, public health, environmental impacts. Someone has to be responsible for that.”

Utility representatives expressed less urgency around legislation.

William Skewes, executive director of the Wisconsin Utilities Association, said the trade group ​“appreciates and agrees with the desire by policymakers and customers to make sure they’re not paying for costs that they did not cause.”

But, he said, the state’s utility regulators already do ​“a very thorough job reviewing cases and making sure that doesn’t happen. Wisconsin utilities are aligned in the view that data centers must pay their full share of costs.”

If Wisconsin legislators do manage to pass data center legislation this session, it will head to the desk of Evers. The governor is a longtime advocate for renewables, creating the state’s first clean energy plan in 2022, and he has expressed support for attracting more data centers to Wisconsin.

“I personally believe that we need to make sure that we’re creating jobs for the future in the state of Wisconsin,” Evers said at a press conference, according to the Milwaukee Journal Sentinel. ​“But we have to balance that with my belief that we have to keep climate change in check. I think that can happen.”

A version of this article was first published by Canary Media.

Disputes over clean energy may doom Wisconsin data center bills is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

On a dry, rocky patch of his family’s farm in Door County, Wisconsin, Dave Klevesahl grows wildflowers. But he has a vision for how to squeeze more value out of the plot: lease it to a company that wants to build a community solar array.

Unfortunately for Klevesahl, that is unlikely to happen under current state law. In Wisconsin, only utilities are allowed to develop such shared solar installations, which let households and businesses that can’t put panels on their own property access renewable energy via subscriptions.

Farmers, solar advocates and legislators from both parties are trying to remove these restrictions through Senate Bill 559, which would allow the limited development of community solar by entities other than utilities.

Wisconsin lawmakers considered similar proposals in the 2021-22 and 2023-24 legislative sessions, with support from trade groups representing real estate agents, farmers, grocers, and retailers. But those bipartisan efforts failed in the face of opposition from the state’s powerful utilities and labor unions.

Community solar supporters are hoping for a different outcome this legislative session, which ends in March. But while the new bill, introduced Oct. 24, includes changes meant to placate utilities, the companies still firmly oppose it.

“I don’t really understand why anybody wouldn’t want community solar,” said Klevesahl, whose wife’s family has been farming their land for generations. In addition to leasing his land for an installation, he would like to subscribe to community solar, which typically saves participants money on their energy bills. 

Some Wisconsin utilities do offer their own community solar programs. But they are too small to meet the demand for community solar, advocates say.

Utilities push back on shared solar 

Around 20 states and Washington, D.C., have community solar programs that allow non-utility ownership of arrays. The majority of those states, including Wisconsin’s neighbor Illinois, have deregulated energy markets, in which the utilities that distribute electricity do not generate it.

In states with ​“vertically integrated” energy markets, like Wisconsin, utilities serve as regulated monopolies, both generating and distributing power. That means legislation is necessary to specify that other companies are also allowed to generate and sell power from community solar. Some vertically integrated states, including Minnesota, have passed such laws.

But monopoly utilities in those jurisdictions have consistently opposed community solar developed by third parties. Minnesota utility Xcel Energy, for example, supported terminating the state’s community solar program during an unsuccessful effort by some lawmakers last summer to end it.

The Wisconsin utilities We Energies and Madison Gas and Electric, according to their spokespeople, are concerned that customers who don’t subscribe to community solar will end up subsidizing costs for those who do. The utilities argue that because community solar subscribers have lower energy bills, they contribute less money for grid maintenance and construction, meaning that other customers must pay more to make up the difference. Clean-energy advocates, for their part, say this ​“cost shift” argument ignores research showing that the systemwide benefits of distributed energy like community solar can outweigh the expense.

The Wisconsin bill would also require utilities to buy power from community solar arrays that don’t have enough subscribers.

“This bill is being marketed as a ​‘fair’ solution to advance renewables. It’s the opposite,” said We Energies spokesperson Brendan Conway. ​“It would force our customers to pay higher electricity costs by having them subsidize developers who want profit from a no-risk solar project. Under this bill, the developers avoid any risk. The costs of their projects will shift to and be paid for by all of our ​‘non-subscribing’ customers.”

The power generated by community solar ultimately goes onto the utility’s grid, reducing the amount of electricity the utility needs to provide. But Conway said it’s not the most efficient way to meet overall demand.

“These projects would not be something we would plan for or need, so our customers would be paying for unneeded energy that benefits a very few,” he said. ​“Also, these credits are guaranteed by our other customers even if solar costs drop or grid needs change.”

Advocates in Wisconsin hope they can address such concerns and convince utilities to support community solar owned by third parties.

Beata Wierzba, government affairs director of the clean-power advocacy organization Renew Wisconsin, said her group and others ​“had an opportunity to talk with the utilities over the course of several months, trying to negotiate some language they could live with.”

“There were some exchanges where utilities gave us a dozen things that were problematic for them, and the coalition addressed them by making changes to the draft” of the bill, Wierzba said.

The spokespeople for We Energies and Madison Gas and Electric did not respond to questions about such conversations.

A small-scale start 

To assuage utilities’ concerns, the bill allows third-party companies to build community solar only for the next decade. The legislation also sets a statewide cap for community solar of 1.75 gigawatts, with limits for each of the five major investor-owned utilities’ territories proportionate to each utility’s total number of customers.

Community solar arrays would be limited to 5 megawatts, with exceptions for rooftops, brownfields and other industrial sites, where 20 megawatts can be built.

No subscriber would be allowed to buy more than 40% of the output from a single community solar array, and 60% of the subscriptions must be for 40 kilowatts of capacity or less, the bill says. This is meant to prevent one large customer — like a big-box store or factory — from buying the majority of the power and excluding others from taking advantage of the limited community solar capacity.

Customers who subscribe to community solar would still have to pay at least $20 a month to their utility for service. The bill also contains what Wierzba called an ​“off-ramp”: After four years, the Public Service Commission of Wisconsin would study how the program is working and submit a report to the Legislature, which could pass a new law to address any problems.

“The bill is almost like a small pilot project — it’s not like you’re opening the door and letting everyone come in,” said Wierzba. ​“You have a limit on how it can function, how many people can sign up.”

Broad support for community solar

In Wisconsin, as in other states, developers hoping to build utility-scale solar farms on agricultural land face serious pushback. The Trump administration canceled federal incentives for solar arrays on farms this summer, with U.S. Department of Agriculture Secretary Brooke Rollins announcing, ​“USDA will no longer fund taxpayer dollars for solar panels on productive farmland.”

But Wisconsin farmers have argued that community solar can actually help keep agricultural land in production by providing an extra source of revenue. The Wisconsin Farm Bureau Federation has yet to weigh in on this year’s bill, but it supported previously proposed community solar legislation.

The bill calls for state regulators to come up with rules for community solar developers that would likely require dual use — meaning that crops or pollinator habitats are planted under and around the panels or that animals graze on the land. These increasingly common practices are known as agrivoltaics.

The bill would let local zoning bodies — rather than the state’s Public Service Commission — decide whether to permit a community solar installation.

Utility-scale solar farms, by contrast, are permitted at the state level, which can leave ​“locals feeling like they are not in control of their future,” said Matt Hargarten, vice president of government and public affairs for the Coalition for Community Solar Access. ​“This offers an alternative that is really welcome. If a town doesn’t want this to be there, it won’t be there.”

A 5-megawatt array typically covers 20 to 30 acres of land, whereas utility-scale solar farms are often hundreds of megawatts and span thousands of acres.

“You don’t need to upgrade the transmission systems with these small solar farms because a 30-acre solar farm can backfeed into a substation that’s already there,” noted Klevesahl, a retired electrical engineer. ​“And then you’re using the power locally, and it’s clean power. Bottom line is, I just think it’s the right thing to do.” 

A version of this article was first published by Canary Media.

Wisconsin lawmakers look to break utility grip on community solar is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

A new contract between Kalamazoo, Michigan, and utility Consumers Energy signals a change in direction for the city’s clean energy strategy as it seeks to become carbon neutral by 2040. 

Solar was seen as a pillar of the city’s plans when it declared a climate emergency in 2019 and set a goal of zeroing out carbon emissions by 2040. After spending years exploring its options, though, the Michigan city is tempering a vision for rooftop solar in favor of large, more distant solar projects built and owned by the utility. It’s not alone either, with Grand Rapids, Milwaukee, Muskegon and other cities taking a similar approach.

“Folks want to see solar panels on parking lots and buildings, but there’s no way as a city we can accomplish our net-zero buildings just putting solar panels on a roof,” said Justin Gish, Kalamazoo’s sustainability planner. “Working with the utility seemed to make the most sense.” 

Initially there was skepticism, Gish said — “environmentalists tend to not trust utilities and large corporate entities” — but the math just didn’t work out for going it alone with rooftop solar.

The city’s largest power user, the wastewater treatment pumping station, has a roof of only 225 square feet. Kalamazoo’s largest city-owned roof, at the public service station, is 26,000 square feet. Spending an estimated $750,000 to cover that with solar would only provide 14% of the power the city uses annually — a financial “non-starter,” he said.

So the city decided to partner with Consumers Energy, joining a solar subscription program wherein Kalamazoo will tell Consumers how much solar energy it wants, starting in 2028, and the utility will use funds from its subscription fee to construct new solar farms, like a 250-megawatt project Consumers is building in Muskegon. 

Under the 20-year contract, Kalamazoo will pay a set rate of 15.8 cents per kilowatt-hour (kWh) — 6.4 cents more than what it currently pays — for 43 million kWh of solar power per year. If electricity market rates rise, the city will save money, and Kalamazoo receives Renewable Energy Credits (RECs) to help meet its energy goals. 

The subscription is expected to eliminate about 80% of Kalamazoo’s emissions from electricity, Gish said. The electricity used to power streetlights and traffic signals couldn’t be covered since it is not metered. As the city acquires more electric vehicles — it currently has two — electricity demand may increase, but city leaders hope to offset any increases by improving energy efficiency of city buildings.  

Consumers Energy spokesperson Matt Johnson said the company relies “in part” on funds from customers specifically to build solar and considers it a better deal for cities than building it themselves, “which would be more costly for them, and they have to do their own maintenance.”  

“We can do it in a more cost-effective way, we maintain it, they’re helping us fund it and do it in the right way, and those benefits get passed on to arguably everybody,” Johnson said. 

Grand Rapids, Michigan, joined the subscription program at the same time as Kalamazoo. Corporate customers including 7-Eleven, Walmart and General Motors are part of the same Consumers Energy solar subscription program, as is the state of Michigan.

Costs and benefits

“There’s a growing movement of cities trying to figure out solar — ‘Yes we want to do this, it could save us money over time, but the cost is prohibitive,’” said John Farrell, co-director of the Institute for Local Self-Reliance. 

Until the Inflation Reduction Act, cities couldn’t directly access federal tax credits. The direct-pay incentives under the IRA have simplified financing, Farrell said, but cities still face other financial and logistical barriers, such as whether they have sufficient rooftop space.  

