by jboullion | Apr 15, 2011 | Uncategorized
For immediate release
April 15, 2011
More information
RENEW Wisconsin
Michael Vickerman
608.255.4044
mvickerman@renewwisconsin.org
We Energies Customers Will Pay the Higher Cost of Hauling Coal
We Energies’ electricity customers can look forward to coughing up an additional $25 million in 2011 due to the Public Service Commission’s approval yesterday [April14] of a rate increase to cover the escalating cost of transporting coal to Wisconsin power plants.
Milwaukee-based We Energies, Wisconsin’s largest electric utility, imports coal from such distant locations as Wyoming and Pennsylvania to generate electricity. Transportation now accounts for two-thirds of the delivered cost of coal to Wisconsin.
Diesel fuel costs have jumped to approximately $4.00 a gallon this year, propelled by political unrest in the Middle East, declining petroleum output from Mexico, a weakening dollar, and other factors. We Energies’ request predated the ongoing civil war in Libya.
“While we cannot control any of those price drivers, we can more effectively cushion their effects by diversifying our energy generation mix with locally produced wind, solar, small hydro, and biogas electricity,” said Michael Vickerman, executive director of RENEW Wisconsin, a statewide organization advocating for public policies and private initiatives that advance renewable energy.
“The coal mines aren’t getting any closer to Wisconsin. Therefore we have to be serious about reducing our dependence on fossil fuels that are tied to the global oil supply picture. Now is not the time to skimp on investments in conservation and renewable energy that will help stabilize the utility bills of businesses and residents,” Vickerman said.
“Do we have the will to pursue energy policies that take us off of the fossil fuel price escalator? Doing nothing will bake these rate increases into our future without any corresponding boost to Wisconsin’s job market and sustainable energy economy.”
–END–
by jboullion | Dec 1, 2010 | Uncategorized
For immediate release
December 1, 2010
More information
RENEW Wisconsin
Michael Vickerman
608.255.4044
mvickerman@renewwisconsin.org
Wisconsin Cannot Afford to Ignore Rising Coal Prices
Long-considered an inexpensive and reliable fuel source, coal has become subject to market and regulatory pressures that threaten to make it an expensive and risky way to generate electricity, according to national news reports and pertinent utility filings with the Wisconsin Public Service Commission (PSC).
“The expectation of continued increases in coal prices reinforces the value of relying on Wisconsin’s own energy resources. If there’s an effort to find savings for utility customers, the logical move would be to shutter antiquated coal plants before they become more of a liability,” said Michael Vickerman, Executive Director of RENEW Wisconsin, a statewide, nonprofit renewable energy advocacy organization.
A key driver behind coal’s rising cost is China, which has moved from an exporter to an importer of coal. The New York Times (NYT) reported last week that Chinese coal imports will hit all-time highs for November and December of this year. Some of this coal is coming from Wyoming’s Powder River Basin, the coal field that also supplies many Wisconsin power plants.1
In the New York Times story, an executive from Peabody Energy, the world’s largest private coal company, predicted that his company will send larger and larger quantities of coal to China in the coming years.
Further adding to the upward price pressure on coal is the rising cost of diesel fuel. The PSC has estimated that half of the delivered cost of coal in Wisconsin is attributable to rail shipment, that is highly sensitive to the price of diesel fuel, which sells for 38 cents more per gallon than it did a year ago, according to the U.S. Energy Information Administration.2 Tom Whipple, editor of the Peak Oil Review, expects diesel fuel supplies to tighten in 2011 as a consequence of flat production volumes and increasing demand from Asia.3 This phenomenon could affect Wisconsin electric utility rates as early as January 2011, according to Vickerman.
We Energies’ coal costs have escalated by $57 million, of which transportation costs account for almost $33 million, according to the utility’s most recent rate filing with the PSC. On top of that, We Energies expects to pay an additional $8 million in oil surcharge costs.4
Regulatory costs add pressure
Additionally, compliance with coming federal clean air regulations is certain to propel the cost of coal generation higher, especially if utilities install expensive pollution control equipment on their aging and increasingly costly generators.
Several U.S. utilities, including Minneapolis-based Xcel Energy, have decided to meet that upcoming regulatory challenge by shutting down old coal-fired units and replacing them with a combination of gas-fired and renewable generation. An Xcel executive told the Denver Post that it’s often more cost effective to shutter these plants than to retrofit them.5
“The only thing that keeps these clunkers going is the belief that coal will always be the cheapest resource available to utilities,” said Vickerman. “But it is now quite apparent that coal is no longer dirt cheap, and it’s time we in Wisconsin face that reality. When you add up the costs of mining, transportation, and cleaning up old power plants to meet new clean air standards, coal shapes up as an expensive anachronism, not the bargain fuel that it once was. Of course, the premium that utilities pay to keep burning coal will be passed along directly to utility customers.”
