by jboullion | Jul 11, 2011 | Uncategorized
Dramatic Slowdown in Market Activity Anticipated
By Michael Vickerman
July 11, 2011
What started out as an opening salvo from the Walker Administration to shackle large-scale wind projects has in six months turned into a systematic campaign to dismantle the state policies that support renewable energy development. Joining the executive and legislative branches in pursuing policy rollbacks and/or funding cutbacks against renewables are various utilities and, surprisingly, Focus on Energy, Wisconsin’s ratepayer-funded energy efficiency and renewable programs.
Since January 1st, Wisconsin has seen a series of assaults against utility-scale projects and smaller renewable systems serving both residences and businesses. These include the following actions:
- The Legislature suspended PSC 128, the statewide rule developed by the Public Service Commission last year in response to a law passed by the Legislature in 2009 ordering the agency to establish uniform standards for permitting wind energy systems. Since the March 1 suspension vote, wind development in Wisconsin has slowed to a standstill.
- The Legislature adopted SB 81, a bill that RENEW Wisconsin describes as the “Outsource Renewable Energy to Canada Act.” SB 81 allows Wisconsin utilities to meet their renewable energy requirements beginning in 2015 with electricity generated from large hydropower plants in other states and Canada. By allowing Wisconsin utilities to become even more dependent on energy imports than they are today, SB 81 turns Wisconsin’s Renewable Energy Standard on its head. Importing large-scale hydropower exports the very dollars that could have been used to harness Wisconsin’s renewable energy resources.
- We Energies, the state’s largest electric utility, abruptly decided in May to walk away from an agreement with RENEW to dedicate $60 million over a 10-year period in support of renewable energy development in its territory. The decision came in the sixth year of this program. We Energies plans to reallocate the unspent dollars (totaling about $27 million) to general operations.
- Green Bay-based Wisconsin Public Service (WPS) instituted in April a new net energy policy designed to discourage new customer-sited renewable energy systems. Until recently WPS had been paying its customers the full retail rate for electricity that flows back on the wires, which is now about 12 cents/kWh. But under the new rate, WPS only pays three cents/kWh for electricity exported to the grid. Moreover, the utility calculates the net each month, which penalizes customers whose loads vary significantly depending on seasonal factors. Right now, the new policy only covers systems installed after March 2011, but WPS has said that it plans to apply that rate to older systems effective January 2013.
- In its deliberations on the biennial state budget passed in June, the Legislature appended a rider to tie Focus on Energy’s annual budget to a percentage (1.2% of gross utility revenues). This action will mean a cut of $20 million in the program’s 2012 budget relative to this year’s allocation of $120 million. The Focus on Energy program provides grants and cash-back awards supporting customer investments in solar electric, solar thermal systems, small wind, biogas and biomass energy systems.
- Last, but certainly not least, as of July 1, Focus on Energy stopped accepting applications for business program incentives to help customers install renewable energy systems. These incentives, which average about $7 million per year, had been available since 2002 to businesses, farms, schools, local governments and other nonprofit customers. It is not clear when these incentives will be resumed and in what quantity.
This one-two punch of policy rollbacks and funding cutbacks has cast a pall over the state’s renewable energy marketplace. At this year’s Energy Fair in Custer, Wisconsin, the prevailing mood of contractors and exhibitors was one of bewilderment tinged with anger. It is dawning on these companies that their state, which once took pride in its efforts to nurture a thriving renewable energy market, is becoming an inhospitable place to do business. The transformation is occurring with stunning speed; no business is likely to be spared from this abrupt reversal of fortune, which will hit home soon and continue for several months, if not years.
At this moment, however, the Wisconsin renewable energy landscape is humming with installation activity. New wind turbines are soaring above cornfields in Columbia County, where construction crews and operating engineers from Appleton-based Boldt Construction and Brownsville-based Michels Wind Energy assemble what will become Wisconsin’s largest wind generation facility. The towers for the Glacier Hills wind energy project are being fabricated at Tower Tech in Manitowoc. Solar hot water systems now crown the rooftops of new apartment and university buildings, while solar PV panels mounted on 14-foot-tall poles rise above a farm field in Dane County to power Epic Systems’ ground source heat pump system. A cranberry company in Monroe County is about to become the second of its kind to rely on a pair of small wind turbines for its electrical needs. Meanwhile, all across Wisconsin one can find contractors building this year’s crop of bioenergy systems that convert the effluent from dairy farms, cheese producers and wastewater treatment plants into a baseload source of electricity.