Advocates acknowledge deals with utilities may be the most practical way for budget-strapped cities to move the needle on clean energy, but they emphasize that cities should also strive to develop their own solar and question whether utilities should charge more for clean power that is increasingly a cheaper option than fossil fuels.

“Our position is rooftop and distributed generation is best — it’s best for the customers, in this case the cities; it’s best for the grid because you’re putting those resources directly on the grid where it’s needed most; and it’s best for the planet because it can deploy a lot faster,” said John Delurey, Midwest deputy director of the advocacy group Vote Solar. “I believe customers in general and perhaps cities in particular should exhaust all resources and opportunities for distributed generation before they start to explore utility-scale resources. It’s the lowest hanging fruit and very likely to provide the most bang for their buck.”

Utility-scale solar is more cost-effective per kilowatt, but Delurey notes that when a public building is large enough for solar, “you are putting that generation directly on load, you’re consuming onsite. Anything that is concurrent consumption or paired with a battery, you are getting the full retail value of that energy. That is a feature you can’t really beat no matter how good the contract is with some utility-scale projects that are farther away.”

Delurey also noted that Michigan law mandates all energy be from clean sources by 2040; and 50% by 2030. That means Consumers needs to be building or buying renewable power, whether or not customers pay extra for it. 

“So there are diminishing returns (to a subscription deal) at that point,” Delurey said. “You better be getting a price benefit because the power on their grid would be clean anyways.” 

“Some folks are asking ‘Why do anything now? Just wait until Consumers cleans up the grid,’” Gish acknowledged. “But our purchase shows we have skin in the game.” 

A complement to rooftop

In 2009, Milwaukee adopted a goal of powering 25% of city operations — excluding waterworks — with solar by 2025. The city’s Climate and Equity Plan adopted in 2023 also enshrined that goal. 

For a decade, Milwaukee has been battling We Energies over the city’s plan to install rooftop solar on City Hall and other buildings through a third-party owner, Eagle Point Solar. The city sought the arrangement — common in many states — to tap federal tax incentives that a nonprofit public entity couldn’t reap. But We Energies argued that third party ownership would mean Eagle Point would be acting as a utility and infringing on We Energies’ territory. A lawsuit over Milwaukee’s plans with Eagle Point is still pending.

In 2018 in Milwaukee, We Energies launched a pilot solar program known by critics as “rent a roof,” in which the utility leased rooftop space for its own solar arrays. Advocates and Milwaukee officials opposed the program, arguing that it encouraged the utility to suppress the private market or publicly owned solar. In 2023, the state Public Service Commission denied the utility’s request to expand the program.

Wisconsin’s Citizens Utility Board opposed the rent-a-roof arrangement since it passed costs it viewed as unfair on to ratepayers. But Wisconsin CUB Executive Director Tom Content said the city’s current partnership with We Energies is different since it is just the city, not ratepayers, footing the cost for solar that helps the city meet its goals.

Milwaukee is paying about $84,000 extra per year for We Energies to build solar farms on a city landfill near the airport and outside the city limits in the town of Caledonia. The deal includes a requirement that We Energies hire underemployed or unemployed Milwaukee residents.

The Caledonia project is nearly complete and will provide over 11 million kWh of energy annually, “enough to make 57 municipal police stations, fire stations and health clinics 100% renewable electricity,” said Milwaukee Environmental Collaboration Office director Erick Shambarger. 

The landfill project is slated to break ground in 2025. The two arrays will total 11 MW and provide enough power for 83 city buildings, including City Hall – where Milwaukee had hoped to do the rooftop array with Eagle Point. 

Meanwhile, Milwaukee is building its own rooftop solar on the Martin Luther King Jr. library and later other public buildings, and Shambarger said the city will apply for direct pay tax credits made possible by the Inflation Reduction Act — basically eliminating the need for a third-party agreement.

“Utility-scale is the complement to rooftop,” said Shambarger. “They own it and maintain it, we get the RECs. It worked out pretty well. If you think about it from a big picture standpoint, to now have the utility offer a big customer like the city an option to source their power from renewable energy — that didn’t exist five years ago. If you were a big customer in Wisconsin five years ago, you really had no option except for buying RECs from who knows where. We worked hard with them to make sure we could see our renewable energy being built.”

We Energies already owns a smaller 2.25 MW solar farm on the same landfill, under a similar arrangement. Building solar on the landfill is less efficient than other types of land since special mounting is needed to avoid puncturing the landfill’s clay cap, and the panels can’t turn to follow the sun. But Shambarger said the sacrifice is worth it to have solar within the city limits, on land useful for little else.

“We do think it’s important to have some of this where people can see it and understand it,” he said. “We also have the workforce requirements, it’s nice to have it close to home for our local workers.”

Madison is also pursuing a mix of city-owned distributed solar and utility-scale partnerships. 

On Earth Day 2024, Madison announced it has installed 2 MW of solar on 38 city rooftops. But a utility-scale solar partnership with utility MGE is also crucial to the goal of 100% clean energy for city operations by 2030. Through MGE’s Renewable Energy Rider program, Madison helped pay for the 8 MW Hermsdorf Solar Fields on a city landfill, with 5 MW devoted to city operations and 3 MW devoted to the school district. The 53-acre project went online in 2022.

Farrell said such “all of the above” approaches are ideal.

“The lesson we’ve seen generally is the more any entity can directly own the solar project, the more financial benefit you’ll get,” he said. “Ownership comes with privileges, and with risks. 

“Energy is in addition to a lot of other challenging issues that cities have to work on. The gold standard is solar on a couple public buildings with battery storage, so these are resiliency places if the grid goes down.”

A version of this article was first published by Energy News Network and is republished here under a Creative Commons license.

In Michigan and Wisconsin, cities are finding rooftops alone may not achieve solar energy goals is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

Southeastern Wisconsin and the Chicago area are emerging as major players in the national data center explosion, most notably with Microsoft’s $3.3 billion planned data complex near Racine, Wisconsin.

Clean energy advocates in the region say data centers pose both a risk and an opportunity as they can put major stress on the grid, prolong the lives of coal plants and spark new natural gas plants, but also facilitate significant renewable energy investment. Wisconsin utility We Energies, for example, cited demand from data centers in its recent requests to the Public Service Commission for 1,300 megawatts of new gas generation. Microsoft, meanwhile, has promised to build renewables in the state while also likely creating demand for new or continued fossil fuel energy.

The organization Data Center Map shows more than 100 data centers in the Chicago area and a handful in southeastern Wisconsin, often located on the site of former coal plants or industrial operations. A data center is underway on the site of the shuttered State Line coal plant just across the border from Chicago in Indiana. The data center developer T5 recently announced plans for four to six data centers totaling 480 megawatts of capacity and costing as much as $6 billion in the Illinois town of Grayslake near the Wisconsin border, adding to data centers it already runs in the region.

Virginia has long been known as “Data Center Alley,” with about 70% of global internet traffic passing through its servers, according to the Wall Street Journal. Dominion Energy said that because of data centers, its electricity demand in Virginia could quadruple and represent 40% of total demand in the state over the next 15 years. Georgia and Tennessee have also seen much data center construction and speculation. Utilities like TVA, Duke and Dominion have announced plans to build more gas plants and keep coal plants open longer in that region, along with building renewables.

Meanwhile, some experts say the Great Lakes region is an increasingly promising spot for data centers because of its cooler climate that reduces energy demand and the availability of water.

“There is no better place” for data centers than the Upper Midwest, said Josh Riedy, who helped design North Dakota’s first tier-three data center, referring to a data center with high reliability — on a scale of one to four tiers — that includes multiple power sources. Riedy also founded Thread, a grid maintenance software company that he’s marketing as especially helpful to serve data center demand.

“The Upper Midwest can export data around the globe,” Riedy said. “We’re starting to see the tide turn, it’s just natural.”

Growing load

Projections abound regarding the way data centers — including those processing cryptocurrency and running AI applications — will increase energy demand nationally and end an era of stagnant load growth.

Last year, the Federal Energy Regulatory Commission predicted 4.7% load growth over the next five years, up from 2.6% previously estimated for five-year growth. Data centers “supercharged by the rise of artificial intelligence” will require between 9 and 13 more gigawatts of electricity over the next five years, according to seven case studies analyzed in a December 2023 report by the Clean Grid Initiative, which does not include data center estimates for MISO or CAISO (California) regional transmission organizations. A McKinsey & Company report predicted 35 gigawatts of total demand from data centers by 2030.  

Load growth sparked by data centers comes on top of a shift from fossil fuels to electric heating, cooling and transportation. A 2022 report commissioned by Clean Wisconsin and RENEW Wisconsin found load growth could increase to 166% of 2022 levels with building and vehicle electrification needed to meet the state’s goals of net-zero emissions by 2050.

“Everything from data centers to manufacturing to AI to cryptocurrency,” said Sam Dunaiski, executive director of RENEW Wisconsin. “These all could be triggers for new load, and it all could be coming to Wisconsin, though it’s not unique to Wisconsin. Things like solar and battery manufacturing are coming online that ironically need new load growth too. We think the best way to meet that new load both environmentally and economically is through renewables and transmission to go along with it. This is a great opportunity for a low-cost renewable energy boom in the state.”

Along with the generation demand, Riedy noted, come needs for grid updates and resiliency, which can ultimately help the grid as a whole.

“If you’ve built and designed a data center, you know the nature of them is in many ways fundamentally different than most energized structures,” Riedy said. “Walmart, for example, is going to consume power, but it will have peaks, and constant power is important but not in the way it is to a data center. With crypto mining or AI model training, you see machines running at near peak performance around the clock. That’s producing a type of strain on the grid that has few comparisons.”

Microsoft and more

Microsoft’s energy plans — like many details about the massive data project — are not yet clear, and the company’s ambitious climate goals give advocates hope that the company will finance much new renewable generation either on-site or through power purchase agreements. The company has announced it will build a 250-megawatt solar array in Wisconsin.

But Microsoft will likely also purchase power from We Energies, fueling advocates’ worries about new natural gas generation and rate increases for regular customers.

The data center will be located on the sprawling site between Milwaukee and Chicago that was previously slated for an enormous LCD screen factory by the company Foxconn. That plan was repeatedly scaled back and then scrapped in the face of economic issues and local opposition.

Citizens Utility Board executive director Tom Content noted that “under state law passed for Foxconn, Microsoft is eligible for discounted market-based electricity rates. They would pay basically for the transmission and distribution, but a portion of their rates would just be set at wholesale market rate,” rather than the retail amount customers usually pay.  

In February, a subsidiary of We Energies filed a plan with the Wisconsin Public Service Commission for an estimated $304 million in grid upgrades related to the Microsoft project. Public auditors filed a letter with the commission noting exemptions that allow less oversight because the project is in a special technology zone.

The Microsoft plan was touted by President Joe Biden as an example of reinvigorated Midwestern investment, but it has faced concerns about its energy and water use. Meanwhile, Microsoft has faced setbacks globally in reaching its climate goals, in part because of the massive energy demand of artificial intelligence applications.

Cost concerns  

Advocates said utilities may use data centers to justify more investment that earns them a rate of return, even when it is not necessarily needed.

