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PSC approves Sturgeon Bay Utilities parallel‑generation tariff changes with compliance condition
Summary
The Public Service Commission approved modifications to Sturgeon Bay Utilities’ parallel generation tariffs, allowing buyback rates tied to WPPI avoided costs, a 5 MW cap for PGS 2, seasonal LMP treatment, a 10‑year legacy period for existing customers, and an annual compliance filing to verify WPPI’s commitment to purchase surplus generation.
The Public Service Commission on June 19, 2025 approved revisions to Sturgeon Bay Utilities’ parallel generation tariffs that set buyback rates tied to the utility’s wholesale provider, require seasonal price treatment, and add a compliance filing to confirm purchases of surplus generation.
Chair Strand said the commission reopened the record to obtain additional information and that the applicant’s supplemental submissions convinced commissioners that WPPI’s avoided costs are a reasonable proxy for Sturgeon Bay’s avoided costs. Commissioner Nieto stated she would be recused from this docket.
Sturgeon Bay Utilities, a municipally owned utility serving about 9,800 customers, sought to revise two parallel‑generation tariffs: PGS 1 (monthly net metering) and PGS 2 (larger parallel generation). Commissioners approved a modified approach:
- For PGS 1, the buyback for excess monthly generation will be calculated using historical day‑ahead locational marginal price (LMP) averages, with the commission directing that the LMP averages vary by season (on‑peak/off‑peak and seasonal weighting).
- Legacy treatment for existing PGS 1 customers will run for 10 years beginning on the date of issuance of the final order in this docket. Commissioners rejected backdating to 2019 and favored a uniform 10‑year legacy window tied to the final decision date.
- For PGS 2, the commission approved a 5‑megawatt system size cap consistent with the applicant’s federal waiver and FERC rules.
- Commissioners accepted the applicant’s proposal to use WPPI’s avoided cost as the basis for avoided‑energy and avoided‑capacity values, subject to specified edits: energy buybacks will use historical LMP averages (with seasonal treatment) and capacity for front‑of‑meter resources will be priced at 100% of net cost of new entry (net CONE) for a 10‑year contract. The commission declined to adopt a 20‑year contract option with an early‑termination penalty.
Chair Strand said the record now contains commitments from WPPI staff that WPPI will purchase surplus power from Sturgeon Bay’s nonlegacy customer‑owned generation going forward; the commission added a compliance requirement to ensure transparency and continued adherence to that commitment.
Under the approved condition, Sturgeon Bay must file an annual compliance filing, beginning one year after the final decision, that documents buyback transactions consistent with commitments in the record. The Division of Energy Resources Administrator (DARA) will review the filing; the administrator may extend the compliance requirement or elevate an apparent noncompliance to the commission for further action. The compliance requirement will sunset at the conclusion of Sturgeon Bay’s next rate case unless extended by DARA.
Commissioner Hawkins, who led the decision matrix discussion, said the record is now ‘‘adequate’’ and that seasonal capacity prices and MISO planning values should be reflected in annual updates. Commission members voted to approve the tariff modifications and the added compliance condition. Commissioner Nieto was recused from consideration of this docket.
The commission’s action sets a precedent for municipal utilities that often replicate WPPI‑based rate designs; commissioners emphasized the need for clear, evidence‑based records because similar designs may be filed by other utilities in the future.
