by jboullion | Aug 23, 2011 | Uncategorized
From the testimony of RENEW presented by Michael Vickerman, who draws attention to the fact that We Energies is trying to defund its $6 million/year renewable energy development program without any justification. In fact We Energies doesn’t say anything about their actions. RENEW asks the PSC not to sanction this sleight of hand maneuver:
Q. What is the purpose of your testimony?
A. The purpose of my testimony is to discuss the May 2011 decision by We Energies to cancel a 10-year, $60 million commitment to support renewable energy development in its service territory. [***BEGIN CONFIDENTIAL***] [***END CONFIDENTIAL***] (Exhibit __ (MJV-1)).
My testimony includes a recommendation to the Commission that it not allow We Energies to reallocate in 2012 the $6 million per year it had committed to spend on renewable energy development activities for other purposes. [***BEGIN CONFIDENTIAL***] [***END CONFIDENTIAL***]
Q. What is RENEW’s interest in this proceeding?
A. [***BEGIN CONFIDENTIAL***][***END CONFIDENTIAL***] RENEW is also a founding member of the We Energies Renewable Energy Collaborative (“WEREC”), the stakeholder body that has helped We Energies to achieve its voluntary renewable energy goal (5% by 2011) and maximize the value of its 10-year commitment to build, largely from scratch, a strong renewable energy infrastructure within its service territory. The collaborative, consisting of Midwest Renewable Energy Association, Citizens Utility Board, American Wind Energy Association, Wisconsin Energy Conservation Corporation, Customers First Coalition, and the 16th Street Community Health Center, has been working since 2002 to shape and guide We Energies’ renewable energy program. I think I can speak for all of the nonprofits in the collaborative when I say that our combined efforts and resources produced the strongest and most innovative utility-run renewable energy program in the state. Until We Energies announced its decision to terminate it, the program it had developed was widely regarded as one of the most successful utility-administered renewable energy initiatives in the nation.
Q. What was the basis of We Energies’ $6 million per year commitment to renewable energy?
A. I will quote from Jeff Anthony, who, as a We Energies manager in 2005, submitted testimony in the utility’s 2005 rate case (Docket No. 05-UR-102) providing details regarding We Energies’ request to recover $6 million per year in costs associated with planned renewable energy development activities:
In its first “Power the Future” filing in early 2002, [We Energies] made several commitments to renewable energy. Among those commitments was that, subject to regulatory approval and cost recovery, the Company would spend an additional $6 million per year to achieve a target of 5 percent of Wisconsin retail load served by the year 2011. With reference to this commitment, the PSCW in its November 10, 2003, Order in the “Power the Future” docket, stated: “As part of the PTF proposal, WEPCO has committed to a goal of obtaining 5 percent of its energy from renewable resources by 2011. This is more than twice the renewable portfolio standard set forth under Wis. Stats. § 196.378, which requires that at least 2.2 percent of each electric provider’s retail energy must be from renewable energy resources by this date. WEC has also declared its intent to spend up to $6 million per year for ten years on emerging technologies and activities, to encourage the development of renewable resources.
Q. We Energies launched its Renewable Energy Development program in 2002. Why did the utility wait until 2006 to begin spending $6 million per year on the program?
A. As a condition of its WICOR merger, the Commission imposed a five-year rate freeze on We Energies that expired on January 1, 2006.
Q. Did We Energies receive approval on its request to recover $6 million for renewable energy development costs?
A. Yes, it did. It also received approval from the Commission in 2007 to spend $6 million per year on its renewable energy development program in 2008 and 2009, and it also received approval in 2009 to spend $6 million per year on its renewable energy development program in 2010 and 2011. All told, We Energies has sought and received permission to spend up to $36 million on the renewable energy program it has developed in consultation with WEREC.
Q. Did We Energies produce a “Renewable Energy Development” program plan for the PSC’s review?
A. Yes. In 2006, We Energies created a fully fleshed-out program plan and presented it to the PSC that September, building on the summary table it had submitted in the previous rate case. The program plan contained a diverse portfolio of renewable energy projects and initiatives. We Energies also committed to hiring an outside firm to perform an independent assessment of all of the elements and initiatives set forth in the Renewable Energy Development program plan.