“We are concerned that there could be an overinflation of expected demand in order to capitalize on this trend and build more gas as a last-ditch effort,” said Ciaran Gallagher, energy and air manager for Clean Wisconsin.

“There’s a little bit of a sky-is-falling scenario here,” Dunaiski agreed. “In the early 2000s we saw this with load growth (projections) particularly around the internet. People thought the internet would cause our electricity generation needs to explode. They increased, but there were improvements that came with it — infrastructure getting more efficient, and software.”

That precedent raises questions about the rush to build out gas power to accommodate projected demand.

“Gas isn’t coal, but we shouldn’t be striving for the second worst option, for the environment or for our pocket books,” Dunaiski continued. “If we build these gas plants, customers will be paying for them for the next 20, 30 years.”

Gallagher noted that the EPA’s new rules for gas plants make new gas investments even more questionable.

“All the gas plants proposed in Wisconsin and across the country in relation to this demand from data centers will have to comply with these standards, and by 2032 either run not very often or reduce greenhouse gas emissions by 90% through carbon capture and sequestration or  low-carbon hydrogen,” Gallagher said. “That prompts the question: Is it worth the price tag to build these gas plants that could become stranded assets or have to spend additional money to comply with these rules?”

Using existing renewables or zero-emissions nuclear energy to power data centers can impact customers too. Content noted that this strategy “accomplishes the decarbonization goals for the tech companies and the reliability needs for the data center. But then you’re taking the fully depreciated, mostly paid-off asset on utilities’ books and having it serve one or two customers, and then the utilities will have to backfill that with a combination of natural gas, solar, storage, wind or future nuclear to serve the rest of the customers.”

“It’s on everybody’s mind how we’re going to tackle this in a way that ensures we don’t say no to economic development, but don’t make energy costs unaffordable,” said Content, noting that data centers have been a major topic of discussion among the National Association of State Utility Consumer Advocates, including at the organization’s conference in Madison in June. 

“Different states are trying different approaches,” Content said. “There’s talk of changing the way utility costs are divided up — currently among residential, industrial and commercial — and dividing it up four ways, with data centers becoming their own entity. Tech companies are pouring a lot of money into the development of these things. They have the wherewithal to contribute mightily to these projects.”

Renewable opportunities

Gallagher emphasized that renewable advocates are not opposed to data centers.

“We think data centers and the economic development that they can bring are not at odds with environmental protection and climate mitigation,” she said. “This can be a low-carbon industry but only if new additional renewables are built to supply all or most of their demands. We think that’s viable if renewables are cost-competitive with gas, and pairing renewables with storage can provide the type of reliability these data centers need.”

Riedy sees renewables and gas as a necessary mix to fuel data centers. While renewables’ intermittency might be seen as a barrier, he said renewables actually could have a unique role to play in energizing data centers – especially in the Midwest.

“In the heat of the day you’re delivering, so having alternate (energy) sources to peak-shave and normalize the cost of energizing that equipment is very important,” Riedy said. “It’s leading to a change in thinking around where to place data centers, that speaks to Wisconsin, the Dakotas. 

“The old way of doing things was generate power in one place, and transmit it for thousands of miles. What data centers are understanding with their insatiable and constant need for power is they are more logically placed by power generation so you can buy that off-peak power, to maintain that load consistently. Since solar and wind overproduce (at certain times), if you can harness that imbalance it’s somewhat of a win-win.”

A version of this article was first published by Energy News Network and is republished here under a Creative Commons license.

Data centers in Wisconsin and Chicago area offer energy peril and promise is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

WEC Energy Group in southeastern Wisconsin is planning to significantly expand its capacity for natural gas electricity generation, even as it has vowed to reach net-zero carbon emissions by 2050.

In recent filings by its subsidiary WEPCO (also known as We Energies), the company has asked state utility regulators for permission to bill ratepayers for two new natural gas power plants, a liquified natural gas (LNG) storage facility and a 33-mile pipeline to supply the proposed new plants.

Altogether, the projects represent a more than $2 billion investment the utility says will be critical for balancing growing wind and solar generation but advocates say could leave customers unfairly paying for facilities that are likely to be obsolete before mid-century. 

“We hope the commission will reject these proposals and rather direct WEC to invest in cleaner technologies as well as energy efficiency,” said Ciaran Gallagher, energy and air manager for Clean Wisconsin.  

WEC spokesperson Brendan Conway countered that the company is on track to meet its decarbonization goals and that the gas plants play a role.

“The key to the renewable energy transition is to have quick start gas plants available for those times when zero carbon generation cannot meet customers energy needs,” Conway said by email. “As we transition our baseload power to renewable energy, these proposed plants will support our customers when solar and wind are not able to provide enough power. We have a number of options, including hydrogen, renewable natural gas and new technologies that will help us meet our 2050 goal. We expect these (new gas) plants will serve customers for decades.”

Demand and reliability

The first indication of the utility’s gas expansion plans came in a Feb. 1 filing in which WEC asked state regulators to let it start collecting $200 million from ratepayers now for supplies it expected to need later for constructing two new gas plants and an LNG facility.

That filing also cites WEC’s plans to convert two coal plants to burn natural gas: its Elm Road Generating Station in Oak Creek and Unit 4 at its Weston plant near Wausau.

The company said it needs more gas capacity for three main reasons. Its coal plants are retiring, driven by Clean Air Act regulations. The regional transmission organization, MISO, is giving renewables less credit toward utilities’ capacity obligations. And demand is growing, driven largely by a boom in data centers in the area. 

That means the utility needs more renewables “paired with dispatchable natural gas” and related infrastructure, the filing says. This spring, WEC proposed a 1,100-megawatt natural gas plant with five simple cycle combustion turbines on the site of its Oak Creek coal plant 15 miles south of Milwaukee and a 128-megawatt gas plant near the town of Paris in Kenosha County. 

Cover letters for the Oak Creek and Paris gas plant proposals before the Public Service Commission say each project is “a key component” of WEC’s “continued transformation of its generation fleet to ensure reliability and resiliency” to comply with MISO and EPA rules.

Critics counter that gas is not the way to increase reliability, especially since natural gas supplies have been disrupted during extreme weather in the MISO region, including with winter storms Uri in 2021 and Elliott in 2022.

“There are reliability claims dotted throughout these applications,” said Gallagher. “There’s the expectation that MISO is going to devalue or lower accreditation of gas plants because they are increasingly not showing up during these winter (weather) events. Continuing to build out the dispatchable gas plants in WEC’s portfolio is leading us to a potentially more precarious position during these winter storms, as opposed to investing in wind and storage and solar.”

Until recent years, coal made up the bulk of Wisconsin’s power supply.

An 8K form filed April 15 with the Securities and Exchange Commission (SEC) notes that WEC plans to stop burning coal entirely by 2032. The form notes that 1,100 megawatts of coal units at Oak Creek and 300 megawatts at its Columbia plant will retire by 2026 and 328 megawatts at its Weston plant by 2032.

The Elm Road coal plant was built in 2011, at a cost of more than $2 billion plus recent spending on upgrades. Watchdogs point to its imminent conversion to gas as a warning sign about investing in fossil fuels that may soon become unviable. Ratepayers often continue paying for power plants even after they close, as much as hundreds of millions of dollars, as with We Energies’ Pleasant Prairie plant.

“In the early 2000s, the writing was on the wall that coal was bad for our health, for the climate, and there were expected carbon regulations,” said Gallagher. Yet WEC “built some of the last coal plants in the U.S., and Wisconsinites are still paying for those coal plants with their pocketbooks as well as with their health. We’re concerned that this investment in gas power plants and infrastructure is just another cash grab for WEC and their shareholders, as likely the last large gas plants are built in the United States.” 

Grand gas plans 

In an April 5 filing, WEC seeks approval to charge ratepayers $1.2 billion for the Oak Creek gas generators. A separate filing proposes the 128-megawatt Paris RICE plant at a cost of $280 million. RICE refers to the seven reciprocating internal combustion engines that would make up the plant. 

The town of Paris, near the proposed plant, requested to intervene in the proceeding, noting that “while small in footprint, (the plant) may have a substantial long-term impact on the town and its residents… The town is already carrying a high burden of power generation for southeastern Wisconsin.” 

A proposed $456.3 million liquified natural gas facility, also at the Oak Creek site, would compress and liquefy gas delivered in pipelines, storing two billion cubic feet to be ready for gas delivery interruptions and ensuring adequate supply for the new plants, WEC says. 

The proposed new natural gas pipeline, known as the Rochester Lateral, would cost $186 million, WEC’s filing says. 

Conway said that WEC also needs advance permission to start purchasing supplies for the gas investments. 

“Due to long lead-time and high demand of some equipment, we have requested to be able to procure certain items to make sure they are available in a timely manner,” he said. Consumer advocates argue the company shouldn’t be allowed to bill ratepayers for these supplies before the new power plants are even approved. 

The company, meanwhile, has not yet filed with the Public Service Commission for the Elm Road and Weston gas conversions. In February, the Public Service Commission approved WEC to invest $100 million to increase its share in the combined cycle gas plant West Riverside Energy Center, which it co-owns with Alliant Energy.

Financial costs, health costs

Tom Content, executive director of the state’s Citizens Utility Board, said that bill increases for the new natural gas costs would come on top of a $418 million electricity rate increase that We Energies customers are already facing in 2025 and 2026, which could add up to a nearly 30% rate hike for residential customers between 2022 and 2026, according to CUB’s analysis. Those rate increases are in part to pay for three major solar farms as well as one natural gas conversion. 

In an April 12 letter to the Public Service Commission, WEC executive vice president of external affairs Robert Garvin pegged the rate increases to new wind and solar power, inflation, extreme weather, an emerald ash borer infestation that has forced tree removal near power lines, and forgiveness of low-income customer bills. 

Clean energy and consumer advocates lauded the increase in renewable investments and said WEC Energy should focus on renewables and storage rather than spending more ratepayer money on gas.

“Ultimately, our state needs a holistic approach to reducing carbon emissions and strengthening our electric infrastructure,” said RENEW Wisconsin Executive Director Sam Dunaiski. “New natural gas plants do not put us on a path toward a fully decarbonized economy. Other solutions to meet Wisconsin’s energy needs could include more distributed renewable generation, energy efficiency, performance-based rate-making, and the coupling of battery storage with solar and wind projects. Wisconsin needs transparent planning in order to make smart energy decisions for our future.” 

Gallagher echoed a longtime criticism of environmental and consumer advocates: that Wisconsin does not require utilities to file regular, long-range outlooks, known as Integrated Resource Plans, like those used by regulators in many states to help guide decisions. A bill introduced last fall would create such a process in Wisconsin. 

“The commission is forced into these more narrow decisions related to the need of one project or another, we’re not even seeing all four of the projects that WEC says are necessary at the same time,” Gallagher said. “There is this lack of comprehensive planning in our state, and we’re seeing the impact with these proposals.” 

Content called on the commission to protect ratepayers from being saddled with costs for unnecessary power generation, including the guaranteed return on investment that utilities get as profit.

“It always comes back to the whole capital bias,” he said. “The build-build-build bias on the part of every public utility is front and center. The more they build, the more they earn.” 

