SB226: Bill Text

SB226,,1 2023 SENATE BILL 226

April 14, 2023 - Introduced by Senators Stroebel, Cabral-Guevara and Cowles, cosponsored by Representatives Krug, Brooks, Tusler, Gundrum, Rozar, Gustafson, Allen, Binsfeld, Bodden, Maxey, Penterman and Schmidt. Referred to Committee on Utilities and Technology.

SB226,,2 An Act to amend 66.0401 (1m) (intro.) and 76.28 (1) (e) (intro.); and to create 66.0401 (1e) (bd), 66.0401 (1e) (bm), 66.0401 (1s), 196.01 (5) (b) 8. and 196.376 of the statutes; relating to: authorizing community solar programs and granting rule-making authority.

SB226,,3 Analysis by the Legislative Reference Bureau

This bill authorizes the establishment of community solar programs through which retail electric customers of an investor-owned electric utility may subscribe to a community solar facility and receive credits to their electric bills for electricity produced by the facility. Under the bill, entities called subscriber organizations may own or operate community solar facilities, which use solar energy to produce electricity. Retail electric customers may enter into a contract (subscription) with a subscriber organization through which the customers receive credits towards their electric bill based on their subscriptions. A subscriber and the community solar facility to which the subscriber subscribes must be located within the service territory of the same investor-owned electric utility. In addition, a subscriber may not receive an annual value of bill credits that exceeds the subscriber’s average annual electric bill. Also, under the bill, subscribers may not receive any state subsidy for which generating electricity from a renewable energy resource is a criteria for eligibility nor may subscribers receive any payment or other benefit from a tax incremental district.

The bill requires an investor-owned electric utility whose service territory includes subscribers to a community solar facility to credit the electric bills of the subscribers based on their subscriptions. Also, under the bill, at the time that an investor-owned electric utility files tariffs with the Public Service Commission, the investor-owned electric utility must include options in the tariffs that allow subscribers to receive bill credits for subscriptions to community solar facilities. PSC must promulgate rules allowing for establishment of community solar facilities and for subscribers to receive electric bill credits for their subscriptions. PSC must also establish a rate used to calculate the amount of bill credits that subscribers receive, and the rate must be set for each investor-owned electric utility at a reasonably compensatory level that creates a community solar market that is capable of being financed considering the costs and benefits provided by community solar facilities. Under the bill, the PSC’s community solar program rules must also satisfy various other requirements, including that the rules must modify existing interconnection standards, fees, and processes to facilitate interconnection of community solar facilities with the electric distribution grid; allow investor-owned electric utilities to recover costs of applying credits to subscribers’ bills; and require subscriber organizations to maintain proof of financial responsibility ensuring the availability of funds for decommissioning community solar facilities.

The bill also specifies that community solar facilities are subject to the zoning ordinances applicable to the parcels on which they are located. Also under the bill, community solar facilities may not be established in a municipality unless the governing body of the municipality approves the establishment by a two-thirds vote. The bill also subjects the community solar facilities of subscriber organizations to property taxation. Under current law, a person engaged in generating electricity for others is exempt from property taxation but is instead subject to a tax based on gross revenues.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

SB226,,4 The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB226,1 Section 1. 66.0401 (1e) (bd) of the statutes is created to read:

SB226,,6 66.0401 (1e) (bd) “Community solar facility” has the meaning given in s. 196.376 (1) (c).

SB226,2 Section 2. 66.0401 (1e) (bm) of the statutes is created to read:

SB226,,8 66.0401 (1e) (bm) “Municipality” means a city, village, or town.

SB226,3 Section 3. 66.0401 (1m) (intro.) of the statutes is amended to read:

SB226,,10 66.0401 (1m) Authority to restrict systems limited. (intro.) No political subdivision may place any restriction, either directly or in effect, on the installation or use of a wind energy system that is more restrictive than the rules promulgated by the commission under s. 196.378 (4g) (b). No Except as provided in sub. (1s), no political subdivision may place any restriction, either directly or in effect, on the installation or use of a solar energy system, as defined in s. 13.48 (2) (h) 1. g., or a wind energy system, unless the restriction satisfies one of the following conditions:

SB226,4 Section 4. 66.0401 (1s) of the statutes is created to read:

SB226,,12 66.0401 (1s) Regulation of community solar facilities. (a) No community solar facility may be established in a municipality unless the establishment is approved by a two-thirds vote of the governing body of the municipality.