Q. What elements of We Energies’ Renewable Energy Development program do you consider to be particularly successful?
A. Several of We Energies’ customer incentives and tariffs were unique in the way they complemented Focus on Energy’s renewable energy program. For example, We Energies was the first utility to: (1) offer a solar energy-specific buyback rate; (2) increase the net energy billing capacity ceiling for small wind systems generators to 100 kW; and (3) support renewable energy-specific conferences and events such as Solar Decade held in Milwaukee. Perhaps the most innovative element in We Energies’ program, however, was its special incentive for nonprofit customers seeking to install renewable energy systems. Every three months, We Energies would solicit proposals from schools, religious institutions, local governments, nature centers and other nonprofit entities to co-fund new renewable energy systems on their premises. This We Energies incentive supplemented Focus on Energy grants and cash-back awards. It was designed to overcome the inability of these nonprofit entities to capture federal renewable energy tax credits to offset their own system acquisition costs. As a result of this unique incentive, there are more renewable energy systems serving nonprofit customers in We Energies territory than in any other utility territory. This initiative has an educational component to it as well; We Energies posts real-time production data from these systems on its web site. (Exhibit __ (MJV-2)).
We Energies was also the first Wisconsin utility to field a large solar initiative which supported a total of one megawatt of photovoltaic generating capacity on seven customer rooftops. All told, We Energies’ support of solar energy, including solar hot water systems, helped foster the convergence of a solar industry cluster in southeast Wisconsin consisting of such companies as Helios USA, Johnson Controls, Caleffi Solar, Hot Water Products, and Sunvest.
Q. In what other ways did We Energies’ program benefit ratepayers?
A. We Energies has a number of renewable energy systems 10 kW and above that are interconnected to its distribution system. (Exhibit __ (MJV-3)). Depending on the specific tariff through which We Energies acquires the generation, many of these installations, including most if not all of the biogas generation facilities in its service territory, are a source of Renewable Energy Credits, that, beginning in 2012, can be banked to help the utility meet its 2015 target under Wisconsin’s Renewable Energy Standard. That supply cushion could become very valuable to We Energies if an extended interruption occurs with a major supply source of renewable electricity. Also, the preponderance of solar PV systems in We Energies territory was a contributing factor enabling We Energies to weather July’s heat waves without setting a new record for system-wide peak demand.
Q. Did RENEW have any advance knowledge of We Energies’ unilateral decision to prematurely terminate its Renewable Energy Program?
A. At WEREC’s May 11, 2011 meeting, We Energies representatives disclosed to the collaborative the company’s internal decision to unilaterally and prematurely terminate the program. There had been no discussion of such an outcome between We Energies and any of the other collaborative members prior to the meeting. We Energies’ representatives assured us that the decision was final and irrevocable. Indeed, by the time We Energies got around to dropping this particular bombshell on WEREC participants, program termination was already a fait accompli. One day later, an announcement on the termination appeared on We Energies’ web site.
Q. Has We Energies provided any information to the Commission explaining its unilateral decision to prematurely terminate its program?
A. No, it has not. We Energies has yet to offer an explanation for its decision in this proceeding. In fact, We Energies is not explicitly asking for permission to discontinue funding for this initiative at this time. Instead, the program’s suspension is merely assumed within its proposed suspension of certain regulatory amortizations for 2012. This suspension for the test year would appear to set the stage for termination of the program pursuant to Wis. Admin. Code ch. PSC 137.
Q. Why should the Commission reject We Energies’ decision to prematurely and unilaterally terminate its Renewable Energy Development program?
A. There are several persuasive reasons for not sanctioning We Energies’ decision to unilaterally and prematurely terminate its Renewable Energy Development program. One, this proceeding, to date, is devoid of any justification by We Energies for this abrupt change of course. Two, the Commission has in three previous rate cases approved the $6 million per year earmarked for supporting renewable energy development activities. Nothing has happened between the most recent approval of funds for this initiative and today that warrant a lesser amount of funding for this initiative, let alone its outright termination. [***BEGIN CONFIDENTIAL***][***END CONFIDENTIAL***] In other words, there is a trust issue here that should not be summarily dismissed.