Health concerns

As a primary care doctor in Milwaukee, Victoria Gillet says she constantly sees patients in respiratory distress. She says she feels the pollution herself, with aching lungs when she bikes to work.  

“It really impacts people’s lives,” she said. “I know for sure when the air quality gets worse, my patients end up hospitalized.” 

Natural gas-fired plants emit far less particulate matter than coal-burning power plants, as well as less carbon dioxide. But gas plants emit other compounds harmful to public health, including nitrogen oxides and sulfur dioxide.

“When health is your number one focus, it has to be about just getting pollutants gone, not making them less,” Gillet said. “There is no safe number of kids having asthma attacks. The community around the Oak Creek plant fought so, so, so hard to be less impacted by the coal they’re exposed to. We shouldn’t be replacing that with something a little less worse. We should give that entire neighborhood a reprieve from being exposed to polluting industries.” 

She added that her patients include “the kind, wonderful people who want to mow their neighbors’ lawns,” or do healthy outdoor exercise, but air pollution can make such activities dangerous.  

“I’ve tried to be a lot more intentional, making people aware of how this will impact their health, looking at air quality indicators the same way you look at the weather,” she said. “That makes me sad.”

A version of this story was originally published by the Energy News Network.

WE Energies wants $2 billion from Wisconsin ratepayers for new gas plants while still paying off past coal ones is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

When Wisconsin’s largest coal plant, the Columbia Energy Center, closes in the next few years, a carbon dioxide-filled “battery” developed by the Italian company Energy Dome will take its place. 

The installation is billed by its backers as a potentially crucial development in the renewable energy transition. The European Investment Bank announced at the COP28 climate conference this month that it is backing a similar project by the same company in Italy.

The balloon-like facility will use electricity to compress carbon dioxide when demand is low. When demand is higher, it can generate electricity by letting the carbon dioxide expand to drive a turbine. 

While energy storage can lower emissions, renewable energy advocates say the climate benefits depend on whether the projects also drive development of wind and solar. A single pilot project is unlikely to do so, but a successful test could show new ways to manage those variable sources in the future that don’t require natural gas as a “bridge fuel.” 

“Right now we have nothing that can buffer a 4 megawatt solar field,” said Oliver Schmitz, director of the Grainger Institute of Engineering at the University of Wisconsin-Madison and a technical adviser on the Energy Dome project. “If we show this works now using whatever energy mix we have, we have the certainty” to deploy more renewables paired with it in the future.

Last year, Wisconsin got 37% of its electricity from natural gas and 36% from coal, according to the Energy Information Administration. Nuclear provided 16% of electricity used in Wisconsin, and non-hydro renewables provided less than 1%, according to the EIA. These energy sources will largely power the battery until the state’s energy mix changes drastically. 

A goal of Wisconsin’s Energy Dome, slated to be the first commercial-scale application of the technology, is to drive more renewable development, according to Alliant Energy, the utility that co-owns the Columbia coal plant.

“The expansion of energy storage infrastructure is key to accelerating the transition to cleaner, more sustainable renewable energy,” said Alliant Energy spokesperson Tony Palese. “As we retire older fossil fuel facilities and add additional renewable resources to our generation portfolio, energy storage solutions help to ensure system reliability and meet customer needs.”

But the 20-megawatt Energy Dome alone won’t likely drive new renewable development. Even if the project is successful and more Energy Domes are built, as Palese said is possible, some other challenges still would stand in the way.

Alliant Energy is the largest utility owner-operator of solar in Wisconsin, with over 250 megawatts deployed and 839 megawatts more slated for completion by mid-2024. Since Wisconsin is part of the MISO grid (Midcontinent Independent System Operator), the Energy Dome also pulls from a system where renewables are expanding quickly, but also plagued by a clogged interconnection queue, transmission constraints and other issues.

Alliant owns 1,700 megawatts of wind across Wisconsin, Iowa and Minnesota within the MISO grid, Palese noted, and is also expanding solar in Iowa. Meanwhile, in the future an Energy Dome could draw energy directly from wind or solar farms rather than the grid, Palese added.

“As we operate and evaluate various aspects of the Energy Dome system’s performance, we envision it could become a model for additional energy storage development for grid applications or directly connected to wind or solar developments,” Palese said.

Citizens Utility Board executive director Tom Content said the board would likely support the project only if it is genuinely aimed at expanding renewable deployment, and he would oppose any new natural gas generation to feed the Energy Dome.

“Energy storage technologies beyond lithium-ion batteries are being actively studied and can be key elements of the nation’s energy future,” he said. “It’s encouraging to see innovative concepts such as this get funding to be explored, proven and become more economical over time.”

A promising pilot

In September, Alliant Energy received a grant of up to $30 million from the U.S. Department of Energy to develop the Columbia Energy Storage Project. It will cover 12 acres of the coal plant site south of Portage, Wisconsin, including a large dome holding a balloon that can inflate and deflate as carbon dioxide is compressed and decompressed inside it.

When wind or solar power is abundant, the energy can be used to compress carbon dioxide gas into a liquid. When extra energy is needed, the liquid will be allowed to decompress, turning back into gas and powering a turbine to generate enough electricity to power up to 20,000 homes. 

The dome and balloon are part of a closed-loop system, meaning no carbon dioxide will be released, and no carbon dioxide delivery is needed after the initial setup. The project will tap into the grid infrastructure already onsite at the 1,112-megawatt coal plant, the last coal plant in Alliant’s fleet.

This is billed as the first-ever test of the technology at commercial scale. A much smaller 2.5 megawatt project is operating in Sardinia, Italy, where a new 20-megawatt Energy Dome is planned.

The Wisconsin project will explore whether the high efficiency rate of up to 75% achieved at the small project can be replicated when a much larger volume of gas is compressed. Carbon dioxide is especially suited for such an application since, unlike other gases, it can be liquified at ambient temperatures.

Mike Bremel, Alliant director of engineering and customer solutions, said Alliant put out a request for information on battery storage proposals in spring 2022, seeking projects that could provide 10 hours or more of reliable energy.

“Energy Dome was at the top of our list, basically because of its round-trip efficiency of 75%, and even more importantly the fact that it’s a really simple process that uses off-the-shelf components,” Bremel said. “The compression of CO2 to liquid has been done for over a century. It’s a reliable process that the industry and folks understand.”

Alliant was planning on a capital outlay of about $5 million, he said, whereas about $60 million would be needed for the Energy Dome project.

Around Thanksgiving of 2022, the company “stumbled upon” notice of a DOE Office of Clean Energy Demonstrations grant specifically for long-duration energy storage projects, Bremel said. The grant allows the project to move forward as a 50% cost-share between the federal government and Alliant as well as the two other utilities that own the Columbia Energy Center, WEC Energy Group and Madison Gas and Electric.

Used to buffer renewable energy production

Eight other projects received DOE grants, including one developing iron-based batteries at retiring coal plants in Minnesota and Colorado; and one using zinc bromide batteries in tandem with renewables in Manitowoc, Wisconsin. Bremel noted that Energy Dome was the only mechanical energy storage technology selected; the others involve thermal or chemical (battery) energy storage.

Schmitz said that compared to the many energy storage systems he’s studied — including lithium ion and flow batteries, thermal systems, molten salt — “this one is a huge storage solution at scale.”

Compared to batteries that involve precious metals and potentially other supply chain challenges, the Energy Dome can be built on-site using domestically sourced technology, including as many components as possible from Wisconsin, Bremel said. If the project is successful, more similar domes may be built on the Columbia coal plant site, he added.  

“Because it does use up substantial amounts of space, it’s pretty well-suited for rural solutions, rural resiliency,” said Bremel, noting a local microgrid could be built around the energy storage.

The utilities will be studying how the project can be used for load-following, providing less energy than its total capacity at a given time and extending how long it can provide energy.

“We could potentially have twice the duration,” Bremel said. “Once we understand this project more, there is potential to marry several domes to a single generation and compression source.”

Plans for operation in 2026

There has been much public concern about carbon dioxide pipelines and carbon sequestration, including in light of the disaster in Satartia, Mississippi, during which a carbon dioxide pipeline ruptured, the gas displaced oxygen and scores of people were sickened.

But Bremel said the dome poses little risk. There will be sensors to detect leaks in and around the facility, and “in the event there was a leak at the gas stage, it’s not going to leak at a very fast rate because it is at atmospheric pressure — it’s not at thousands of PSI” as in a pipeline, Bremel said. 

He said the project also involves very little environmental impact, including after its decommissioning expected after 25 to 30 years. Concrete will be poured around the dome perimeter, and the land directly underneath will be relatively untouched, Bremel said. The largely steel and plastic components can be recycled.

Alliant plans to seek needed approvals from the state Public Service Commission in the first half of 2024 and hopes to begin construction in 2025 and operation in 2026.

The University of Wisconsin, which works with Alliant through its Clean Energy Community Initiative, is helping lead a community engagement process and development of a community benefits agreement, conditions of the DOE grant.

“There is supposed to be a two-way engagement around energy justice, environmental justice, workforce and good jobs,” Schmitz said. “Communities guide the process, bring in their priorities and concerns.”

Madison Area Technical College will help develop a clean energy jobs pipeline around the storage project, building on its role leading a national consortium of community college energy programs. And University of Wisconsin faculty will likely study issues like whether the dome impacts birds, Schmitz said.

Schmitz noted that the Energy Dome itself won’t create many jobs after construction is done since “it is very low maintenance, very reliable.” But clean energy advocates hope the large dome’s presence will help raise awareness about clean energy more generally and encourage locals to work in the clean energy economy. That means the benefits for renewable deployment could go beyond the role of bridging intermittency.

“The best thing that can happen is visible projects like this have an immediate impact because they excite potential workers to think about this sector,” Schmitz said. “Maybe they become a solar installer or wind technician. Our workforce is strong on manufacturing and building things, so we want to upskill people into the clean energy domain.”

Developers hope a balloon-like battery will aid Wisconsin renewable energy efforts is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

Wisconsin utility WEC Group announced to shareholders last month that its subsidiaries would phase out coal by 2032, three years earlier than previously planned. 

We Energies’ Oak Creek plants will close in 2024 and 2025. Columbia Energy Center — the state’s largest coal plant, co-owned by WEC and Alliant — will close by 2026. Weston Unit 3 — co-owned with Dairyland Power Cooperative — will close by 2031.

Advocates applauded the news but said it only increases the urgency of making sure that ratepayers aren’t saddled with the costs of coal plants for years after they close. Under current policy, utilities can keep recouping their investments in coal plants — including in expensive pollution controls — and even earn a rate of return on those investments after coal plants have ceased producing energy. 

Advocates are calling for increased use of securitization, wherein a coal plant owner issues bonds to reduce the burden of debt after closure, similar to refinancing a mortgage. And they are arguing against the very premise that utilities are able to keep earning profits on coal plants that have closed.

Rate cases are proceeding before the state Public Service Commission for both We Energies and Alliant that include debate over the finances of closed coal plants. 

