by jboullion | Aug 27, 2009 | Uncategorized
IMMEDIATE RELEASE
August 27, 2009
MORE INFORMATION
Michael Vickerman
Executive Director
608.255.4044
mvickerman@renewwisconsin.org
PSC opens door for more in-state renewable installations
At its open meeting today, the Public Service Commission (PSC) called for the expansion of voluntary utility programs that offer premium rates for in-state sources of renewable energy. Today’s discussion marked the first time the PSC took up the issue of premium renewable energy buyback rates since it opened a docket in January to investigate the viability of a statewide policy governing utility purchases of solar, wind and biogas energy generated by their customers.
“While we would have preferred a policy-driven approach to making homegrown renewable energy a bigger part of Wisconsin’s energy future, we are heartened that the PSC will direct utilities to produce plans for encouraging more customer investments in this market sector,” said Michael Vickerman, executive director of RENEW Wisconsin, a Madison-based sustainable energy advocacy organization.
During the PSC’s investigation, RENEW Wisconsin submitted comments advocating for the establishment of fixed-rate, technology-specific payments pegged at the production cost of the facility. Where offered, these premiums—also known as Advanced Renewable Tariffs—have significantly increased private investment in distributed sources of renewable energy. Earlier this year, the State of Vermont passed a law mandating premium rates for renewable energy, the first in the nation to do so.
Several years ago, RENEW and other organizations helped We Energies design and launch a voluntary program for encouraging customer ownership of renewable energy systems, including the state’s first premium solar rate. “We hope the state’s utilities will take advantage of our experience in this area and work collaboratively to develop renewable energy premium plans that will work,” Vickerman said.
END
RENEW Wisconsin
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.
Previous press statements, newsletters, and other materials are posted at
http://renewmediacenter.blogspot.com.
by jboullion | Aug 25, 2009 | Uncategorized
A commentary by
by Michael Vickerman, RENEW Wisconsin
August 11, 2009
Continuing a trend that began in 2008, America’s energy appetite will continue to decline through 2009, according to the U.S. Energy Information Agency (EIA). The reductions are cutting across all primary energy sources: petroleum, coal, and natural gas. These projections appear in the July edition of EIA’s Short-Term Energy Outlook.
In the same document, EIA anticipates a 2% decline in this year’s electricity use, following a 1.6% dip in 2008. The ongoing reduction in electricity demand is having a particularly pronounced effect on coal consumption, which is projected to drop by 5.2% from year-earlier totals. Between the sharp pullback in industrial demand for electricity and low natural gas prices, the current market for coal is very weak.
Needless to say, as fossil fuel consumption goes, so go carbon dioxide emissions. Given EIA’s expectations that the ongoing pullback in energy demand will persist through this year, there should be a continued slackening in greenhouse gases discharged into the atmosphere. If you add this year’s projected reductions to last year’s recorded decline, the overall drop in annual CO2 emissions from 2007 could be as much as 5%. That’s a far larger reduction than what would be accomplished under any of the various cap-and-trade proposals being debated in Congress.
While energy efficiency spending and stricter building codes are good policies for moderating demand, their effects are modest compared with the consequences of a full-blown economic downturn. The current situation raises an important question: what is the value of displacing a ton of CO2 when economic conditions are sufficiently bleak to guarantee future declines in emissions regardless of new climate change policy initiatives?
From a climate change perspective then, current economic conditions present a kind of a good news-bad news situation. On the plus side, Americans are driving less, flying less, buying fewer disposable items made in foreign countries, and building fewer energy sinks like houses, hotels, and megamalls. This slowdown provides us with an opportunity to conserve fossil fuel supplies over a longer period of time, reduce our vulnerability to traumatic events occasioned by human disturbance of the atmosphere, and deploy capital to build up more localized and less high-maintenance economic arrangements that can be sustained over the long haul.
Indeed, out of this contraction could emerge a slower-paced and more sustainable America, one less dependent on the kindness of Middle East petrostates and hail Mary legislation from Congress. A broad-based movement to invest in community-based sustainable energy would in turn have a far more positive and lasting effect on our energy economy than would a Green New Deal that extends the presumption that the American way of life is non-negotiable, as former Vice President Dick Cheney would have us believe. Energy sustainability is an easier goal to achieve when everyone takes part in the project.
But there’s no denying the substantial loss of investment capital available for sustainable energy development. As spending is curtailed and debt is paid down, dollars that could underwrite wind, solar and bioenergy installations are bring taken out of circulation. Moreover, the prices of competing fuels like coal, natural gas and liquid propane have fallen substantially from their 2008 highs, as has the wholesale price of electricity. Many of the renewable energy proposals that looked good on paper 12 months ago are now in hiatus, waiting for the economic headwinds to subside.
These headwinds notwithstanding, there remain a few businesses that are pressing forward with projects that will enable them to reduce their energy overhead and/or diversify their revenue sources. One of the more intrepid of these companies is Organic Valley Family of Farms, which recently installed three pole-mounted photovoltaic arrays in front of their $4 million headquarters building in LaFarge.
