On February 28, Governor Tony Evers released his 2019-2021 state budget. The budget bill will now go to the Joint Finance Committee who will review it and get briefings on the various provisions from the Governor’s administration and specific state agencies. The committee will also hold a series of hearings around the state to learn what the general public thinks about the budget bill provisions. By statute, the budget bill is supposed to be complete by July 1st, but that date is not often met, regardless of which party holds power. Between now and then, please contact your state legislators and let them know what you think about the various provisions of the bill. You can find your legislator’s contact information by following this link.
Below is a short summary of the Governor’s proposals related to clean energy.
100% Carbon-Free Goal
Establishes a state goal that all electricity produced within the state should be 100 percent carbon-free by 2050. While not a mandate or requirement, writing this goal in Wisconsin’s statutes will help state agencies, the legislature and the public know what we are trying to achieve.
Allocate $75 million in bonding to fund energy conservation projects on state-owned facilities. $25 million of these funds would be allocated to renewable energy projects.
These funds will be used for energy conservation projects to help state agencies and UW System meet their energy reduction goals and reduce utility costs. Renewable projects could include solar, wind, standby generators or geothermal enhancements to state facilities. The achieved savings from the reduction in utility costs would be used to pay the debt service payments on the bonds.
Focus on Energy
Allows the Public Service Commission to increase funding for the Focus on Energy program beyond the current statutory limit of 1.2 percent of utility revenues. The bill also requires the PSC to submit to the Joint Finance Committee a proposal for spending a greater percentage on the programs than is currently allocated (The amount is to be determined by the PSC).
Create the Office of Sustainability and Clean Energy
Transfer the State Energy Office and its employees from the PSC to the Department of Administration. The new office would:
- Administer a $4 million clean energy research grant.
- Advise state agencies in developing sustainable infrastructure to reduce energy use.
- Study and report on the status of existing clean and renewable energy efforts by the state.
- Serve as a single point of contact to assist organizations pursuing clean energy opportunities.
- Identify clean energy funding opportunities for private and governmental entities.
- In coordination with other state agencies, collect and analyze data needed for clean and renewable energy planning and review those plans with the governor and legislature.
Use a Portion of VW Settlement Funds for EV Charge Station Grants
Spend $10 million of the remaining $25 million from the Volkswagen emissions settlement on grants for electric vehicle charging stations. The rest would be dedicated to replacing public transit vehicles. $42 million of the original $67.1 million that Wisconsin was allocated from the settlement was spent in 2017-19 for replacement of state vehicles and the transit assistance program.
Hybrid Vehicle Registration Fees – Definition expanded to include all hybrids, not just PHEV’s
All hybrid vehicles (any vehicle that uses a battery to increase mpg) would pay the additional $75 annual fee that was originally designed to cover only Plug-in-Hybrid vehicles. This is in addition to the proposed $96 (up from $75) annual vehicle registration fee paid by all vehicles. All-electric vehicles would continue to pay the additional $100 annual fee that was already in the statutes. The fee is designed to recover the sales taxes that would have been paid if they were powered by gasoline that is used to support the transportation budget.
WEDC Tax Credits for Energy Efficiency or Renewable Energy
WEDC would be allowed to award business tax credits of 5% for investments made on projects that improve energy efficiency or that generate energy from renewable resources.
Ratepayer Advocate (Intervenor Compensation) Grants
The bill increases from $300,000 to $500,000 the annual grants the PSC is allowed to make to nonprofit corporations that advocate on behalf of utility ratepayers.
If you have any questions or would like more information about any of these energy related issues please contact Jim Boullion, RENEW Wisconsin’s Director of Government Affairs.
For many years, Focus on Energy’s renewable energy incentive program has labored under an operating environment resembling a regulatory roller-coaster. It has weathered funding suspensions, mid-stream budget reallocations, and an effort to replace rebates with loans.
But that extended wild ride is finally coming to an end, the result of Public Service Commission orders that will restore stability and consistency to Focus’s renewable energy offerings.
The PSC’s ruling in June 2018 locked in $22 million in renewable energy incentives for the 2019-2022 funding cycle, split equitably between residential and business customers. That allocation amounts to a funding increase of $4.7 million, or 27%, over the previous four-year cycle. In addition, the order granted flexibility to move funds between residential and business customers to better ensure all the funding is utilized.
A subsequent order in September 2018 locked in improvements to the business program, including a streamlined application process, a guarantee of request-for-proposals issued three times per year, and a funding set-aside for mid-size projects (between 20 and 100 kilowatts for solar power projects).
We are starting to see the results of these positive decisions!
The business program has an RFP on the street with applications due next week, on Tuesday, October 23rd, for the first round of projects that will be installed in 2019.
All in all, the PSC’s decisions tracked closely with the recommendations submitted by RENEW and its member businesses regarding funding levels and program design.
But before we dive into how it happened, RENEW wishes to thank PSC Chairperson Lon Roberts and Commissioners Mike Huebsch and Rich Zipperer for their votes in support of a strong, predictable, and consistent renewable energy program for Focus on Energy!
We would also like to thank the Commissioners’ Executive Assistants and the Commission’s Focus on Energy staff team for the role they each played in setting up success for 2019 through 2022.