“We need to look at more options for saving people money, whether refinancing through securitization, or even the prospect of disallowing any profit from those plants, which would be a bold step,” said Citizens Utility Board Executive Director Tom Content. “Why should utilities be profiting from something that is already a brownfield site? Given all the investments the commission has approved for utilities that are natural gas, solar, battery storage, they’re doing well financially. Customers deserve a break.”

Denying profits?

Alliant is allowed to reap a 10% profit on its investments, including after coal plants are closed, and We Energies is allowed a 9.8% profit. 

Alliant’s Edgewater coal plant in Sheboygan will close by 2025. A Nov. 9 rate case hearing before the Public Service Commission included Alliant’s plans to keep charging ratepayers for its investments in the plant. 

Content said that while the commission didn’t mandate that the utility reduce costs to ratepayers, he was glad commissioners expressed frustration with Alliant for failing to consider ways to reduce the burden of the closed plant. 

Alliant earlier reached a settlement with the Citizens Utility Board to use a method called levelization in recouping its investments for the Edgewater plant. This arrangement reduces the costs to ratepayers in the years right after the coal plant closes, but could increase what ratepayers fork out by $90 million total by 2045, CUB regulatory affairs director Corey Singletary said in testimony before the commission in September. 

Singletary argued that once a coal plant like Alliant’s Edgewater is no longer “used and useful,” a utility should not be able to charge ratepayers for profits on the initial investment or installation of pollution controls. While such a policy could theoretically cause utilities to run coal plants even after they are not needed, Singletary said the commission could charge a company trying to do so with being “imprudent.” 

“It’s important to consider that utility investors have been provided a return on Edgewater plant in service for years, returns that have reflected the risk of owning and operating a utility, including the risk that one day the utility’s investments may no longer be in the money,” Singletary testified.

He concluded that the commission could call for a “complete disallowance” of profits on closed coal plants, even though it did approve their construction in the first place.

In testimonies before the commission regarding both Alliant and We Energies, Singletary said the companies are treating securitization as the “floor” in reducing costs to customers for the retiring coal plant, when in reality the “floor” could be “zero” payments for the plant once it closes.

Expanding securitization

Currently, utilities are allowed though not required to use securitization to offset the costs of pollution control equipment. This measure was used to save ratepayers about $40 million regarding the 2018 closing of WEC’s Pleasant Prairie coal plant. 

A 2004 law allows such securitization, but Pleasant Prairie is the only one for which it has been invoked.

A bill introduced by Republican state Sens. Robert Cowles and Duey Stroebel in October would expand the potential use of securitization, or environmental trust bonds, as the bill (LRB 4441) phrases it, in part by expanding the definition of “environmental control” to actually describe a coal plant closure.

The bill would let the Public Service Commission order a company to use environmental trust bonds after closure, a power the commission doesn’t currently have. 

Cowles also introduced a number of other bills demanding more transparency and ratepayer protections from the commission. The Legislature is scheduled to break for two months after Nov. 16, meaning the bills won’t likely move forward until 2024. 

Cowles’ co-sponsorship memo for the securitization bill argues that commission decisions “such as the early closing of a power plant, often do not even come before the Commission prior to the closure of the facility, despite the fact that ratepayers will still be responsible for paying the outstanding debt on a facility which is not creating any benefits for consumers.”

We Energies’ actions criticized

The Citizens Utility Board charges that We Energies did not adequately consider alternatives to reduce the cost burden on customers around the Oak Creek plant’s closing.

The company in its filings modeled recovering Oak Creek costs over 16 years and over 25 years, and also over 25 years with securitization of $100 million in retrofit investments. The longer cost recovery could save ratepayers in the near term but actually cost them as much as $153 million extra over time, CUB’s analysis found.

CUB told the commission that We Energies should consider securitization of the full $407 million outstanding for Oak Creek. CUB argued the commission should also simply not allow the company to recover certain costs once the coal plant is closed.

The Wisconsin Industrial Energy Group, which represents 25 large industrial energy users, also testified to the commission criticizing We Energies’ plans for the Oak Creek debt. It said securitizing $100 million is “too little and the interest rates and servicing fees too great” and recommended a more comprehensive securitization plan.

The utility had argued that state law only allows securitization of investments in pollution controls. But the industrial group’s expert Lane Kollen argued that the question is open to legal interpretation, and securitization on all outstanding costs could be sought.

Kollen also stressed that savings from securitization should be shared with customers, which is not required by Wisconsin law, and the utility’s profit on investments in the coal plant should be reduced after it is retired.

The industrial organization compared We Energies’ proposal to securitization plans by Duke Energy Progress and Kentucky Power Company regarding their own coal plants and noted that those utilities were proposing much more advantageous situations for ratepayers.

“Given the unprecedented rate increases that (We Energies) customers are facing as they support the necessary and enormously expensive transition to clean energy, more than ever it would be reasonable for the commission to determine that customers should not bear the full cost of a decommissioned” Oak Creek plant, CUB’s testimony said.

Similar to the We Energies case, Singletary and Kollen both said in testimony that Alliant should consider securitization on the full $473 million in outstanding costs for the Edgewater plant. Singletary said this could result in $80 million savings for ratepayers.

Kollen charged that in its rate case filings, the company miscalculated possible savings from securitization, making it look less attractive than it would actually be. 

Federal funds

The Inflation Reduction Act’s Energy Infrastructure Reinvestment Program could also provide relief around the costs of closed coal plants. The program provides low-interest loans if defunct energy infrastructure is retooled or repowered to meet clean energy goals. In all, the Inflation Reduction Act created $250 billion worth of such loans.

Clean Wisconsin said in testimony before the commission that Alliant could tap the Inflation Reduction Act program to refinance the Edgewater debt, then use those savings along with other IRA incentives to invest in 150 megawatts of solar and battery storage on the Edgewater site. That would help the utility invest in renewables without placing the burden on ratepayers. Clean Wisconsin’s analysis found leveraging IRA funds could save $168 million related to the coal plant retirement, compared to the planned levelization approach.

“These coal plants are already not economical to run, and when they have to compete against cheaper electricity from the wind, they’ll run even less frequently and potentially accelerate their closure,” Clean Wisconsin energy and air manager Ciaran Gallagher told the Energy News Network.

An Alliant representative testified before the commission that the utility had previously discussed this idea with the Department of Energy and was told the project would not be eligible. But such determinations could “change over time,” Clean Wisconsin’s testimony said, and the utility should revisit the possibility.

“To do any less would be squandering an opportunity to realize a win-win solution for the company and its customers, while ensuring Wisconsin benefits to the greatest extent possible from the federal government’s unprecedented investment in clean energy,” the testimony said. 

“The commission should ensure (Alliant) does everything possible to take full advantage of this and other recently authorized federal funding opportunities to make Wisconsin’s transition to clean energy more cost-effective for the utility’s customers.”

Wisconsin coal plants are closing, but ratepayers are still on the hook is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

Wisconsin has ambitious climate plans, but the Republican-controlled Legislature has refused to pass funding to carry them out. 

That’s why Wisconsin city and state leaders are especially glad for a nearly $5 billion federal initiative meant to help states and municipalities advance climate action plans.

The Climate Pollution Reduction Grant program, created by the Inflation Reduction Act, has already provided a $3 million planning grant to the Wisconsin Office of Sustainability and Clean Energy, as well as smaller grants to the Southeastern Wisconsin Regional Planning Commission and four tribal governments within the state’s borders.

“This is a really awesome kick-start to emissions reductions in the state,” said Maria Redmond, director of the Wisconsin Office of Sustainability and Clean Energy.

“The challenge in Wisconsin is we haven’t been able to get a lot of resources (for climate programs) because the Legislature hasn’t allocated them. The last three budget cycles, the governor proposed significant funding for climate action, including for this office. None of that has been approved. Through this grant, we can get a lot more done.”

The program this year awarded $250 million in non-competitive grants to states, tribes and major metropolitan areas for climate action planning. The entities that received the planning grants can then apply for implementation grants totaling $4.3 billion to carry out their climate action plans. 

The implementation grant application deadline is April 1, 2024. In a guidance document released in September, the U.S. Environmental Protection Agency said it anticipates awarding 30 to 115 such grants ranging between $2 million and $500 million. 

Redmond said the state has “already been doing a lot of work on decarbonization,” including in keeping with Gov. Tony Evers’ 2020 action plan, and “this gives us the resources to really ramp up this work locally,” including by “identifying pathways to reduce emissions, renewable deployment, optimizing energy efficiency, innovating in transportation, and improving our building stock,” and also potentially looking at agriculture, forestry and carbon sequestration.

Wisconsin lawmakers have pushed legislation that limits municipalities’ ability to pursue climate goals, like a ban on local zero-emissions mandates and a bill that would prevent local governments from operating pay electric vehicle charging stations. They’ve also thus far declined to pass a bill enabling community solar and rebuffed advocates’ requests for legal clarity on third-party-owned solar. 

Justin Backal Balik is the state program director for Evergreen Action, which was among organizations offering the administration input on designing the federal program. He said the grants are “tailor-made for a state like Wisconsin at this particular moment in time, when you have the leadership of Gov. Evers that has articulated a clean energy plan to achieve 100% decarbonization in the electricity sector, and also looking at the industrial sector and clean transportation goals.”

“One of the reasons Evergreen advocated for the (Climate Pollution Reduction Grant) was that it is specifically designed to focus on sectoral transformations and unmet funding needs — Wisconsin has a lot,” Backal Balik continued. “The policy vision is there, and particularly with the capacity Wisconsin has with the $3 million planning grant, there are a number of directions they could go in. This is a generational opportunity that’s not going to come around again, an opportunity to meet a good chunk of the unmet funding needs that have popped up as a result of the Republican intransigence in the Legislature.”

Planning process 

Redmond said the $3 million planning grant has allowed her office to hire a full-time community engagement facilitator and another full-time staffer, basically doubling the staff. The planning grant is also used for carrying out analysis, modeling, community outreach and status reports over a four-year period. 

Environmental justice is a focus of the funding and a key metric in the scoring system for implementation grants. Redmond said this dovetails with Wisconsin’s focus on equity and inclusion. 

“Understanding lived experience is one of the things we’re most excited about” augmenting with the planning grant dollars, she said. “This gives us the ability to go out to communities instead of having them come to us. It’s also about supporting organizations working in communities, making sure we are not expecting them to volunteer their time.”

That could include honorariums for people to attend community meetings. 

“We’re asking people to step away from their lives, maybe in the evening when they need child care, or to step away from their jobs,” she said.

Redmond said the state is also planning to work with Illinois and Minnesota to “make sure we are in alignment with state plans, and not working against each other” — especially since Wisconsin metropolitan areas overlap with those states.

Allison Carlson, executive director of the Wisconsin Local Government Climate Coalition, said staff capacity is a common need for local governments on the climate front, and she’s glad the planning grants can be used to hire staff.

“A lot of local governments have one person dedicated to climate action, probably being shared with other departments like recycling; they have a lot of other things on their plate,” she said. “We need to be making sure we’re building capacity in local governments and in communities to sustain efforts over time.”

