Policy Briefs from Energy Strategy Summit
RENEW Wisconsin Policy Issue Briefs
Prepared for Policy Summit – January 13, 2012
Topic Area: Expanding Market Access
Authorizing Renewable Energy Sales from Third Parties to Host Customers
BACKGROUND: There are many households and businesses around the state that desire to host a renewable energy system, but can’t afford the up-front costs associated with these installations. More than two dozen states expressly allow such customers to contract with third parties to install a renewable energy system and sell the output from that equipment, be it electricity or heat, to the system hosts. In those states, that allow such arrangements, a system host simply purchases the electricity or heat from the installation, often at a lower cost than what would be provided by the utility. Read more.
Aggregating REC’s from Local Installations
BACKGROUND: Along with the energy they produce, renewable system owners can also sell the attributes associated with their output to a different entity than the one acquiring the energy. These secondary markets can accommodate a wide range of renewable energy producers, from nationally prominent wind developers to residential owners of PV systems. In Wisconsin, utility-run “green pricing programs’, which are voluntary in nature, funnel customer dollars to support renewable energy installations that would not otherwise ave been constructed, due to their higher cost. In fact, several Wisconsin utilities were, until recently, active aggregators of solar electricity generated by their customers, acquiring their attributes through special buyback rates. But with the discontinuation of these solar initiatives, renewable energy producers must look to other entities to aggregate their REC’s and market them effectively. Read more.
Topic Area: Economics of Renewable Energy
The Renewable Energy Incentives Puzzle
PROBLEM: Incentives for renewable energy systems have been substantially removed from Wisconsin’s marketplace. The majority of utility advanced renewable tariffs (ARTs) are fully subscribed and We Energies’ $6 million/year renewable energy development program is now shut down. Moreover, Focus on Energy has removed incentives for renewables from current program offerings, nearly all within the last 12 to 24 months. As one might easily imagine, the market for customer-driven renewable energy systems is contracting without incentives, which are needed to overcome a utility market structure that discounts the value of local, renewable generation. Indeed, it should be noted that traditional sources of energy thrive with their own hidden incentives, which are not accounted for in the comparison of costs comparing renewable energy to traditional energy sources. The outcome is a highly skewed marketplace that favors traditional energy sources and market actors. Read more.
Press for Advanced Renewable Tariffs
PROBLEM: Worldwide, Feed-in Tariffs (FITs) are widely credited for expanding distributed renewable energy development to a greater extent than other tax or financial incentives. FITs, known in Wisconsin as Advanced Renewable Tariffs (ARTs), have been approved in the last few years by the Public Service Commission of Wisconsin (PSCW) and have been implemented by electric providers as part of their renewable energy acquisition strategies. Apart from net energy billing, the use of ARTs has also been a major income driver for many customer-sited distributed renewable projects in Wisconsin. Read more.
Topic Area: Regulatory Environment of Renewable Energy
Uniform Wind Permitting Rules and PSC 128
PROBLEM: Under current law, the Public Service Commission of Wisconsin (PSCW) reviews proposed wind energy installations only if they exceed 100 megawatts (MW). All other proposals are reviewed by the responsible local permitting authority. For developers of such proposals, the local permitting landscape resembles a minefield. In some cases, the local permitting process has resulted in moratoria or excessively stringent ordinances that make wind development impossible within that jurisdiction. In the vast majority of instances, these restrictions go well beyond the scope of review allowed under Wisconsin Statute 66.0401, which limits municipal review of wind energy systems matters involving public health and safety. Onerous restrictions have even been placed on small wind systems, despite the modest nature of their impacts. Read more.
Improved Net Energy Billing Policy
DEFINITION: Net energy billing (or net metering) is an arrangement that allows utility customers to install and operate renewable generating systems for their own use, and receive full retail value for electricity not consumed on site (up to 100% of their internal usage). Read more.
Topic Area: Towards Community Energy
Community-Owned Energy Generation and Distribution
PROBLEM: From its earliest roots, utility services have been organized by citizens interested in controlling their own access to energy. Initially, many of these utilities relied on local sources of renewable energy (hydro) for their energy. Over time, however, all utilities outgrew their renewable roots and invested heavily in large-scale generation of fossil fuels. Their preference for fossil fuels continues to this day; three new coal plants have been added in the last 10 years. Meanwhile, increasing numbers of citizen-customers now question the economic and environmental sustainability of these investments. They are taking matters into their hands by investing in on-site renewable generation and/or purchasing renewable electricity from their local providers. Read more.
Repairing Wisconsin’s RPS to Benefit Local Renewables
BACKGROUND: Wisconsin’s Renewable Portfolio Standard (RPS) requires electric providers to source, by 2015, 10% of the electricity they sell from qualified renewable energy resources. The law allows these providers to (1) build and own the generation sources themselves; (2) acquire renewable electricity from other generators; and (3) acquire renewable energy credits (the attributes, not the electricity) that meet certain requirements in the law. Wisconsin’s investor-owned utilities have demonstrated a pronounced preference to own the generation used to comply with the RPS. Read more.