The Anatomy of the Victory
Our goals for the 2018 planning process were twofold: first, to lock in a stable and well-funded operating environment for renewables; and second, to integrate needed process improvements to the incentive program targeting commercial installations. Our member businesses assisted us in formulating these recommendations which were based on an assessment of recently adopted tax and trade policies and their likely effects on customer appetite for onsite renewable generation.
Our success was made possible by the participation of several influential constituencies that weighed into the formal planning docket. For the first time in Focus on Energy’s history, associations representing general contractors, builders, and architects voiced their support for a well-funded renewable energy program. Drawing upon his background representing contractors at the Capitol, Jim Boullion, RENEW’s Government Affairs Director, was instrumental in engaging these groups to submit a letter conveying their support for continuing current funding levels over the next four years.
In addition, renewable energy businesses and associations across solar, biogas, and geothermal technologies weighed in with support. These businesses span the entire state, which helped us make the point that the renewable energy program serves rural and urban areas.
Geographic Representation of Signatories
Our success in 2018 was also made possible by RENEW’s organized media outreach and recognition swings across Wisconsin from 2015 through 2017. Those events highlighted the increasing appeal of rooftop solar for commercial customers, school districts, and agricultural producers, and called attention to the Focus on Energy incentives that moved these installations to completion.
The ribbon-cuttings and award ceremonies in locations such as Racine, New Berlin, and Darlington proved effective in generating positive coverage from the press. RENEW complemented that effort with analysis documenting the renewable program’s statewide reach and effectiveness in supporting Wisconsin businesses, both at the customer and contractor level.
That effort first bore fruit in October 2016, when the PSC decided to scrap the sputtering loan program and replenish the incentive budget for 2017 and 2018 with unspent loan dollars totaling more than $8.5 million. With that commitment in place, renewable energy businesses could bank on a relatively stable and adequate funding base, and break free of the fits and starts that had hampered their ability to meet growing customer demand.
Getting the 2017 and 2018 programs in place and, through our members, showing them to be successful gave us a strong negotiating position to showcase “what is working” and to advocate for continued rebate funding for 2019-2022.
In the end, it was a combination of RENEW’s strong advocacy on behalf of our member businesses and allies, and the PSC’s desire to see the program succeed that led to this positive outcome. We are fortunate to have so many actively engaged members who understand the value of speaking up with a unified voice.
Said RENEW Executive Director Tyler Huebner: “The Commissioners definitely heard the collective comments of our industry and stakeholders to make the renewable energy program as streamlined and business-friendly as possible. RENEW Wisconsin will continue to work with the Commission, PSC staff, and the Focus on Energy program administrators to make the programs simple for customers and the renewable energy marketplace, while ensuring cost-effective outcomes.”
Once again, thank you to our Members and Stakeholders who supported our positions, and to the PSC Commissioners, Executive Assistants, and Staff who all played instrumental roles in this process.
We look forward to a strong Focus on Energy renewable energy program for 2019 through 2022!
RENEW’s summer tour of renewable energy projects to help educate legislators and local officials about renewable energy continued on May 30th, as I helped to coordinate a visit for State Senator Howard Marklein, Representative Ed Brooks and Jon Hochkammer of the Wisconsin Counties Association to the Sauk County Health Care Center to showcase a new solar project that was one of two arrays that were approved last year by the Sauk County Board.
The project was made possible through the use of a third-party investor that allows the county to benefit from the projects without any upfront cash outlay. Eagle Point Solar, who built the project, is also the initial investor/owner of the installations. Financing for the project, which included a Focus on Energy grant, provides an option for the county to purchase the arrays after seven years and potentially save money on their utility bills. The cumulative cash flow savings from both projects over a 25-year period is projected to be more than $550,000 for the county!
As quoted in a local newspaper story, Mark Hanson, director of sustainable services for Hoffman Planning, Design and Construction who helped coordinate the project said “It is groundbreaking for a Wisconsin county because some counties are just getting into it with this combination of both the solar and third-party financing.”
Eagle Point Solar General Manager Jim Pullen said from an investor’s standpoint, there are advantages to having another party in the project. “We have the ability to monetize the tax credits and monetize the depreciation and therefore our cost to build this solar array is less than if the county just wrote us a check,” Pullen said. “Therefore we pass that lower cost back to the county by way of a lower energy rate.”
Focus on Energy, the state’s ratepayer-funded energy efficiency and renewable energy program, continues to yield dividends for Wisconsin’s economy.
An independent analysis of program investments in 2015 and 2016 shows that energy savings from completed projects generated $208 million in economic benefits and supported about 1,200 jobs annually.
The Cadmus Group, an independent third-party evaluator, found that Focus on Energy achieved a benefit-cost ratio of $3.24 per dollar spent without factoring in broader economic impacts such as job creation. When broader economic impacts are factored into the analysis, the benefit-cost ratio rises to $4.77 per program dollar invested.
Cadmus released its findings in a January 2018 report submitted to the Public Service Commission of Wisconsin, which oversees the Focus on Energy program.
“A $4.77 return on investment shows Focus on Energy is one way Wisconsin encourages economic development and grows its favorable business climate,” said Public Service Commissioner Lon Roberts in a press release dated January 29, 2018.
“When a business saves money by saving energy, it also becomes more globally competitive,” Commissioner Roberts added.
For more information, view the full report or executive summary on Focus on Energy’s website, www.focusonenergy.com.