## Facts

- Minnesota’s community solar garden statute required Northern States Power Company d/b/a Xcel Energy (Xcel) to offer a community solar garden (CSG) program that allows multiple customers to subscribe to a shared solar facility and receive bill credits tied to the facility’s production.
- The statute set key CSG parameters, including limits on garden size (up to 1 MW), minimum subscriber count (at least five), a cap on any one subscriber’s share (no more than 40%), and a restriction tying subscription size to a customer’s historical usage.
- The statute required Xcel to purchase all electricity generated by qualifying CSGs and to credit subscribers at the “applicable retail rate” unless and until the Minnesota Public Utilities Commission (Commission) approved a “value-of-solar” (VOS) rate.
- The statute also required Xcel to offer to purchase renewable-energy credits associated with CSG production under specified terms.
- Xcel petitioned the Commission for approval of its proposed CSG program. The Commission addressed program design and compensation questions through multiple orders and stakeholder comments in the same docket.
- As the program developed, parties disputed whether subscriber bill credits should move from the applicable retail rate to a VOS-based rate, and whether the VOS methodology needed changes before it could be used for CSG compensation.
- By the time of the September 6, 2016 order, the Commission had not approved a VOS rate for purposes of CSG subscriber credits, and subscribers were receiving credits at the applicable retail rate.
- In the September 6, 2016 order, the Commission determined that it needed additional operating experience with the CSG program before changing the rate structure from retail-rate credits to a VOS-based credit.

## Issues

1. Whether the Commission could decline, at that time, to approve a VOS rate for Xcel’s community solar garden program and instead require continued use of the applicable retail rate for subscriber bill credits.
2. Whether the Commission acted within its statutory authority in concluding that additional experience with the CSG program was needed before changing the bill-credit rate structure.

## Decision

- The Commission declined to implement a VOS-based bill credit for the CSG program in the September 6, 2016 order.
- The Commission required Xcel to continue providing CSG subscriber bill credits at the applicable retail rate because a VOS rate had not been approved.
- The Commission explained that additional experience with the program was needed before making rate-structure changes and left the possibility of later VOS action for a future record.

## Legal Principles

- Under Minnesota’s community solar garden statute, CSG subscriber bill credits remain at the applicable retail rate unless and until the Commission approves a VOS rate.
- The Commission has discretion to postpone approval of a VOS rate when it reasonably finds that the program’s early stage and limited operating history do not yet support a shift in compensation methodology.
- A decision to maintain the statutory default compensation rate (retail-rate credits) is within the Commission’s authority when the Commission determines that further program experience is needed before making rate changes.

## Conclusion

The Minnesota Public Utilities Commission acted within its authority by delaying adoption of a value-of-solar rate for Xcel’s community solar garden program and requiring Xcel to continue crediting subscribers at the applicable retail rate until the Commission approves a VOS rate on a more developed record.


Northern States Power Co. v. Minnesota Public Utilities Commission, 2016 WL 4701453 (Minn. P.U.C. Sept. 6, 2016)