Dramatic Slowdown in Market Activity Anticipated
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.