RENEW Wisconsin Newswire – May 20, 2002
Wisconsin’s RPS Off to a Flying Start
Madison – Wisconsin utilities derived 1.26% of their 2001 sales at retail from qualified sources of renewable electricity, according to preliminary estimates from the Public Service Commission. This percentage is well above the minimum requirement of 0.5% for 2001 as established under the state’s Renewable Portfolio Standard (RPS), a component of the Reliability 2000 law adopted in October 1999.
The RPS requires individual Wisconsin utilities to increase gradually, over a 10-year period, renewable electricity supplies as a percentage of overall sales. From an initial level of 0.5% in 2001, the percentage rises to 2.2% in 2011. As of December 31, 2001, utilities acquired enough renewable electricity in the aggregate to satisfy their 2005 requirements, set at 1.2%.
Assuming that Wisconsin utilities sell 75 billion kilowatt-hours (kWh) in 2011 (about 65 billion kWh were sold in 2000), the PSC’s figures suggest that utilities will have to sell an additional 900 million kWh of renewable electricity that year above the amount sold last year. That number is roughly 18 times the estimated annual output from the state’s largest wind farm, the 30 MW Montfort Energy Center in western Iowa County.
However, the PSC’s figures understate the pace of compliance in Wisconsin, as several qualified renewable electricity installations started operations after January 1, 2001. FPL Energy’s installation at Montfort was placed into service in June, while the 80-MW Top of Iowa wind farm, located along Interstate 35 north of Des Moines, didn’t reach full production until December. Their combined output is sold under contract to Alliant Energy and We Energies. If the two wind farms perform up to expectations this year (nearly 300 million kWh annually), the percentage of renewable electricity serving Wisconsin retail customers should equal or exceed 1.55%, the minimum percentage for 2007.
New out-of-state generating units such as Top of Iowa can be applied to satisfy Wisconsin’s renewable requirements, as long as the electricity is physically delivered to an in-state utility and sold at retail.
Other renewable generating units that started operations in 2001 but will not reach full power until this year include the 7 MW Hatfield Hydro Project near Black River Falls and Tinedale Farms’ 750 kW dairy manure-to-methane generating system near Wrightstown. In a typical year, these installations will produce about 35 million kWh.
Many Wisconsin utilities also sell renewable power through voluntary “green pricing” programs, which enable customers to sponsor new sources of renewable electricity through a monthly premium. While these programs have leveraged new renewable generating units that otherwise would not have been constructed, their contribution to the overall system mix has been dwarfed by the volume of renewable electricity resulting from legislative policies like the RPS and the 50 MW renewable capacity set-aside enacted in 1998. Statewide, green pricing programs account for about 10% of the total supply of renewable electricity acquired after January 1, 1998.
Wisconsin’s liberal renewable credit trading rules will reward utilities for selling more renewable electricity than they need to during the early years. A utility that exceeds the minimum percentage requirements in 2002 can bank the excess amount in the form of renewable credits and apply them toward the higher percentages later in the decade. As currently structured, a renewable electricity credit created this year will be valid as long as the RPS is in effect, further reducing the amount of new renewable electricity needed for compliance purposes.
Commentary: It is difficult to escape the conclusion that Wisconsin’s RPS as presently constituted will not leverage new renewable generation projects until the end of this decade. Even with the RPS and green pricing programs, we are only beginning to scratch the surface of the state’s renewable energy potential, and there is a new wave of development opportunities ready to be realized. One person who recognizes this is Governor Scott McCallum. While unveiling his energy plan in June 2001, Gov. McCallum indicated that expanded production from renewable power sources was feasible and would yield multiple benefits. “My goal is to double the amount of renewables we use in the mix. Shoot for 4 percent … within 8 years,” McCallum said.
What is needed is an expansion of the renewable marketplace, whether in the form of increasing the requirements through the RPS or stepping up the energy and resources needed to transform the utilities’ underperforming green pricing programs into powerful engines for leveraging new projects in Wisconsin. Doing both would be even better.
It would be most unfortunate—and a huge step backwards-- if Wisconsin’s renewable energy development potential were to sit on the drawing boards for the next 10 years while the state’s utilities occupied themselves by building one fossil fuel generating station after another.
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Sources for statistical information: Electric Division, Public Service Commission of Wisconsin; Wisconsin Energy Statistics – 2001 (Wisconsin Division of Energy, Department of Administration).
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