For this farmer-owned cooperative, the idea of capturing renewable energy on-site to serve its main building was a logical extension of their commitment to organic agriculture and environmental stewardship. The 8.4 kilowatt installation is expected to produce about 14,200 kilowatt-hours a year, which is about one-and-a-half times the electricity that a typical Wisconsin residence uses per year.
But Organic Valley’s sustainable energy agenda does not stop there. The cooperative is investigating the feasibility of a solar hot water system to serve its cheese-packing facility, also in LaFarge. Even more ambitious is the community wind energy project that Organic Valley and two La Crosse-area partners–Western Technical College and Gundersen Lutheran–have been working to get off the ground. These three entities have formed a for-profit limited liability corporation for the purpose of owning and operating a two-turbine project near Organic Valley’s distribution center in Cashton.
Measurements taken so far indicate that the Cashton location is one of the windiest areas in western Wisconsin.
Even though Organic Valley is a profitable enterprise, it is doubtful that any of these investments in sustainable energy would be going forward without state and federal incentives. As a for-profit cooperative in a rural area, Organic Valley is uniquely positioned to tap into two sources of federal funds: the U.S. Department of Agriculture’s Renewable Energy in America Program and the solar Investment Tax Credit. Complementing these funding sources is Focus on Energy, which is co-funding a portion of Organic Valley’s solar electric array and its wind monitoring expenses.
The combination of these funding sources enables businesses like Organic Valley to pursue a proactive approach towards sustainability and invest in systems that will pay off over the long haul. As long as these public policy initiatives remain in effect, rural Wisconsin businesses can grow while conserving fossil fuel use and reducing their impact on the atmosphere, even in these trying times.
Michael Vickerman is the executive director of RENEW Wisconsin, a sustainable energy advocacy organization headquartered in Madison. For more information on what Wisconsin is doing to advance sustainable energy, visit RENEW’s web site at: www.renewwisconsin.org and RENEW’s blog at: http://renewwisconsinblog.org.
by jboullion | Jul 20, 2009 | Uncategorized
From the direct testimony of Michael Vickerman on behalf of RENEW Wisconsin:
Q. What is the purpose of your testimony?
A. The purpose of my testimony is to communicate our organization’s support for the installation of a biomass gasification system that would produce biomass-derived synthetic gas (“syngas”) for serving Northern States Power’s Bay Front Unit #5.
Q. Why does RENEW support this particular application?
A. We note the following public policy objectives that would be advanced if the proposal submitted by Northern States Power Corporation (“NSPW”) were approved. These objectives include:
1) Meeting Wisconsin’s current Renewable Energy Standard;
2) Eliminating a source of coal-fired power from its system;
3) Using a locally available renewable energy resource;
4) Reducing carbon dioxide emissions and other gaseous pollutants;
5) Maintaining a strong generation source in northern Wisconsin; and
6) Investing Wisconsin capital in a renewable energy generating facility power plant within its borders.
by jboullion | Jul 13, 2009 | Uncategorized
IMMEDIATE RELEASE
July 12, 2009 (Updated August 24, 2009)
MORE INFORMATION
Michael Vickerman, Executive Director
608.255.4044
mvickerman@renewwisconsin.org
It’s Time to Bring Renewable Energy Home
by Michael Vickerman, RENEW Wisconsin
July 12, 2009
In a unanimous vote, the Public Service Commission (PSC) recently cleared the way for Alliant Energy’s Wisconsin utility to construct a 200 megawatt (MW) windpower plant project in southern Minnesota. Once operational, the Bent Tree project, costing upwards of $450 million, will be a productive source of renewable energy that will provide lasting benefits to Minnesota’s economy and environment. Since it will be Alliant’s Wisconsin customers who foot the bill, however, it is reasonable to inquire whether the current utility practice of outsourcing renewable energy production to other states is a good thing for Wisconsin’s economy.
Because we can’t see it, taste it, hear it or smell it, we tend to lose sight of the fact that electricity is a manufactured product. To make it, capital is amassed and expended on machinery that convert raw resources like coal, flowing water, and wind into this highly useful form of energy. The electricity is then transported via networks of wires to power factories, illuminate residences and streets, propel commuter trains, and energize the complex communications systems that allows to store vast quantities of instantly retrievable information. It is hard to name a manufactured product that adds more value to an industrialized society than electricity.
Yet electricity’s impact on the economy is not defined solely by the activities it supports. There is as well the intense amount of economic activity that goes into building the power plants themselves. In the case of Bent Tree, the capital used to manufacture, transport and erect 122 wind turbines will unleash a year-long burst of construction work in Freeborn County employing hundreds of skilled laborers and technicians. The work will also ripple through nearby component manufacturers involved with the project, as well as ports and other transfer points where components are unloaded and loaded onto special vehicles and hauled to the project zone.
But the economic stimulus doesn’t end there. The Bent Tree turbines, once operational, will produce a stream of revenues to local governments over the life of the project. These dollars will be used to support police and fire protection, recycling and emergency medical services in the host communities. Area landowners will also receive payments that will supplement their existing income. In times of distress, these payments enable farmers to stay current on their taxes and keep their farms going. Last, the turbines will also support a crew of technicians and windsmiths to operate the facility and maintain it over a minimum of three decades.