Indeed, this wave of projects, fueled principally by funding commitments made in previous years and the early part of this year, should keep contractors and installers busy through the end of 2011. Though an observer unfamiliar with this year’s travails might be deceived by this show of vitality, both installers and advocates know that this activity can’t be sustained for long without a fresh supply of oxygen in the form of policy and funding initiatives. But until state government recognizes the folly of its war against renewable energy and changes course on energy policy, the rollbacks of 2011 will suck much of the oxygen out of next year’s renewable energy marketplace, setting it up for significant contraction in the years that follow.
How Wisconsin benefits from shrinking its renewable energy business community and becoming even more dependent on finite supplies of fossil energy imported from afar is a question worth posing to our political leaders. In our view, that approach is guaranteed to turn Wisconsin into an economic backwater. Is this what they hope to achieve? Probably not. But the toll on the state goes beyond the jobs that weren’t created, the investments from overseas that went to other states, and the tax revenues that failed to materialize as projected.
An even bigger casualty of these rollbacks is Wisconsin’s ability to project itself as a center of consistency and stability, a place where policy changes affecting businesses occur gradually and over time. Not long ago, Wisconsin political leaders were capable of working on complex legislative matters in a low-key and bipartisan manner. An example of that is the Energy Efficiency and Renewables Law (2005 Act 141) signed into law in March 2006, which increased Wisconsin’s Renewable Energy Standard to 10% by 2015 and protected Focus on Energy from future budget raids. That law created what seemed at the time to be a durable framework for enabling renewable energy resources to play an expanded role in the state’s energy future.
However, it is now painfully evident that the political consensus that created the five-year-old law has evaporated. The resulting vacuum has emboldened incoming legislators to fix their crosshairs on the policy mechanisms supporting investment in renewable energy. With the active assistance of politically powerful interests like the Wisconsin Industrial Energy Group, these legislators are now attacking Wisconsin’s pro-renewable energy policies in a manner resembling a wave of Formosan termites going through a house.
What has happened to Wisconsin’s energy policy here is a microcosm of the radically polarized political dynamic that has, unfortunately, become “the new normal” in this state. In this environment, confrontation is celebrated and compromise is shunned. Politics in Wisconsin has become a roller-coaster ride that is heavy on the sharp turns and violent dives, and light on the straightaways and gentle grades. And, with the Senate recall elections this summer and the virtual certainty of a gubernatorial recall election in the offing, this dynamic is not going away any time soon.
Needless to say, this volatility makes long-range financial commitments to upgrading the state’s energy infrastructure a challenge if not an impossibility. The suspension of the state’s wind siting rule, for example, upended a deliberate and multiyear effort to build predictability and certainty into the permitting process. With the rule in abeyance, what wind developers now face amounts to a random walk through a minefield. Small wonder that many of the developers who were active here three years ago have migrated to less explosive pastures. Indeed, high-profile rollbacks like these give the state an unwelcome reputation as being famously difficult to do business in.
Amazingly enough, despite the onslaught from political leaders and certain utilities, public support for renewable energy has held strong, according to a St. Norbert College poll conducted between April 11 and April 18 for Wisconsin Public Radio. More than three-quarters of the respondents favored additional investments in windpower, even if such expenditures would increase monthly electric bills. The rankings for each resource surveyed were: wind (77%), hydropower (60%), biomass (54%), natural gas (39%), nuclear (27%), and coal (19%). The results suggest that the hostility that the Walker Administration and the Legislature have shown to the renewable energy business community is completely out of step with the public.
Along with many other organizations and individuals, RENEW Wisconsin helped build public awareness on the value of renewable energy for jobs and energy self-sufficiency. Now in its 20th year, RENEW Wisconsin finds itself vigorously defending the many policies and practices that made Wisconsin a regional leader in the use of its native renewable energy resources. Though the future is fraught with challenges and uncertainties, about one thing we can be certain: the assaults and policy swings that come our way will not change either the citizen consensus or RENEW Wisconsin’s commitment to a future based on clean, local and sustainable energy.
by jboullion | Jul 6, 2011 | Uncategorized
From an article by Tom Content in the Milwaukee Journal Sentinel:
Solar panels produced by Helios Solar Works of Milwaukee will be used by the U.S. Army, the FBI and other government customers under a strategic partnership announced Tuesday by Arista Power Inc.
