There can be no mistaking the message in the PSC's Advance Plan 7 decisions and its February 1996 report to the Legislature on electric utility restructuring: the PSC is no longer interested in advancing renewable energy through regulatory means.

In a deferred Advance Plan 7 decision this March, the PSC decided against establishing a set-aside for new renewable generation. During the hearings, RENEW proposed that the PSC set up a Green solicitatation program, a mechanism by which one or more utilities could solicit proposals to acquire renewable capacity and select the best ones through a competitive process. The ruling is consistent with the PSC's express desire to dismantle the generation planning process and other regulatory requirements governing the building of new power plants in Wisconsin.

The PSC report to the Legislature said very little about renewable resources apart from some vague language about enabling customers select different resource options, including, presumably, clean energy resources. The report was utterly silent on RENEW's recommendation to establish a renewable portfolio standard to ensure the availability of clean energy resources once power generation becomes a deregulated industry. Clean energy advocates see the renewable portfolio standard concept as a competitively neutral mechanism that requires each electric supplier to derive a certain percentage of the electricity it sells in Wisconsin from renewable resources. With a renewable portfolio standard in place, the PSC would periodically determine the appropriate percentage of renewables in Wisconsin's generation mix.

At about the same time that Wisconsin's PSC decided to leave renewables hanging, the California Public Utilities Commission embraced the renewable portfolio standard as part of its vision of a restructured utility industry. The California PUC incorporated a minimum renewable requirement to diversify the state's resource base and develop long-term sources of clean power. Significantly, neither the PSC's restructuring report nor its Advance Plan 7 order saw any need to enhance fuel diversity and improve the environmental performance of the Wisconsin's electric system.

The Commissioners did express support for Green Pricing at last year's public hearings on deregulation and retail wheeling. However, there is nothing in the report that indicates when the PSC would require Green Pricing programs and what they would entail. (For more on Green Pricing, see The Pros and Cons of Green Pricing)

Though the PSC favors the rapid emergence of an unregulated power generation industry, it rejected RENEW's suggestion during the Advance Plan 7 hearings to require the use of market-based approaches for comparing fossil fuel investments against renewable investments. Utilities currently ignore the role of risk in evaluating different capital investment options, in large part because they have a safety valve in the form of a captive group of customers on which to pass unanticipated costs arising from faulty investment decisions. Recognizing that there is value in price stability, financial theorists have developed straightforward ways of comparing the long-term value of energy resources with stable costs, like wind and solar, against energy resources with unpredictable costs, like gas-fired plants.

The PSC's unwillingness to support reasonable measures to account for risk enables the utilities to perpetuate resource planning procedures that disadvantage capital-intensive technologies like wind, biomass and solar. It also underscores the degree to which the PSC has abandoned its long-time tradition of employing regulatory mechanisms to correct obvious market dysfunctions, especially when the latter works against the public interest.

Clearly, the PSC no longer sees itself as being responsible for facilitating the development of renewable energy in Wisconsin. The more the Commissioners distance themselves from the old regulatory paradigm, the more secure they become in their belief that renewables do not deserve any preferential treatment. Though two years have passed since the state revised its energy policy to favor renewable resources over nonrenewable resources, the PSC has yet to issue any rulings for translating that legislative preference into real action.

In testimony presented to Congress in late 1994, Commissioner Neitzel said: "My vision of customer choice also includes the ability to shop for supplies from renewable providers." In the absence of any discernible actions to facilitate the availability of renewable choices for customers, one must conclude that Commissioner Neitzel no longer thinks it's worth the effort, and that has become the majority viewpoint in the PSC.