SB226,,13 (b) Community solar facilities are subject to any zoning ordinance applicable to the parcel on which the community solar facility is located. The conditions under s. 66.0401 (1m) do not apply to restrictions on community solar facilities imposed by a zoning ordinance of a political subdivision.

SB226,5 Section 5. 76.28 (1) (e) (intro.) of the statutes is amended to read:

SB226,,15 76.28 (1) (e) (intro.) “Light, heat and power companies” means any person, association, company or corporation, including corporations described in s. 66.0813, qualified wholesale electric companies and transmission companies and except only business enterprises carried on exclusively either for the private use of the person, association, company or corporation engaged in them, or for the private use of a person, association, company or corporation owning a majority of all outstanding capital stock or who control the operation of business enterprises and except electric cooperatives taxed under s. 76.48 and subscriber organizations, as defined in s. 196.376 (1) (i), that engage in any of the following businesses:

SB226,6 Section 6. 196.01 (5) (b) 8. of the statutes is created to read:

SB226,,17 196.01 (5) (b) 8. A subscriber organization, as defined in s. 196.376 (1) (i), if, besides owning or operating a community solar facility, the subscriber organization does not otherwise directly or indirectly provide electricity to the public.

SB226,7 Section 7. 196.376 of the statutes is created to read:

SB226,,19 196.376 Community solar programs. (1) Definitions. In this section:

SB226,,20 (a) “Applicable bill credit rate” means the dollar-per-kilowatt-hour rate determined by the commission that is used to calculate a subscriber’s bill credit.

SB226,,21 (b) “Bill credit” means the monetary value of the electricity in kilowatt-hours generated by the community solar facility allocated to a subscriber to offset that subscriber’s electricity bill.

SB226,,22 (c) “Community solar facility” means a facility that generates electricity by means of a solar photovoltaic device that produces for its subscribers a bill credit for the electricity generated in proportion to the size of their subscription, and to which all of the following apply:

SB226,,23 1. The facility is located on one or more parcels of land and no other community solar facility under the control of the same entity, an affiliated entity, or an entity under common control is located on that land.

SB226,,24 2. At the time the facility is initially approved by the commission, the facility is not located within one mile, measured from the point of interconnection, of a solar facility under the control of the same entity unless all of the following apply:

SB226,,25 a. The other solar facility is a community solar facility and is located on one or more parcels of land created before the effective date of this subd. 2. a. .... [LRB inserts date], at least one of which is contiguous to the parcel of land on which the facility is located.

SB226,,26 b. The other solar facility has its own distinct point of interconnection with the investor-owned electric utility serving the territory where the solar facility is located, including distinct metering and distinct ability to be connected or disconnected to the utility.

SB226,,27 3. The facility has at least 3 subscribers.

SB226,,28 4. The facility generates not more than 5 megawatts of electricity.

SB226,,29 5. No subscriber holds more than a 40 percent interest in the output of the facility.

SB226,,30 6. Not less than 60 percent of the capacity of the facility is subscribed to by subscriptions of not more than 40 kilowatts.

SB226,,31 (d) “Control” means the possession, direct or indirect, of the power to direct the management and policies of an entity through any method.

SB226,,32 (e) “Investor-owned electric utility” means a public utility that sells electricity at retail but does not include a public utility owned and operated by city, village, or town.

SB226,,33 (f) “Non-ministerial permit” means a permit or approval necessary to construct a community solar facility that is not granted based on discretion.

SB226,,34 (g) “Renewable energy credit” means a tradable credit that represents one megawatt hour of electricity produced from a renewable resource.

SB226,,35 (h) “Subscriber” means a retail electric customer of an investor-owned electric utility who satisfies all of the following:

SB226,,36 1. The subscriber owns one or more subscriptions to a community solar facility interconnected with the investor-owned electric utility.

SB226,,37 2. The subscriber is located within the service territory of the investor-owned electric utility where the community solar facility is located.