Arista is a manufacturer of wind turbines and renewable energy storage systems based in Rochester, N.Y.
Financial terms of the partnership weren’t disclosed.
Helios will supply Arista with panels and will refer solar business opportunities to Arista. Arista has agreed to distribute Helios products to the military.
“One of the major benefits of our high-performance modules is their flexibility, which makes it possible to design systems that satisfy a variety of needs, from residential, commercial and governmental applications,” said Steve Ostrenga, Helios chief executive. “We view this as a perfect fit with Arista Power’s products, which are scalable and can be adapted to serve a variety of markets.”
The announcement comes as Helios is seeing demand for made-in-Milwaukee solar panels from the military, Ostrenga said in an interview. Helios is making panels for military bases in Arkansas, New York and Virginia.
“We’re getting a lot of movement in the military because the military has made a stance that, because of energy security, they want to be energy independent,” he said.
A large order for a military base in San Diego began production this week.
As a result of the demand, the company recently added a second shift, and employment is now at about 30 people, Ostrenga said. Plans are in the works for a third shift.
The Department of Defense released an energy strategy last month that incorporates greener technologies as a way to protect soldiers. Thousands of U.S. servicemen have lost their lives in attacks on fuel and other supply convoys in Iraq and Afghanistan.
“As long as U.S. forces rely on large volumes of energy, particularly petroleum-based fuels, the vulnerability and volatility of supplies will continue to raise risks and costs for the armed forces,” the Pentagon said in a report to Congress.
by jboullion | Jun 29, 2011 | Uncategorized
From a commentary by Jeff Anthony, American Wind Energy Association, on BizTimes.com:
The Wisconsin Assembly recently passed a bill that would enable hydroelectric power from Manitoba, Canada, to be shipped to Wisconsin to meet the state’s 2006 renewable energy law requiring 10 percent of the state’s electricity to come from renewable energy by the year 2015.
If enacted into law, the effect of the Manitoba Hydro Bill will be to ship jobs to Canada and reduce Wisconsin’s ability to meet its clean energy requirement by building more homegrown Wisconsin energy projects.
One of the bill’s sponsors, State Sen. Frank Lasee (R-De Pere), was quoted saying, “This new law will keep electric bills from going up by making it more affordable for utilities to meet green energy mandates.”
Unfortunately, he was mistaken in assuming that other forms of “green energy” will raise electricity rates in the state. If he had gotten his facts straight, he would have found that wind energy costs are at near-record lows, and many utilities in the U.S. are reaping the benefits of lower electricity rates as wind energy expands on their systems. But the facts about wind energy costs, like many other facts, apparently weren’t relevant in the rush to pass this ill-conceived bill.
What Sen. Lasee failed to mention is that his bill will also have a significant impact on Wisconsin by sending good-paying jobs that would otherwise have been created in Wisconsin – to Canada instead.
Sen. Lasee and the other state legislators who voted for the bill would have the state import electricity from Canadian energy projects that use Canadian workers. Today, Wisconsin supports 2,000-3,000 workers in the wind energy industry alone, and the Manitoba Hydro Bill now threatens many of those jobs in Wisconsin.
This is just the latest example of legislative activities that are exporting good-paying, clean energy jobs out of Wisconsin. Why?
At the beginning of the year, another onerous bill was proposed to impose extreme requirements on where Wisconsin wind projects can be located. A few weeks, later a joint committee of the legislature voted to suspend Wind Siting Rules that had been developed through a collaborative, open, and fair process. This rule was suspended by the joint legislative committee on the very day that these far better new rules would have taken effect.
Combined, these actions have jeopardized approximately 700 megawatts of wind projects that were proposed in the state, resulting in the potential loss of $1.8 billion investments and 2 million construction job-hours. And guess what – those 2 million job-hours will not show up in Wisconsin, and will likely move to neighboring states.
So what will be the next step in the “Wisconsin Jobs Export Agenda”?