There is no question that this project will energize Freeborn County’s economy for many years to come. But it also begs the question: how much of Bent Tree’s first-order and second-order economic benefits will trickle into Wisconsin? Answer: Virtually none.
Alliant’s decision to invest in a Minnesota wind project comes at a time when Wisconsin is struggling to keep its manufacturing sector intact. In light of the ongoing economic contraction, now would not be a propitious time to outsource energy production to neighboring states and export Wisconsin capital and skilled labor to build valuable infrastructure that could easily be located in our own state.
Imagine, if you will, the uproar that would surely erupt if citizens learned that federal stimulus dollars were going over into Canada to build factories owned by U.S. companies. However, what Alliant received permission to do–dedicate nearly $500 million in Wisconsin ratepayer dollars to build a brand-new windpower plant in Minnesota–is, at bottom, no different.
Granted, Bent Tree is the not the first wind project owned by a Wisconsin utility to be located in another state. This trend began with Madison Gas & Electric’s 30 MW Top of Iowa facility, costing $62 million, which started operation in early 2008. Also in Iowa, construction is underway on Wisconsin Public Service’s 99 MW Crane Creek project, which is expected to tally about $250 million when completed. But with the approval of Bent Tree, what started out as a trickle has turned into an outright flood of utility capital flowing out-of-state. Keep in mind too that Bent Tree will be three times the size of Cedar Ridge, the only Alliant-owned windpower facility in Wisconsin.
It is true that windpower projects in Iowa and Minnesota are lower-cost sources of electricity than those in Wisconsin. But shouldn’t there be more to the decision calculus than just the unit price of electricity? For example, locating a Bent Tree-sized facility in Wisconsin would generate $800,000 a year in local government revenues and about $600,000 a year in lease payments to landowners. Building it here would also create hundreds of jobs for operating engineers, ironworkers, electricians, specialty haulers, wind energy technicians, and other skilled laborers. What is the basis for giving these impacts so little weight in a power plant proceeding?
Regrettably, under today’s standards of review for permitting utility-owned power plants, the PSC had no choice but to approve Alliant’s application. Alliant had adequately demonstrated that it needed another source of renewable energy to comply with Wisconsin energy policy, and that Bent Tree was the least expensive option on a per-megawatt-hour basis.
It’s worth noting that there are several independently owned prospects that don’t require PSC approval could be up and running in 18 to 24 months, and two of them—Horizon’s in Lafayette County and Iberdrola’s in Columbia County–are in Alliant’s Wisconsin territory. Yet they languish for want of a power purchase agreement with an electric provider. Furthermore, given the current utility preference to own wind generating assets rather than buying wind electricity, there is no assurance that these prospects will ever get built.
True, the current economic contraction has taken a bite out of the wind industry, but that hasn’t put the brakes on wind development elsewhere in the Midwest (see table below). And while local opposition to wind energy has stalled a half-dozen proposed wind plants across the state, that doesn’t explain why fully permitted projects are not proceeding to construction.
No, there is another reason why wind development in Wisconsin is at a complete standstill, and it’s the double whammy described above—the utility preference for out-of-state wind energy coupled with their unwillingness to buy wind energy from independent developers.
In a weakening economy, we can ill-afford to let utilities continue investing Wisconsin capital in out-of-state renewable energy production while simultaneously throwing up barriers to companies seeking to situate renewable generation sources in Wisconsin. The longer utilities go on building projects that benefit the host state more than their home state, the greater the risk of seeing Wisconsin’s construction and manufacturing prowess, along with our highly skilled workforce, migrate to those states with the most viable renewable energy markets. Beyond a certain point, such utility preferences and practices will also cause harm to their customer base. How would that serve the public interest?
If Wisconsin truly desires to provide a home to a viable renewable energy economy, it will have to redefine the public interest standards that govern the expenditure of ratepayer dollars. This means giving such economic benefits as job creation, component manufacturing, workforce participation, increased tax receipts to local and state government, and reduced dependence on future transmission upgrades as much due consideration as cost per megawatt-hour. Granted, this is a form of industrial policy. However, if state policymakers don’t take steps to build a solid market structure for generating more renewable electricity here at home, Wisconsin’s ability to compete for good jobs and business opportunities could become hopelessly compromised.
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Snapshot
Midwest Windpower Development Activity (all figures in MW)
July 2009
Iowa
Operating capacity — 3043
Under construction — 409*
Minnesota
Operating capacity — 1937
Under construction — 40
Illinois
Operating capacity — 1016**
Under construction — 92**
Indiana
Operating capacity — 531
Under construction — 505
Wisconsin
Operating capacity — 449
Under construction — None
Michigan
Operating capacity — 129
Under construction — 14
* Total includes WPS’s 99 MW Crane Creek project
** Total includes EcoEnergy’s 100.5 MW EcoGrove project
*** Total includes Iberdrola’s 300 MW Streator Cayuga Ridge South project
Source: American Wind Energy Association, RENEW
RENEW Wisconsin (www.renewwisconsin.org) is an independent, nonprofit 501(c)(3) organization based in Madison that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives.