Backal Balik noted the planning grants are meant to help governments make sense of all the incentives and opportunities on the table. 

“EPA is really encouraging states and other jurisdictions to use the CPRG process to step back and look at their federal funding deployment strategy as a whole,” he said. “You have Solar for All here, and direct pay here, so many different pieces. The planning process is asking states to think about how all these funding streams can be accessed together. The parts are pretty consequential in their own right, but you have the opportunity to really scale up the impact of what all the federal investments can achieve.”

Local action and collaboration 

States or metro areas that received planning grants can serve as coordinating entities to collaborate with other government bodies to seek grants. Redmond said her office is eager to work with Wisconsin municipalities and agencies on meeting their climate goals and will hold nine regional meetings for that purpose.

The Wisconsin Local Government Climate Coalition is also focused on helping municipalities participate in the CPRG program. 

“Many member communities have their own climate action or clean energy plans in place. They’ve done data analysis, engaging with their communities to understand what the needs are — a lot of them are already making strides,” she said. “One of the big barriers is: Where are the dollars to actually do these things? The competitive CPRG grants and other IRA funds are allowing communities to put their plans into action.”

She added that “a lot of the climate action plans were already in place or in process, not necessarily prompted by the CPRG process.”

“But what the CPRG process does is create opportunity to align the needs of local communities with the state and other stakeholders, so we can leverage even more IRA dollars and become more organized together.”

Kelly Hilyard is the sustainability coordinator for the city of Middleton. She said her office has been stymied by legislative inaction around electric vehicles and applied for federal funding for electric vehicles under the Carbon Reduction Program, a program separate from CPRG under the U.S. Department of Transportation. But the city had to switch its proposal to seek funding for LED lights instead because of constraints placed on the program by the Legislature.

Hilyard said the city “scrambled” to put together a proposal to transition street lights to LEDs, which was necessary “low-hanging fruit,” but the city still hopes to seek federal funds for electric vehicles.

Since being part of a seven-city collaboration on an energy plan in 2020, Middleton has been “ticking things off” on a list of priorities like increased building efficiency and putting solar on city buildings. The city is working on a battery storage project at the police station, where a planned microgrid had to be scaled back because of the pandemic. 

Hilyard said the city has not been very focused on the CPRG thus far, but is looking for multiple sources of federal and other funding for its goals and for the advance study and planning needed to bring goals to fruition.

“It’s chicken or the egg — what information do you need to get the grant to do the work, and how do you get the grant to get the information?” she said. “You have to work it from both ends constantly.”

A top priority is energy efficiency for the city’s affordable but often aging and inefficient housing units. A separate federal grant is helping the city take inventory of its housing stock.

“Once you stack all those incentives, decarbonizing entire neighborhoods becomes possible,” she said. “You can do major projects and reduce the energy burden for people most affected by climate change and high energy bills.”

La Crosse environmental planner Lewis Kuhlman is hopeful that federal programs like the CPRG could help the city acquire more electric city buses or other electric vehicles, as well as creating an electric bike share program.

The city’s sustainability efforts have largely been through a partnership with the company Johnson Controls, which has provided the city with solar, energy efficiency and other energy investments, with a performance contract guaranteeing savings. The partnership helped the city access solar despite the state’s failure to clarify the legality of third-party-owned solar, which has made it more difficult for municipalities to finance solar energy.

“Huge grant opportunities like this are going to take collaboration because communities the size of La Crosse don’t really have the staff to implement or prepare for a grant like this,” Kuhlman said. “There are so many different types of projects that can get funding; we need to keep an eye on what we have in our plan — and how can that fit into what’s available for funding? And do state regulations allow it?”

The implementation grants are meant to help states and municipalities meet their climate goals; reduce hazardous air pollutants, especially in disadvantaged communities; complement other funding sources for greenhouse gas reductions; and create programs that are replicable and scalable. The agency is encouraging collaborative proposals that cross local and state lines. Points in the competitive grant scoring process are awarded based on criteria including the funding need, the extent of emissions reductions, benefits to low-income and disadvantaged communities, and community outreach.

Redmond noted that doing extensive engagement, figuring out what different stakeholders need and want, and meeting the application deadline all in six months will be a challenge.

“One of the things that keeps me awake at night is the timeline,” she said. “We need to have a thoughtful and meaningful process” in a tight time frame, “but we’ll make it happen.”

Taking the lead

Milwaukee’s Climate and Equity Plan calls for making the city carbon-neutral by 2050 and creating green jobs that drive racial and economic equity. The city proposes to do this through projects including clean energy, a green jobs accelerator and transportation electrification. 

Erick Shambarger, Milwaukee director of environmental sustainability, said city staff hope CPRG funding will help the city implement its long-standing ambitious climate goals. He said other municipalities in the metropolitan area that received the grant have taken inspiration from Milwaukee in crafting climate action plans of their own.  

“It took several years for us to get our climate plan together, and we don’t have that kind of time relative to getting everything in place for these implementation grants,” Shambarger said. “We don’t want to start from scratch. We want to share lessons we’ve learned; we don’t want to reinvent the wheel on planning processes.”

He said a key focus of the planning grant is a greenhouse gas emissions inventory, which has never been done for the region as a whole. He said that the metro group still hasn’t decided where to focus their CPRG-related plans.

“It could be everything from a major transportation project to a focus on buildings,” he said. “It could go in a lot of different directions. We’ve been doing pilot projects, but this will really be important to take it to the next level.”

Marco Marquez is the Wisconsin state director for the organization Action for the Climate Emergency, which mobilizes youth. He said Inflation Reduction Act programs could provide federal funding for multiple climate-related initiatives that young people are passionate about and that affect them directly — like electric school buses and energy efficiency and updated HVAC systems in aging school buildings. He said young people are especially frustrated by the inertia of the Wisconsin Legislature on such issues. 

“It’s unfortunate that we see a lot of effort from elected officials trying to dictate how each municipality can run and what they’re able to seek in terms of funding,” he said.

The funding available under the IRA and the potential for entities to apply for it without going through the state Legislature holds much promise, he added. While his organization has not been specifically focused on CPRG, he sees it as symbolic of larger trends and opportunities.

“This is an amazing opportunity for young people to rewrite and rethink how our society should operate,” Marquez said. “And climate is the justice issue.”

Four states — Florida, Iowa, Kentucky and South Dakota — declined to participate in the CPRG program. Metropolitan areas in those states that received planning grants can still participate. In Iowa, the Des Moines, Cedar Rapids and Iowa City areas received planning grants and can apply directly for CPRG implementation funds.

Backal Balik said advocates hope the CPRG dollars can not only help work around inaction from the Legislature in Wisconsin and other states, but actually change a state’s direction on climate as people see the benefits of the funding play out.

“As in Wisconsin, the program is purposely designed to achieve emissions reductions in states where they wouldn’t otherwise occur,” he said. “It’s not just moving money around, but incentivizing the next round of leadership. We had administrations willing to act but with constraints outside of their control. This is a moment in time where they can get a huge chunk of resources to move forward their climate vision.”

In Wisconsin, federal grants could break bottleneck on climate funding is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

Wisconsin utility MGE is proposing to drastically scale back the net metering rates that residents are paid for their solar generation, putting residential customers with small arrays on the same distributed generation program as commercial customers with large arrays.

Advocates are asking the state Public Service Commission to deny the proposal in MGE’s ongoing rate case and instead continue studying how utilities can best compensate customers for solar.

Under the MGE proposal, customers who install solar after 2024 would receive about 7 cents per kilowatt-hour, as opposed to about 13 cents now, for the energy they send back to the grid. The new compensation rate is currently applied to large customers, based on the market and capacity prices set by the Midcontinent Independent System Operator regional transmission organization.

Another Wisconsin utility, Alliant Energy, is also proposing major changes to net metering in its rate case, including calculating compensation on an hourly basis instead of monthly and reimbursing customers more for their energy during peak demand periods. Alliant spokesperson Tony Palese said this means customers could be paid anywhere from 7.9 to 13.5 cents per kilowatt-hour for their energy, depending on when it is sent to the grid. That compares to the 7.1 cents per kilowatt-hour that Palese said residents are currently paid.

Palese said the proposed changes would actually increase the total amount Alliant’s customers with solar are paid and “ensure homeowners that generate solar energy at peak times can offset their consumption at the peak retail rate or sell energy they don’t use to Alliant Energy at the peak buyback rate.” 

Clean energy group Renew Wisconsin worked with Alliant on an agreement that through 2025, customers can choose whether to stick with the previous net metering plan or enroll in the new program, called Power Partnership. The agreement also stipulates that Alliant will provide the information necessary for customers to calculate the expected payback period for their solar installations. 

“Transitions away from net metering are rarely this favorable to solar customers,” Renew said in a press release.

Meanwhile, solar advocates say the Alliant and MGE cases taken together show that the Public Service Commission should come up with a uniform policy for compensating residential solar generation, rather than allowing “ad-hoc major reforms utility by utility,” as Renew policy director Andrew Kell said in testimony before the commission. 

Calculating costs 

Jeannette LeZaks, an MGE customer, installed a 5.4-kilowatt system two years ago. Under MGE’s proposal, the current net metering policies will continue to apply to existing solar arrays. But she worries fewer people will be able to install solar in the future if MGE’s proposal is approved. 

“If we didn’t have that net metering, the equation becomes different,” she said. “It would come down to wanting to do it to help the climate crisis or feel like you’re producing your own electricity. But for those where money would be an issue, they might choose not to purchase solar. That would be unfortunate blowback to what seems to be a very enthusiastic embrace of solar.” 

MGE, which serves the Madison area, has argued that with increasing numbers of customers installing solar, those without solar are paying an unfair amount for grid upkeep.

In testimony, MGE rates director Brian Penington said that in 2024, about 2,100 customers are expected to sell energy back to MGE at a total cost of about $2.1 million — paid by the utility’s overall customer base, at rates higher than they could get from the wholesale market. The average size of residential systems is increasing, and the utility expects 350 to 400 new residential solar systems to be installed each year, including with incentives from the Inflation Reduction Act, Penington testified. 

He said the current net metering structure means customers with solar are “utilizing the MGE system as a virtual bank or battery.” Replacing the retail rate they are paid for electricity with the market-based lower rate would reduce costs for purchasing distributed solar.

“This proposal also will ensure that solar energy produced by our customers and sold to MGE will be compensated at the same rate (by transitioning to one rate) when purchased by the utility on behalf of all customers, regardless of the size of the customer’s system,” said MGE spokesperson Steve Schultz. “It also helps to maintain energy affordability for all customers. These solar purchases are considered ‘fuel costs’ and are paid by all other MGE electric customers.” 

Solar advocates have long pushed back against this “cost-shifting” argument, noting that solar reduces the need for costly new generation or running peaker plants during heavy demand periods and makes the grid more resilient for everyone.

Wisconsin Citizens Utility Board director of regulatory affairs Corey Singletary testified to the commission that there may be an imbalance in the current amount customers with and without solar are paying, but revised compensation structures must take into account the full, long-term value that distributed solar provides to the system. This includes decreased transmission needs, he noted, and he called MGE “disingenuous” in arguing that customer solar does not provide transmission value. 