Well, another piece of anti-clean energy job legislation has emerged, Assembly Bill 146, which would significantly reduce the growth of renewable energy in the state. The Wisconsin clean energy law was originally created to incentivize new renewable energy development and increase fuel diversity. AB 146 would effectively remove that incentive.
by jboullion | Jun 29, 2011 | Uncategorized
From an article by Judy Newman in the Wisconsin State Journal:
Focus on Energy, a statewide program that promotes energy efficiency, is in the midst of big changes: new management by an out-of-state corporation, suspension of a popular rebate program, and sharp funding cuts in the pending state budget.
Nearly 20 people already have lost their jobs, mostly in Madison, as a result of the management change.
Meanwhile, dozens of small Wisconsin businesses that specialize in setting up solar panels and wind turbines fear for their futures because of the slashed allocation and rebate removal.
“It’s a lot of economic activity and jobs in Wisconsin. It’s a lot of energy efficiency, as well,” said Keith Reopelle, policy director for Clean Wisconsin.
Focus on Energy was created in 2001 to provide education, resources and cash incentives to Wisconsin residents and businesses to increase the use of energy-efficient products and systems, from furnaces to solar panels to vending machines.
In the past 10 years, more than 91,000 businesses and more than 1.7 million residents used the program and saved $2.20 for every dollar spent, according to Focus data. . . .
Since taking over Focus on Energy on May 9, one of Shaw’s first decisions, with PSC support, was to suspend payments to businesses that install renewable-energy systems, as of June 30.
Contractors like Seventh Generation Energy Systems were stunned.“It’s pretty devastating,” said James Yockey, chief executive officer. “It probably took out six to 10 projects that we were looking to close … for work in the fall and the coming spring.”
Several of the projects were wind turbines for farmers. “I think the incentives are decisive in people saying yes,” Yockey said . . . .
Program supporters have appealed to Gov. Scott Walker to veto the Focus budget cut, including a letter signed by 124 Wisconsin businesses. As of Friday, there was no word on his response. Walker is scheduled to sign the budget today.
“Cutting Focus on Energy will result in higher electricity bills and fewer jobs,” Randy Johnson, president of U.S. Lamp, a Green Bay energy-efficient lighting design company, said in the letter.
Seventh Generation’s Yockey said he hopes to avoid laying off any of his 16 employees by aiming his business at other states, and that could mean moving the company. “We prefer to be located in Madison but the bottom line is: we’ll see where the business takes us,” he said.
by jboullion | Jun 28, 2011 | Uncategorized
From an article by Judy Newman in the Wisconsin State Journal:
Focus on Energy, a statewide program that promotes energy efficiency, is in the midst of big changes: new management by an out-of-state corporation, suspension of a popular rebate program, and sharp funding cuts in the pending state budget.
Nearly 20 people already have lost their jobs, mostly in Madison, as a result of the management change.
Meanwhile, dozens of small Wisconsin businesses that specialize in setting up solar panels and wind turbines fear for their futures because of the slashed allocation and rebate removal.
“It’s a lot of economic activity and jobs in Wisconsin. It’s a lot of energy efficiency, as well,” said Keith Reopelle, policy director for Clean Wisconsin.
Focus on Energy was created in 2001 to provide education, resources and cash incentives to Wisconsin residents and businesses to increase the use of energy-efficient products and systems, from furnaces to solar panels to vending machines.
In the past 10 years, more than 91,000 businesses and more than 1.7 million residents used the program and saved $2.20 for every dollar spent, according to Focus data. . . .
Since taking over Focus on Energy on May 9, one of Shaw’s first decisions, with PSC support, was to suspend payments to businesses that install renewable-energy systems, as of June 30.
Contractors like Seventh Generation Energy Systems were stunned.“It’s pretty devastating,” said James Yockey, chief executive officer. “It probably took out six to 10 projects that we were looking to close … for work in the fall and the coming spring.”
Several of the projects were wind turbines for farmers. “I think the incentives are decisive in people saying yes,” Yockey said . . . .
Program supporters have appealed to Gov. Scott Walker to veto the Focus budget cut, including a letter signed by 124 Wisconsin businesses. As of Friday, there was no word on his response. Walker is scheduled to sign the budget today.
“Cutting Focus on Energy will result in higher electricity bills and fewer jobs,” Randy Johnson, president of U.S. Lamp, a Green Bay energy-efficient lighting design company, said in the letter.
Seventh Generation’s Yockey said he hopes to avoid laying off any of his 16 employees by aiming his business at other states, and that could mean moving the company. “We prefer to be located in Madison but the bottom line is: we’ll see where the business takes us,” he said.