SB226,,38 (i) “Subscriber organization” means a for-profit or nonprofit entity that owns or operates one or more community solar facilities.

SB226,,39 (j) “Subscription” means a contract between a subscriber and the owner of a community solar facility under which the estimated bill credits of the subscriber do not exceed the average annual bill for the customer account to which the subscription is attributed.

SB226,,40 (2) Administration. (a) An investor-owned electric utility shall provide a bill credit to a subscriber’s subsequent monthly electric bill for the proportional output of a community solar facility attributable to that subscriber. The value of the bill credit for the subscriber shall be calculated by multiplying the subscriber’s portion of the kilowatt-hour electricity production from the community solar facility by the applicable bill credit rate for the subscriber. Any amount of the bill credit that exceeds the subscriber’s monthly bill shall be carried over and applied to the next month’s bill in perpetuity.

SB226,,41 (b) No subscriber may receive a subsidy from this state for which generating electricity from a renewable energy resource is a criteria for eligibility and no subscriber may receive a payment or other benefit from a tax incremental district under s. 66.1105.

SB226,,42 (c) An investor-owned electric utility shall provide bill credits to a community solar facility’s subscribers for electricity generated by the community solar facility for not less than 25 years from the date the community solar facility is first placed into operation.

SB226,,43 (d) A subscriber organization shall, periodically and in a standardized electronic format, provide to the investor-owned electric utility whose service territory includes the location of the subscriber organization’s community solar facility a subscriber list indicating the percentage of generation attributable to each of the investor-owned electric utility’s retail customers who are subscribers to a community solar facility in accordance with the subscriber’s portion of the output of the community solar facility. The investor-owned electric utility shall create a platform for the subscriber organization to periodically communicate updates to its subscriber list to reflect canceling subscribers and new subscribers. The investor-owned electric utility shall apply bill credits to the bills of subscribers within one billing cycle following the cycle during which the energy earning the bill credits is generated by the community solar facility.

SB226,,44 (e) An investor-owned electric utility shall, on a monthly basis and in a standardized electronic format, provide to a subscriber organization having a community solar facility within the investor-owned electric utility’s service territory a report indicating the total value of bill credits generated by the subscriber organization’s community solar facility in the prior month as well as the amount of the bill credit applied to each subscriber.

SB226,,45 (f) A subscriber organization may accumulate bill credits if all of the electricity generated by a community solar facility is not allocated to subscribers in a given month. On an annual basis, the subscriber organization shall furnish to the investor-owned electric utility whose service territory includes the location of the subscriber organization’s community solar facility instructions for distributing accumulated bill credits to subscribers. The investor-owned electric utility shall pay accumulated bill credits to a subscriber based on the subscriber’s applicable bill credit rate determined by the commission. If accumulated bill credits are not allocated to a subscriber within 2 years of being accumulated, the investor-owned electric utility shall purchase the credits by paying a wholesale dollar-per-kilowatt-hour rate for the kilowatt-hour electricity production associated with the accumulated bill credits.

SB226,,46 (g) Any renewable energy credits created from a community solar facility’s production of electricity are the property of the subscriber organization that owns or operates the community solar facility. The subscriber organization may sell, accumulate, retire, or distribute to subscribers the subscriber organization’s renewable energy credits.

SB226,,47 (3) Commission; duties; rules. (a) The commission shall promulgate rules allowing for establishment of community solar facilities and for subscribers to receive bill credits.

SB226,,48 (b) At the time that an investor-owned electric utility files tariffs with the commission, the investor-owned electric utility shall include options in the tariffs that allow subscribers to receive bill credits for the subscriber’s electricity bill.

SB226,,49 (c) The commission shall establish the applicable bill credit rate for each investor-owned electric utility at a reasonably compensatory level that creates a community solar market that is capable of being financed considering, among other things, the costs and benefits provided by community solar facilities participating in the program.

SB226,,50 (d) The rules promulgated under par. (a) shall do all of the following:

SB226,,51 1. Reasonably allow for the creation and financing of community solar facilities.

SB226,,52 2. Allow all customer classes to participate as subscribers to a community solar facility, and ensure participation opportunities for all customer classes.