A holistic approach 

In intervenor testimony, Renew Wisconsin’s Kell said approving MGE’s proposal would contradict the purpose of the Public Service Commission’s ongoing investigation of parallel generation purchase rates. He said that study “is a more appropriate forum to consider a new precedent that would ultimately change (net metering) policy.”

Net metering rates or other compensation for distributed solar should be based on the avoided costs for generation, transmission, distribution and capacity, Kell said in his testimony, as well as the environmental benefits. 

“This approach will allow the commission to develop a glidepath framework for utilities to adopt and implement as various standards are met and milestones are observed” in distributed solar penetration, he testified. 

Kell noted that states like Hawaii and California have much higher proportions of solar on their grid — at 17.6% and 8.7% of net metering participation, respectively — and still offer net metering policies. Wisconsin is only at 0.3% net metering participation, similar to Minnesota and Michigan, and below Illinois and Iowa at 0.6% and 0.5%. 

Along with the net metering changes, MGE proposes to offer a one-time $200-per-kilowatt incentive payment for solar, limited to 400 customers per year and to 5 kW per customer. The utility I&M made similar changes in its rate case for Southwest Michigan customers last summer. Those changes were opposed by clean energy advocates and legislators.

Modeling by MGE and Kell showed that the proposed changes would shift the payback period for a typical residential solar installation from nine years to 16 years. In response to the Energy News Network, MGE said that with the upfront payment, payback times would be similar for systems that are sized appropriately.

“Customers who participate in net metering will continue to see savings from offsetting their own energy use with the electricity generated by their own solar when it’s sized for their own usage,” Schultz said. “Our proposal only addresses the price of the energy the customer is not using and selling to (or) being purchased by MGE on behalf of our other electric customers.”

Renew clean energy deployment manager Michael Vickerman, in his testimony with the commission, called MGE’s proposal a “double whammy” since it not only lowers compensation rates for solar but switches from monthly to instantaneous calculations. Solar advocates have said that is not “net metering” at all, since customers can’t offset their bills with credit for the energy they’ve generated unless they use that energy at the moment it’s created. If customers are paid anything less than the retail rate for the energy they send back to the grid, this means instantaneous netting will mean less savings for customers than longer netting periods. 

Vickerman noted that customers are most likely to be generating solar during the day, when they will be compensated at lower rates than in the evening, when demand is high as people get home from work and turn on lights and appliances. 

In his testimony, Vickerman said he finds the “incentive structure to be contrary to Wisconsin’s clean energy goals. Solar PV can provide substantial benefits to MGE, including the supply of electricity at fixed prices during peak system hours. … Removing this generation from the grid would only further extend the need for MGE to maintain its existing fleet of peaker plants to meet system demand, facilities which produce substantial greenhouse gas emissions.”

Kari Lydersen has written for the Energy News Network since January 2011. She is an author and journalist who worked for the Washington Post’s Midwest bureau from 1997 through 2009. Her work has also appeared in the New York Times, Chicago News Cooperative, Chicago Reader and other publications. Based in Chicago, Kari covers Illinois, Wisconsin and Indiana as well as environmental justice topics.

Wisconsin utilities push own policies to compensate solar panel owners, but advocates want a unified approach is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

U.S. Environmental Protection Agency officials were met with photos and tearful stories of deceased loved ones at a national hearing in Chicago on Wednesday regarding the agency’s proposed new rules regulating coal ash. 

The proposed rules, released in May, would subject hundreds more coal ash dumps to federal regulations adopted in 2015. But scores of coal ash dumps would remain unregulated, leading residents and advocates to plead with the EPA to further expand the proposed rules and step up enforcement of existing rules. 

The environmental injustice of coal ash was clear at the hearing, as residents testified from Native American communities in New Mexico and Nevada, Latino communities in Midwestern cities, and Black communities in Alabama and Tennessee, among others. Multiple people told the EPA officials about their friends and family who had died or suffered from cancer or other illnesses they attribute to coal ash. 

The proposed rules would, for the first time, regulate coal ash ponds that were inactive as of 2015. But the rules would still exempt categories of dumps that speakers at the hearing called “arbitrary,” including repositories not in contact with water as of 2015, coal ash dumps at plants closed before 2015 that don’t have a currently regulated pond at the same site, and scattered coal ash used as structural fill. 

“Anecdotally we know such sites include playgrounds, schools, roads and other uses that humans regularly come into contact with,” Earthjustice deputy managing attorney Gavin Kearney said of sites where coal ash fill was used. 

He noted that there is no comprehensive data regarding coal ash ponds supposedly not in contact with liquid, but experts are sure companies will invoke that exception. Earthjustice and its partners, meanwhile, have identified more than 100 dumps on at least 48 sites that would meet the exception for closed ponds at active power plants without another regulated coal ash impoundment.   

“Creating these distinctions undermines confidence in the rule and also gives industry cover, in good faith or bad faith, that they are trying to implement the rule but aren’t sure how it applies to their sites,” Kearney told the EPA representatives. 

Frank Holleman, senior attorney for the Southern Environmental Law Center, likewise warned that it “undercuts the credibility of EPA and our government to have to say, ‘See, that over there is not protected because of some highly technical reason that’s not connected to common sense.’” 

Attorney Faith Bugel testified that regulating all coal ash on a site without exceptions is critical to avoid companies saying that contamination is from an “alternate source,” including coal ash not covered by the regulations, and hence avoiding responsibility for cleaning it up. “So often (alternative source arguments) have been used as an escape valve from the 2015 rules,” Bugel said. 

Drinking water fears

Unregulated coal ash is of particular concern to people who get their water from private wells, as numerous people noted at the hearing. 

Environmental groups’ analysis of company data reported under the 2015 rules shows that groundwater is being contaminated at 91% of those coal plant sites. No testing is required around ash not covered by the regulations. But experts say it is even more likely to be contaminating groundwater, since it was dumped when standards around liners and other protections were even lower. 

Private water wells are only tested if the owner pays for the testing, which is inaccessible for many. Paul Kysel told the EPA about testing his own well water for contaminants associated with farming and getting clean results. He said he didn’t realize that a partially unlined coal ash pond less than a mile from his home in Pines Township, Indiana, could be contaminating his water with chemicals not detected in that test. 

Nearby Town of Pines, Indiana, became a Superfund site due to tons of coal ash from NIPSCO’s Michigan City plant that was used as fill throughout the town. Kysel had moved to the bucolic area from Michigan City, where he was sick of “coal dust, nasty odors, (coal dust) deposits on our vehicles and homes.” 

“We thought we were safe,” after moving to Pines Township, Kysel said. “We weren’t safe.” 

He and other locals are upset that the proposed new rules would still not cover coal ash mixed with dune sand to build up land on the lakefront coal plant’s site. A lawsuit filed by environmental groups in Indiana, Illinois and Tennessee alleges that Lake Michigan is at serious risk of coal ash contamination if erosion and increasing storms cause the land to collapse, as happened near We Energies’ Oak Creek coal plant in Wisconsin in 2011. Lake Michigan provides drinking water for millions of people in Chicago, Northwest Indiana and Southeast Wisconsin, where multiple coal plants line the shores.

The settlement of that lawsuit spurred the EPA to release the proposed new rules, though the rules don’t address ash used as fill at sites like the Michigan City plant. 

“This coal ash is ultimately going to rupture into the lake and cause another catastrophe,” Ashley Williams, executive director of Just Transition Northwest Indiana, said at a rally during the hearing. The owner of a Northwest Indiana microbrewery that relies on Lake Michigan water was among other locals who testified at the hearing. 

Earthjustice senior counsel Lisa Evans noted that the new proposed rules would not have covered the ash in Town of Pines nor the ash that spilled into Lake Michigan at Oak Creek. 

“The EPA should have prevented this damage decades ago,” Evans testified. “It is irrational and illegal to regulate some leaking dumps and not others.” 

Ash was used to build up land and was scattered across plant sites in decades past without record-keeping or regulation. This practice essentially continues in the form of beneficial reuse, where coal ash is legally used as “unencapsulated” structural fill. Advocates have also called for stricter regulation of such reuse, including in Wisconsin, where a vast majority of coal ash is reused and groundwater contamination has been shown as a result. 

Chicago has no coal ash ponds or landfills covered by the existing or new proposed rules. But residents worry that as in Michigan City, coal ash was scattered and dumped across the sites of two coal plants that closed in 2012.

Little Village Environmental Justice Organization Executive Director Kim Wasserman noted that the Chicago neighborhood is densely populated by working-class and Latino residents. She echoed demands that new EPA rules require companies to test for historic coal ash scattered around their sites and clean up any they find. 

There is not “sufficient information about the risk the site still poses to surrounding communities,” Wasserman said. She added that the community does not trust the current site owner given its botched implosion of the coal plant in 2020, sending a toxic dust cloud across the community in an “environmental catastrophe,” as Little Village resident Edith Tovar called it at the hearing.

A moving problem

Enforcement and expansion of the federal rules will ultimately mean many millions of tons of coal ash will be removed and transported to safer locations. Such transport has already caused environmental injustices, even as it mitigates other risks.

Carlos Torrealba, an organizer with the Climate Justice Alliance in Florida, lamented how coal ash from Puerto Rico is being disposed of in Florida, including in a private landfill in a community home to a large and growing Puerto Rican population. The Energy News Network documented how the ash from Puerto Rico poses risks to multiple communities on its route in the Southeast.

“It’s really mind-boggling because that coal ash site was put next to the homes of Puerto Ricans who had been displaced from Puerto Rico by Hurricane Maria,” Torrealba said. “And now they have the double impact of being displaced, seeking refuge and having coal ash dumped next to you.” 

Cerissa A. Brown of the People’s Justice Council in Birmingham, Alabama, decried how coal ash from the infamous 2008 Kingston, Tennessee, spill was delivered to a landfill in the largely Black community of Uniontown, Alabama. The Energy News Network reported last year that Uniontown residents have been unable to get answers from the private landfill company about its coal ash management procedures and whether it still accepts coal ash.

“Exposure to environmental pollution such as coal ash in Uniontown has resulted in residents suffering physical harm and an escalating mental health crisis,” Brown said. “This reveals systemic racism rooted in our communities.”

Handling and moving coal ash can pose serious risks to workers if adequate protections aren’t in place. 

Betty Johnson’s husband, Tommy, was among the first responders cleaning up the 2008 Kingston spill. She broke down into tears testifying about how he and other workers labored without adequate protective gear. She blames his death last month on his exposure to coal ash. Johnson is among workers who have filed lawsuits against the contractor responsible for the cleanup, citing multiple deaths and serious illnesses. Advocates argue that disasters similar to Kingston could happen if regulations do not require the full cleanup of all coal ash dumps.

“My husband and I had plans when I retired to travel; now he’s in the graveyard,” Johnson said. “And I’m here fighting for my husband and all the workers, everyone who has been hurt by you, because you are not doing your job.”

Julie Bledsoe’s husband also worked on the Kingston cleanup, and would come home blowing coal ash out of his nose, coughing up coal ash, and cleaning coal ash out of his ears with Q-tips. 