Wisconsin’s energy policies, which expressly favor conservation and renewable resources, have been exceptionally effective at diversifying and localizing the state’s energy mix, as well as generating thousands of family-supporting jobs here, said Vickerman.
1. Breaking Away From Coal, New York Times, November 30, 2010
http://www.nytimes.com/2010/11/30/business/energy-environment/30utilities.html?_r=1&scp=1&sq=breaking%20away%20from%20coal&st=cse
2. Weekly Petroleum State Report
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/pdf/highlights.pdf
3. Peak Oil Review
http://www.aspousa.org/index.php/2010/11/review-november-29-2010
4. We Energies’ Application for Reopening rate request docket
http://psc.wi.gov/apps35/ERF_view/viewdoc.aspx?docid=137970
5. Rising coal costs will be felt in electric bills, Denver Post, October 24, 2010
http://www.denverpost.com/search/ci_16412425
END
by jboullion | Aug 20, 2010 | Uncategorized
From the testimony of Michael Vickerman in opposition to the request of Wisconsin Public Service Corporation to increase the cost of renewable energy purchased by customers in the NatureWise green-pricing program:
The purpose of my testimony is threefold: (1) to discuss how basing buyback rates on locational marginal pricing (LMP’s) penalizes low-risk renewable energy sources; (2) to encourage Wisconsin Public Service Corporation (WPS), with the support of the Commission, to establish a net energy billing tariff for small wind energy systems up to 100 kilowatts and (3) to urge the Commission to hold WPS’s NatureWise premium at 1.25 cents/kWh.
by jboullion | May 6, 2010 | Uncategorized
A commentary
by Michael Vickerman, RENEW Wisconsin
May 4, 2010
Renewable energy businesses and activists entered the month of April with high hopes of seeing the State Legislature pass the Clean Energy Jobs Act (CEJA), a comprehensive bill designed to propel Wisconsin toward energy independence, along the way creating thousands of new jobs and strengthening the sustainable energy marketplace. This comprehensive bill would have raised the renewable energy content of electricity sold in Wisconsin, while stepping up ratepayer support for smaller-scale renewable energy installations throughout the state.
Unfortunately, on April 22, the State Senate adjourned for the year without taking action on the Clean Energy Jobs Act bill, effectively killing the measure and leaving hundreds of businesses and individuals who campaigned for the bill empty-handed.
If life imitates poetry, then the line that opens T.S. Eliot’s “The Waste Land—“April is the cruelest month”—aptly encapsulates the evolution of a campaign that overcame many obstacles in the final weeks only to be undermined by the unwillingness of Senate leaders to schedule a vote on the bill. The sense of anticipation that began the month was swept away by a combination of personal feuds, extreme partisanship, and increasingly polarized public attitudes toward climate change. That the bill’s demise coincided with the 40th anniversary of Earth Day was seen by supporters as an especially cruel twist of fate.
It certainly didn’t help matters that the some of the state’s most politically entrenched constituencies banded together to fight CEJA at every stage of the process. Among the hard-core opponents were Wisconsin Manufacturers and Commerce, the Paper Council and the Farm Bureau. Their vociferous opposition scuttled bipartisanship, eliminating the possibility that a Republican legislator would vote for the bill.
Working hand-in-glove with vitriolic right-wing radio talk show hosts, the opposition supplied their grassroots faithful with a smorgasbord of exaggerated claims, hyperbole, outright fantasy, and pseudoscience. Though the analysis purporting to document the opposition’s assertions set a new low in academic rigor, it succeeded in its aim, which was to plant the seeds of fear among certain legislators about the ultimate cost of this legislation before the bill was even introduced.
Working just as vigorously for the Clean Energy Jobs Act, a broad spectrum of interests answered the requests for help. Whether they were one-person solar installation businesses or Fortune 500 corporations like Milwaukee-based Johnson Controls, CEJA supporters wrote letters, made phone calls, and corralled their legislators at the Capitol on several days during March and April.
In dozens of face-to-face meetings with their representatives, CEJA supporters made the case for this bill by bringing out their own experiences as business owners, farmers, educators, builders, and skilled tradesmen. They presented a local and highly personal angle to the clean energy policy debate that many legislators had not appreciated before. Their passion and energy were instrumental in giving this bill a fighting chance for passage at the end of the session. Unfortunately, the campaign could not overcome the pique of the Senate Democrats.