Five, the Commission staff audit in this proceeding revealed excess revenue for the test year of more than $85.8 million under the proposal submitted by WEPCO compared with adjustments proposed by Commission staff. “In other words, these proposed adjustments indicate that applicants are proposing to defer $85.8 million more than is necessary to achieve no change in base rates.” Accordingly, there is no valid basis for We Energies to contend that it must terminate or suspend its renewable energy program with a relatively small annual budget of $6 million. We Energies could cover program costs 14 times over with its revenue surplus. Six, this initiative is an important source of renewable energy development and innovation throughout We Energies’ service territory, providing support for customer-sited renewable energy installations, conferences, workshops, research and development activities, demonstration projects, and advanced renewable buyback rates. Although the accomplishments of this program over the past five years are a good start, there is still much to be achieved. Termination of this program would be a severe blow to area contractors, businesses, and manufacturers that invested in new production capacity and expanded their workforce in direct response to the favorable climate for renewable energy that We Energies had created in its service territory. Allowing We Energies to abruptly terminate its renewable energy initiative without cause would send a strong signal to these businesses and other prospective market actors that they should focus their renewable energy development work in out-of-state markets, where policy commitments are durable enough to survive the whims of utility managers.
Q. Does this complete your direct testimony?
A. Yes it does.
by jboullion | Aug 8, 2011 | Uncategorized
Immediate release
August 8, 2011
More information
Michael Vickerman
Executive Director
608.255.4044
mvickerman@renewwisconsin.org
Statement of Michael Vickerman
Executive Director – RENEW Wisconsin on
Alliant’s Iowa Wind Energy Project
Alliant Energy, parent company of Wisconsin Power and Light, disclosed its intention last week to build a 100-megawatt wind energy facility in Franklin County, Iowa, and place it in service before December 2012. For the moment at least, the costs of this investment will not be borne by Alliant’s Iowa or Wisconsin ratepayers, but rather the parent company’s shareholders.
Moving forward now on this project locks in the favorable pricing terms for the wind turbines that Alliant had negotiated several years ago with Vestas, a Danish turbine manufacturer with a plant in Colorado.
We at RENEW support Alliant’s renewable energy venture so long as it operates as either a merchant plant, selling the electricity into the Midwest wholesale market, or a dedicated source of renewable electricity serving Alliant’s Iowa ratepayers.
However, RENEW firmly believes that utility-owned generating assets should be located in the same state where the ratepayers who are underwriting the project reside. In other words, if there comes a time when Alliant needs a new wind project to meet its Wisconsin renewable energy requirements, it should either build that installation in Wisconsin or purchase electricity from a new nonutility-owned installation located in Wisconsin.
There is a fully permitted wind project in Alliant’s Wisconsin territory that is ready to serve Wisconsin Power and Light customers. Located in Lafayette County, the Quilt Block project, developed by EDP Renewables, an independent wind developer, is licensed to be a 99-megawatt facility that could be operational before the end of 2012. The economic benefits to Lafayette County and Wisconsin as a whole from pursuing local wind projects like Quilt Block far exceed what can be obtained from more distant sources of renewable electricity.
END
by jboullion | Jul 26, 2011 | Uncategorized
For immediate release
More information
Joe Friesen, Communications Assistant
608.819.0748
jfriesen@renewwisconsin.org
RENEW Debuts Wisconsin Renewable Energy Map
Volunteer Joe Friesen started a “simple” task to organize basic information on Wisconsin’s wind farms. This task grew over time to become a database and map that documents the location of nearly every renewable energy generating system in the state. Highlighting over 1,300 installations that total more than 700 megawatts of renewable electricity, RENEW Wisconsin’s database has become the most comprehensive on-line compilation of in-state renewable energy systems.
Installations depicted on this on-line tool range from small customer-owned solar electric systems to the 162 MW Glacier Hills wind farm in Columbia County, the largest renewable energy installation in Wisconsin. The database also includes a county by county breakdown.
“The real power of this database is the ability to visually represent the data across Wisconsin,” said Friesen. “Being able to see the distribution of renewable energy systems from Racine to Ashland shows that these are proven technologies that play a critical role in Wisconsin’s energy mix.”
When Glacier Hills comes online this December, the combined output from Wisconsin’s commercial-scale wind farms will produce the equivalent energy needed to power 175,000 residences.
