Updated: May 4
Neighborhood Improvement Districts Can Create New Revenue and increase Sustainability
In 2021, the City of Milwaukee started generating revenue by using above-ground portions of a 44-acre site for renewable energy sources. We Energies' Solar Now program now leases the property for approximately $100,000 annually and operates a 2.25-megawatt solar farm on the site. Alderman Bauman even strategically delayed the lease's signing to earn the city an additional $13,000 annually after a regulatory authority issued a rate adjustment. “Very good,” said Alderman Robert Bauman. “So pure profit?” asked Ald. Russell W. Stamper, II. “Good job.”
But why stop at just one location? Why not implement sustainability projects throughout Milwaukee neighborhoods to generate revenue while addressing other sustainability and resilience issues? One idea is to identify land in each neighborhood improvement district (NID) and implement the Solar Now program in each district over the next 3 to 5 years. These renewable energy investments would be in line with the State of Wisconsin's Sustainability plan and 2030 goals.
At an easement price of $50,000 per megawatt produced and requiring 4-7 acres for a megawatt solar farm. NIDs could identify and lease land in their districts for solar arrays to generate unrestricted passive income annually for their neighborhood programs and services. This approach would create workforce and small business contracting opportunities in Milwaukee, particularly targeting the African American community for reasons as highlighted in Dr. Mark Levine's wellbeing report and the Wisconsin Region of Choice report, see below.
Assuming the Milwaukee Neighborhood Improvement Districts (NIDs) could lease out a combined 80 to 100 acres of land to We Energies for renewable energy systems, it is possible for them to generate 20 megawatts of energy.
With a lease term of 25 or more years charging $50,000 per megawatt produced for easement prices, the NIDs could potentially earn $1 million annually. This would be a considerable contribution to the Neighborhood Improvement Districts and provide long-term financial stability with the extended lease terms.
The approach that Milwaukee NID(s) in partnership with We Energies can use to generate and increase operational revenue (click arrow).
20 MW is the potential energy generated by leasing 80-100 acres of land to We Energies
80-100 acres is an estimated combined land area necessary to be leased by Milwaukee Neighborhood Improvement Districts (NIDs) to generate 1M in annual revenue.
Easement price is $50,000 per megawatt produced.
Lease term is 25 or more years.
Therefore, the gross revenue earned annually can be calculated as:
Gross Revenue = easement price x 20MW x lease term / or
Gross Revenue = $50,000 x 20MW x 25 = $25,000,000 (over 25 years), 1M per year in annual revenue.
The WE Energies PIPP / LIFT program serves the same people in Neighborhood Improvement Districts (NID's) - taxpayers who are also impacted by the program. These NID's are located in neighborhoods where sustainability projects can be implemented, and the Solar Now project is a proven concept that has already been mechanized by the city, with proven profitability. There is a total of 10 NID's in Milwaukee.
NIDs can use this approach to transform brownfields, unused Milwaukee Public School properties, repurposed railways, and unused big box retail locations into valuable assets for the community, injecting new life into unused land areas. Through such efforts, NIDs can collaborate with communities to enhance Milwaukee's wellbeing, environmental commitment, and economic future.
We Energies is collaborating on strategies to address energy burden with Walnut Way as a result of the 2022 rate case, and the Wisconsin Public Service Commission has recently ordered the company to participate in creating a Percentage of Income Payment or Alternative Payment Program. These developments have provided an opportunity for We Energies to explore additional ways to support economic mobility and address energy burden by creating workforce and small business contracting opportunities within Milwaukee.
The current activity in utility regulation has created the conditions to address equity issues that have been long-standing. In We Energies most recent requests for tariff increases to install more solar arrays, they were denied approval by the Wisconsin Public Service Commission. The WPSC denied the tariff increase due to concerns over potential costs to non-participating customers. We Energies has stated that it will continue to promote renewable energy and work with the WPSC to find solutions to their concerns.
Although the tariff was denied, this is a different value proposition to be considered by the WPSC, involving neighborhood level sustainability. Strategies that include equity and inclusive approaches to economic development could present an appealing approach to the Wisconsin Public Service Commission for approval.
This opens up opportunities for increased and targeted investment in communities where energy burden is the highest, providing the highest possibility of impact on the environment, society, and the economy.
While feasibility studies and renewable energy site assessments are necessary, the fact remains that federal resources are available to 501c3's and the municipality to take on these projects.
Milwaukee is well-positioned with its utility, We Energies, to collectively create new opportunities in Milwaukee, centered on an intentional equity approach that addresses well-being and quality of life issues in targeted communities. These would not be one-size-fits-all strategies but impacted community strategies shaped and shared by all.
"Milwaukee Sustainability Plan." City of Milwaukee, https://city.milwaukee.gov/ImageLibrary/Groups/ccCouncil/Sustainability/Milwaukee-Sustainability-Plan.pdf.