“Her husband is a hero,” she said of Tommy Johnson. “My husband is a hero. But they were treated like they were trash.”

Enforcement crucial 

While the existing federal rules took effect in 2015, the EPA did very little to enforce them until last year, when it issued a number of findings and decisions. Among these, the EPA denied some companies’ requests for extensions to an April 2021 deadline for unlined ponds covered by the rules to stop accepting waste. 

The evening before the Chicago hearing, Waukegan residents testified on the EPA’s proposal to deny a request to extend that deadline from plant owner Midwest Generation, a subsidiary of NRG.

While residents support the proposed denial of the extension, they are frustrated that the company has already been allowed to dump for more than two years beyond the deadline. The coal plant closed last summer, but a diesel peaker plant still operates on the site, and residents are concerned that waste from that plant is going into the unlined pond. 

NRG spokesperson Dave Schrader said in a statement: “Midwest Generation remains committed to operating its Waukegan facility safely and in compliance with federal and State of Illinois CCR (coal combustion residual) rules and regulations. Midwest Generation disagrees with the U.S. EPA’s recent proposed determination. The mitigation efforts Midwest Generation has implemented at its Waukegan facility were certified compliant by outside experts and are approved methods of monitoring and protecting groundwater. Midwest Generation has ceased burning coal to generate electricity at Waukegan but continues to manage stormwater. Further, Midwest Generation ceased placing CCR in the East Pond when it ceased burning coal. The pond is only used for stormwater and process water unrelated to CCR.”

Waukegan residents testifying at the Chicago hearing noted that they have been demanding a “just transition” including coal ash removal for a decade, with little response from EPA or NRG.

“Publicly available tests conducted independently confirm there is no risk to human health or the environment from the ash ponds or historic ash area,” Schrader said. “Removing the coal ash, however, would pose unnecessary safety and environmental risks to the community, create significant traffic disruptions, and could take far longer than closing in place.”

Advocates say the EPA needs to not only expand the rules to cover all coal ash dumps, but aggressively enforce its rules.

“Rules are awesome, but without enforcement, companies will keep doing what they’ve been doing,” Waukegan resident Eddie Flores, co-chair of Clean Power Lake County, told the Energy News Network. “If the EPA doesn’t act, companies will just ignore what the EPA says.”

Kari Lydersen has written for the Energy News Network since January 2011. She is an author and journalist who worked for the Washington Post’s Midwest bureau from 1997 through 2009. Her work has also appeared in the New York Times, Chicago News Cooperative, Chicago Reader and other publications. Based in Chicago, Kari covers Illinois, Wisconsin and Indiana as well as environmental justice topics.

At rules hearing, U.S. EPA hears human toll of unaddressed coal ash pollution is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

Wisconsin solar advocates are applauding a recent decision by state regulators and hoping it is a sign the industry may finally get clarity on the legality of third-party-owned solar in the state. 

Meanwhile, a bill has been introduced to allow third-party-owned community solar, and advocates say that solar developers are already negotiating deals with farmers to launch such projects.

The issue is a murky one in Wisconsin, where utilities have resisted efforts by solar companies to build and operate arrays on behalf of nonprofit entities that can’t take advantage of tax credits, or customers who don’t have the upfront capital to purchase an array on their own. Statutes have been unclear on what is and isn’t allowed.

On March 16, the Public Service Commission denied utility WEC Energy’s request to expand its Solar Now program, wherein the utility leases roof space to install solar panels it owns. Solar proponents have criticized the program since its launch as a pilot in 2018, saying it gives utilities an unfair advantage in the rooftop solar market and also gives them an incentive to chill private solar development, including third-party-owned arrays. 

In pushing for Solar Now, utilities might be “trying to corner that part of the business before [third-party-owned solar] opens up,” said Citizens Utility Board Executive Director Tom Content. 

The Inflation Reduction Act reduces the need for city agencies and churches to use third-party ownership to tap tax credits, since it allows for such credits to be paid out directly as cash. But third-party ownership is still an important option for customers that can’t afford the upfront costs of solar. 

The Solar Now decision was among the first under new leadership at the three-person Public Service Commission, which now consists entirely of appointees of Democratic Gov. Tony Evers. Former commission Chair Ellen Nowak, who was appointed by former Republican Gov. Scott Walker, retired on March 1. 

Critics had long complained that the commission was too quick to grant the wishes of utilities, especially powerful WEC, the parent company of We Energies and Wisconsin Public Service Corp. WEC had sought to expand its existing Solar Now program — dubbed “rent-a-roof” by critics — in We Energies territory in the Milwaukee area, while also launching a new such program in Wisconsin Public Service’s northeastern Wisconsin territory. 

New commission Chair Rebecca Valcq and commissioner Tyler Huebner — former executive director of clean energy group Renew Wisconsin — turned down WEC’s request, agreeing with advocates’ arguments that it would give the utility an unfair market edge and also force all ratepayers to pick up the tab for relatively small solar installations that would be less cost-effective than larger utility-scale solar.

“Especially with the proliferation of programs coming from the federal government under the [Inflation Reduction Act] and under the Bipartisan Infrastructure Law, I get concerned when utilities use their monopoly position to gain an advantage in what should be the private marketplace,” Valcq said during the commission’s hearing.

History of controversy

Valcq was a commissioner in 2018 when the Solar Now pilot was originally proposed, and dissented when the other two then-commissioners approved the program. 

Recently appointed commissioner Summer Strand supported the utility request to expand Solar Now, arguing there is demand for the program. Huebner said he would consider supporting a limited form of Solar Now to provide arrays where no private developer wants to work. 

“These projects are placed in locations that generally will not be used for anything else, including brownfields,” WEC spokesperson Brendan Conway told the Energy News Network. “We are surprised our popular Solar Now program is not being allowed by the commission to grow. We have strong interest from customers across the state — including governments, schools, community groups and large companies — looking to join the program and expand their access to renewable energy and meet their clean energy goals.”

The city of Milwaukee has been locked in a legal stand-off with We Energies over the utility’s refusal to interconnect a third-party-owned array. Meanwhile, Milwaukee has a 2.25-megawatt Solar Now installation on its landfill and filed testimony in favor of Solar Now. 

But the city attorney lamented in testimony that lease payments from the utility have been lowered since the city chose to use the solar power to meet its own clean energy goals — rather than allowing the utility to tap the array’s renewable energy credits. 

The city complained that the utility did not provide proof that the credits associated with the landfill array had been retired, which would be necessary to ensure the solar power was not being double-counted for clean energy targets. 

Third-party potential

We Energies had pushed its Solar Now program particularly as an alternative to requests from the city of Milwaukee and other entities for third-party-owned solar, wherein a private developer installs and owns a solar array, reaps the tax credits, and passes the savings along to municipal agencies, businesses or residents.

Solar advocates and customers have long been asking the Public Service Commission and state lawmakers to confirm that such third-party-owned installations are legal in Wisconsin. We Energies has argued they violate the utility’s exclusive right to provide power as a regulated monopoly.

The Midwest Renewable Energy Association has a petition pending before the commission demanding affirmation that third-party solar is legal. Last year, the commission ruled in favor of a request by advocacy group Vote Solar to allow one family to install third-party-owned solar. Advocates saw that ruling as encouraging but very limited in scope, applying just to that case. 

Midwest Renewable Energy Association Executive Director Nick Hylla said the commission’s decision on Solar Now indicates its support for the concept of a private distributed solar market, and such a market needs third-party ownership in order to thrive. 

“It is clear from the chair’s comments that she was concerned about the utility expanding their monopoly influence into a historically competitive market,” Hylla said. “The commission is keeping the utilities focused on what they are built to do: build large-scale assets. And, to keep the [distributed energy resource] market serving buildings open and competitive.”

Solar Now drawbacks 

The Solar Now proposals failed in part because of an argument similar to what utilities have deployed to block the proliferation of privately owned distributed solar. 

Utilities have long maintained that customers with solar are forcing customers without solar to pay a bigger portion of costs to maintain the grid, since those with solar are paying less into the system. These arguments have been widely challenged by experts who point out that solar makes the grid more efficient and resilient for everyone. 

Meanwhile, critics of Solar Now argued that it forces all ratepayers to subsidize solar installations, even if they don’t benefit from the energy or lease payments. As with most investments, the utility can charge ratepayers to recoup the costs for Solar Now arrays, plus a profit. 

“No talk of cross subsidization or equity from the utility here,” solar designer Michael Barnett wrote in his testimony. “The amount of utility hypocrisy in this language is laughable. The message is utilities don’t mind cross subsidization if they can benefit from it.” 

In testimony before the commission, the utility said Solar Now installations would be 1% to 3% more expensive than “equivalent” utility-scale projects. Barnett filed testimony with calculations showing it could be nine to 15 times more expensive.

The comparison to utility-scale is not a concern for third-party-owned solar — community or rooftop — since ratepayers across the territory are not forced to pick up the tab. Rather, private developers generally absorb any financial risk, landowners or property owners collect lease payments, and any savings flow to community solar subscribers or entities with third-party-owned arrays. 

Community solar

While third-party ownership has been considered an important benefit for distributed solar arrays owned by residents or businesses, it is a necessity for community solar, with the exception of community solar owned directly by a utility. Bills introduced last month (LRB-0767/LRB-2499) would affirm that third-party-owned community solar is legal.

In such situations, solar developers sign deals with landowners — often farmers — to develop solar arrays on their land, and the developers solicit subscribers who get the clean energy.

A similar bill was introduced in 2021. Matt Hargarten, vice president of campaigns for the national Coalition for Community Solar Access, said that it normally takes such complicated bills several sessions to gain traction, and backers are hopeful it will pass this session. The new bill, like the 2021 one, is spearheaded by Republican legislators.

The powerful state farm bureau has endorsed the bill, noting in a statement that community solar can be more lucrative and less disruptive for farmers than larger utility-scale arrays.

“We’ve got an even bigger coalition than we’ve had before,” Hargarten said. “The farm bureau is now in full-throated support of community solar. They see it as an option for their farmers to put some type of solar on their land, but to keep land in production, and keep family farms in the state of Wisconsin.” 

Associations of builders and grocers are also backing the bill. Hargarten noted that large grocery or big box stores might host community solar installations on their rooftops.

Hargarten said that solar developers are already entering preliminary agreements — including payments — with farmers to lease their land, should the bill pass. If the bill becomes law, the Public Service Commission would set billing rates and other policies related to community solar in Wisconsin.

Utilities can and sometimes do develop community solar, and in testimony in the Solar Now case, Renew Wisconsin called on the utility to consider this.

“Community solar is a program alternative that could be made available to a larger group of customers, including renters and other residential customers, businesses with limited land or rooftop space, and low-income customers,” Renew’s testimony said.

But advocates generally prefer privately developed community solar.

“Where community solar has grown it’s through legislation that enables third-party” ownership, Hargarten said. “Third-party allows for innovation [and] it brings in outside money that’s not necessarily on the backs of ratepayers; you’re going to be more quickly developing solar.”

Advocates say conditions may be improving for rooftop solar in Wisconsin is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.