At 1,200 installations, more than 90% of RENEW’s database is comprised of solar electric systems placed on homes, churches, businesses and schools.
“The steady growth of small-scale renewables here is attributable to the state’s previous commitment to build a vibrant renewable energy marketplace,” Friesen said. “Unfortunately, the policies adopted years ago to accomplish that objective are now under attack from the Legislature and certain utilities. This is certain to result in a dramatic slowdown of renewable energy installation activity.”
“Legislators needn’t look any further than their own districts to see examples of renewable energy systems creating local jobs and contributing to Wisconsin’s energy security” Friesen said.
Individuals interested in helping should send details about their renewable energy installations to Joe Friesen. Pertinent details include: system capacity, name of installer, year of installation, and zip code of installation.
Joe Friesen’s volunteer work with RENEW is made possible through a program called Mennonite Voluntary Service. MVS is a nationwide program which seeks to match dedicated volunteers with deserving nonprofit organizations at a fraction of the cost of a normal full-time employee.
–END–
RENEW Wisconsin is an independent, nonprofit 501(c)(3) organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives. More information on RENEW’s Web site at www.renewwisconsin.org.
by jboullion | Jul 18, 2011 | Uncategorized
Immediate release
July 18, 2011
More information
Michael Vickerman
Executive Director
608.255.4044
mvickerman@renewwisconsin.org
National Study Vindicates Wisconsin’s Clean Energy Policies
Nearly a decade of forward-looking strategies propelled investments in Wisconsin’s clean jobs economy above other Midwest states, according to an economic study issued by The Brookings Institution, a nonpartisan public policy organization in Washington, D.C.
Reviewing data gathered between 2003 and 2010, the Brookings analysis pegged the number of clean economy jobs in the state at 76,858, a net increase of nearly 4,000. Measured as a percentage, Wisconsin’s clean economy accounted for 2.7% of all jobs in the state, compared with 2.5% for Iowa, 2.1% for Minnesota, 1.9 % for both Indiana and Michigan, and 1.8% for Illinois. Overall, Wisconsin ranked 8th among all states and the District of Columbia in the relative size of its clean economy.
The report categorizes clean economy jobs as those in energy efficiency and renewable energy; sustainable forestry products; recycling and reuse; waste management and treatment; organic food and farming; energy efficient appliance and building manufacturing; and more.
“Clearly, Wisconsin’s commitment to clean energy has paid dividends, attracting new businesses and creating high-paying jobs that could have easily gone elsewhere,” said Michael Vickerman, executive director of RENEW Wisconsin, a statewide organization advocating for public policies and private initiatives that advance renewable energy.
These policies and initiatives include the establishment of Focus on Energy, the region’s first ratepayer-funded energy efficiency and renewable energy program, attractive buyback rates offered by utilities for renewable energy, and innovative incentives to encourage customer installation of renewables.
In addition, Wisconsin’s adoption of a 10% renewable energy standard back in 2006 spurred new utility-scale installations built by skilled tradesmen employed by local contractors. During the study period, the number of wind-related jobs in Wisconsin doubled from less than 450 to 900.
As documented in the Brookings report, the wages for these clean economy jobs run higher than the statewide average ($37,931 vs. $35,906).
“Unfortunately, Wisconsin’s clean economy is in danger of losing a good deal of its steam as a result of policy rollbacks and funding cutbacks in the renewable energy arena,” Vickerman said. “The short-sighted attacks we’ve seen in 2011 could throw the state’s clean economy into reverse next year.”
So far this year, the Legislature has reduced funding for Focus on Energy, suspended the statewide rule regulating the permitting of wind turbines, and weakened the state’s renewable energy standard by allowing utilities to count Canadian hydropower toward their requirements.
“On top of that, We Energies, the state’s largest utility, announced that it will discontinue what had been an effective renewable energy initiative,” Vickerman said. “Among other accomplishments, it was instrumental in enabling Helios USA to build a solar-electric manufacturing facility in Milwaukee’s Menomonee River Valley.” The plant now employs 50 workers.
END
RENEW Wisconsin is an independent, nonprofit 501(c)(3) organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives. More information on RENEW’s Web site at www.renewwisconsin.org.
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.
