Renew Wisconsin v. Public Service Commission of Wisconsin

The Public Service Commission of Wisconsin (the commission) (defendant) was a state agency responsible for regulating the state’s public utilities. One regulated utility, the Wisconsin Public Service Corporation (WPSC) (defendant), provided electricity services to Wisconsin customers. WPSC offered the Pg-4 tariff, a net-energy billing program that allowed customers who generated their own electricity from renewable resources to offset their monthly electric consumption and occasionally sell excess electricity back to WPSC’s system. Customers’ net energy use for purposes of the tariff was calculated over a monthly netting period. The Pg-4 tariff was originally available to customers with generation systems up to 20 kilowatts (kW). However, in 2011, the commission increased the generation-system capacity limit to 100 kW. In March 2013, WPSC asked the commission to reduce the generation-system capacity limit for the Pg-4 tariff back to 20 kW. Renew Wisconsin (Renew) (plaintiff), a nonprofit that represented Wisconsin renewable-energy companies and individual electric ratepayers, intervened in the commission proceedings. Renew asked the commission to maintain the 100-kW limit and use an annual netting period to calculate customers’ net-energy use for purposes of the tariff rather than the monthly netting period. The commission issued a final decision reducing the capacity limit to 20 kW and maintaining the monthly netting period. The commission explained that it had taken a conservative approach to the tariff because of concerns about WPSC’s ability to recover fixed costs from net-metering customers. Specifically, the commission expressed concern that customers who generated a substantial amount of electricity could receive credits under the Pg-4 tariff that would offset not only their monthly variable electricity-usage charge, but also WPSC’s fixed costs of providing service, which were built into the retail electricity rate. WPSC illustrated this concern with evidence that at least one self-generating customer had generated enough electricity to reduce the customer’s entire electric bill to $0.53. A commission policy analyst had estimated that fixed-cost-recovery losses could be between $93,000 and $117,000 annually. The commission was also concerned that customers who purchased more of their electricity from WPSC could end up subsidizing those net-metering customers who purchased less. The commission thus decided to limit the tariff to small generators and keep the monthly netting period. Renew sought judicial review of the commission’s decision, asserting that the decision lacked a sufficient explanation and factual basis. The trial court agreed and remanded the matter for further factual findings. The commission and WPSC appealed.