One legislator who kept pushing this ambitious bill up the legislative hill until the very last day was Assembly representative Spencer Black, who was one of the four principal authors of the measure. CEJA supporters are indebted to Rep. Black for his vigorous leadership and his determined efforts to round up support among his compatriots for passing this bill.
Two rays of sunlight did manage to pierce through the heavy clouds at the close of April, prompted by the dedication of the two largest wind turbines owned by Wisconsin schools. In each case, the school erected a 100-kilowatt Northwind turbine manufactured by Vermont-based Northern Power Systems. One serves Wausau East High School while the other feeds power to the Madison Area Technical College’s Fort Atkinson branch. The turbines will offset a significant fraction of the electricity consumed at each school.
Located well within the city limits of Wausau and Fort Atkinson, these 155-foot-tall wind generators eloquently testify to the breadth and depth of public support for renewable energy across Wisconsin. Next January, the Legislature will witness the return of clean energy supporters with similar legislation for strengthening Wisconsin’s renewable energy marketplace. In the meantime, we will be working hard to achieve a very different outcome.
END
Michael Vickerman is the executive director of RENEW Wisconsin, a sustainable energy advocacy organization headquartered in Madison. For more information on Wisconsin renewable energy policy, visit RENEW’s web site at: www.renewwisconsin.org.
by jboullion | Apr 27, 2010 | Uncategorized
IMMEDIATE RELEASE
April 27, 2010
MORE INFORMATION
Michael Vickerman
RENEW Wisconsin
608.255.4044
mvickerman@renewwisconsin.org
Renewable Energy Not Responsible for MGE Rate Increase
Higher costs associated with fossil fuel generation are driving Madison Gas & Electric’s costs higher, according to testimony submitted by company witnesses. The utility filed an application last week with the Public Service Commission (PSC) to collect an additional $32.2 million through a 9% increase in electric rates starting January 2011.
The bulk of the rate increase can be attributed to expenses associated with burning coal to generate electricity. A 22% owner of the 1,020-megawatt (MW) Columbia Generating Station near Portage, Madison Gas & Electric (MGE) and the owner plant owners plan to retrofit the 35-year-old facility to reduce airborne emissions. The cost of Columbia’s environmental retrofit is expected to total $640 million, of which MGE’s share is about $140 million.
MGE also owns an 8% share of the state’s newest coal-fired station, the 1,230-MW Elm Road Generating Station located in Oak Creek. A portion of the proposed rate hike would cover lease payments and other expenses at that plant.
MGE’s application does not attribute any portion of its proposed rate hike to renewable energy sources. However, MGE plans to increase the premium associated with its voluntary Green Power Tomorrow program from 1.25 cents per kilowatt-hour to 2 cents. RENEW estimates that the premium hike will collect more than $1 million in 2011 from the approximately 10,000 customers participating in the program.
According to the utility’s web site, 10% of MGE’s electric customers purchase some or all of their electricity from renewable resources. Moreover, Green Power Tomorrow has the second highest participation rate of all investor-owned utilities in the country according to the National Renewable Energy Laboratory.
Not surprisingly, MGE anticipates subscribership in Green Power Tomorrow to decrease if the PSC approves the higher premium. Currently, the program accounts for about 5% of total electric sales. Program subscribers include the City of Madison, State of Wisconsin, Dane County Regional Airport, Madison West High School, Goodman Community Center and Home Savings Bank.
According to MGE, sinking fossil fuel prices have widened the difference between wholesale power costs and the cost of supplying customers with renewable energy. However, it is worth remembering that the cost of supplying power from MGE’s renewable energy assets, such as its Rosiere installation in Kewaunee County and Top of Iowa project, did not increase last year and will not increase in the foreseeable future.
“Even though the cost of MGE’s windpower supplies is not going up, Green Power Tomorrow customers will take a double hit if the PSC approves this rate increase and request for higher premiums,” said RENEW Wisconsin executive Director Michael Vickerman. “It’s a ‘heads-I-win-tails-you-lose’ proposition that will wind up rewarding customers who drop out of the renewable energy program because coal is cheaper.”
“It would be short-sighted to penalize renewable energy purchasers just because fossil fuel prices are in a temporary slump,” Vickerman said. “But if MGE is allowed to institute this penalty at the same time it imposes the cost of cleaning up an older coal-fired generator on all of its customers, including its Green Power Tomorrow subscribers, it would have a profoundly negative impact on the renewable energy marketplace going forward.”
“This is the wrong time to be throwing up barriers to renewable energy development. We at RENEW will fight proposals that reward fossil fuel use and penalize renewable energy,” Vickerman added.
END
RENEW Wisconsin (
www.renewwisconsin.org) 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.
