Transitioning an Old House to All Electric- A Guest Blog

Transitioning an Old House to All Electric- A Guest Blog

Beneficial electrification discussions often revolve around transportation electrification, specifically how electrifying vehicles can reduce emissions and offer cost savings for consumers. However, an under-discussed and equally important part of beneficial electrification is the building sector. At 24% direct emissions, the building sector comprises the largest end-use emissions in Wisconsin. Read further to learn about Susan Millar’s journey towards electrifying her home, including her installation of an air-source heat pump for greater heating and cooling energy efficiency.

The companies, technologies, and programs endorsed in this blog are not necessarily recommended or endorsed by RENEW Wisconsin. The following information and personal experience is illustrative of the process to electrify a residential property in Wisconsin.


Are you wondering how to convert an older single-family home with a forced hot-air heating system, a gas water heater, and a gas stovetop from gas and electric to electric-only? I have done that with a 90-year old house on the near west side of Madison. And because it took a fair amount of time, I am sharing the process I used. Before describing this process, I provide important context.

Context for Transitioning to All-Electric

  • “Natural” gas is fossil gas. It must, and will, be phased out over time as our society gets more serious about reducing climate-warming emissions. In some municipalities, bans on gas in new construction are already in place.    
  • Air source heat pumps (ASHPs) are the energy-efficient electric-powered alternative to gas heating systems. ASHPs both heat and cool your house (no separate AC device needed). They have a high coefficient of performance, so while they use electricity, the amount is much less than, say, what an electric space heater or traditional AC unit uses. See, for example, this video description of ASHPs. 
  • Air source water heaters (also called “hybrid” water heaters) work the same way as ASHPs except they exchange air with your basement instead of the air outside. They are far more efficient than traditional electric water heaters.
  • Our state’s Focus on Energy program provides rebates for air-source air and water handling systems. The installers handle this process. (I am not sure of the size of these rebates.)
  • MG&E’s monthly (gas) service charge is $22. If you stop your gas service and start it again, they will bill you for monthly service charges for up to 12 months prior to the time you start again. That is, you cannot stop your gas service except for, say, the month of January without paying for up to 12 months of service.
  • If you have not yet, or cannot install, solar panels on your roof, you can sign up for MGE’s shared solar program.
  • If you have an EV and are willing to charge it and also run your dishwasher, etc during MG&E’s low-rate (off-peak) period (from 9 pm to 10 am on weekdays, and during weekends and holidays), you can substantially reduce your electricity bill. To do this, call MG&E and ask them to add you to their ‘Time Of Use’ program.
  • Yes, you have to lay out money ahead of time to transition from gas, and I am aware that many people cannot do this. The financial payoff comes over time. For example, while paying both gas and electric service charges, and charging my EV at home, my MG&E bill this summer was between $20 -30 per month. This is largely due to having rooftop solar and Time Of Use electricity rates. While my utility bills will be higher this winter, they will be reduced by the $22 monthly gas service charge and will be substantially less than prior winters. For me, another major advantage is that I am emitting essentially no carbon dioxide to run my home and car.

Steps for Transitioning to All-Electric (used by an early adopter)

  1. Get an energy efficiency analysis. This is very important because if you switch from a furnace powered by an unlimited amount of gas to an ASHP, it’s important that your house holds its temperature (in winter or summer) as effectively as possible. I used a local energy efficiency consultant. He did a superb job.
  2. Improve your insulation. If your energy efficiency analysis indicates that your house needs insulation, then arrange to get it. I used a small local company that treated my home as if it was their own. I felt the difference immediately, even in summer.
  3. Replace your gas stovetop (both to get off of gas and because much new research indicates respiratory health problems are caused by gas stovetops). As I have a unit with an electric oven and gas stove, I purchased two Cuisinart’s Double Induction Cooktops (not expensive), which I placed over the gas burner area on my stove and just plugged in. (Induction stovetops work great, and are much easier to keep clean.) 
  4. While doing steps 1 & 2, get contracts with the HVAC and plumbing company you will use. I started with the local HVAC company that I was used to. They proposed an ASHP system that would heat my house to +14F degrees and required that I retain my gas furnace for backup in the winter. As I want to eliminate the year-round monthly gas service charge, I turned them down. I tried 3 other local companies. Same response. I looked wider and found a company located near Milwaukee. In light of the energy efficiency and size of my house, they proposed to replace my gas furnace and AC units with a Mitsubishi P system that will efficiently heat my house to -14F, and then shift to an electric element (low efficiency) backup system for super cold snaps. Their price? Same as the local HVAC folks who proposed installing a +14F system with gas back-up. I accepted Midwest’s proposal. Moreover, they agreed to install my (still effective and efficient) gas and AC units in the home of a friend who has very inefficient HVAC systems – so the embedded carbon in those devices is not immediately trashed. (FYI, I informed the local HVAC companies of my decision – they lost my business to a more cutting-edge, non-local competitor.)
  5. Meanwhile, after checking different local plumbers, most of whom do not install hybrid water heaters, I found a small local plumbing company that proposed to install one of these at a very decent price. I happily accepted his bid.
  6. Both the HVAC and plumbing companies I signed with encountered installation delays because ASAP and hybrid water heater manufacturers are having sourcing issues. These problems are either due to Covid shipping issues or because the manufacturers are sending their stock to states that are ahead of us on installing these systems. Demand pushes the market.
  7. Both the hybrid water heater and the ASHP have easy controls and work superbly. For the mid-October to mid-November billing period, the first during which I used electricity to heat water, heat the house, and charge my EV, I used 664 kWh. My MG&E bill was $54. In round numbers, they charged me $42 for connection and distribution services, $15 for contributions to their Shared Solar, Green Power, and Low-Income Assistance programs, and $37 for electricity used at variable rates. (I have “Time of Use.” Most of my use was at the very lowest rate.) They credited me $39 for “net energy exported at variable rates” (kWhs from my solar panels), and $2 for “fuel cost.” All that suggests that I paid $-2 for electricity provided by MG&E.
  8. If you would like cost or contact information for the energy efficiency, insulation, HVAC, plumbing, and electrician contractors I used, just email me at sbmillar@gmail.com.

Susan Millar, September 2021

Smaller Solar Farms in Wisconsin – Why More Are Needed

Smaller Solar Farms in Wisconsin – Why More Are Needed

For decades, utility investments in power plants and transmission lines have been predicated on the concept of economies of scale. The theory behind it is beguilingly simple: the larger the installation sought by an electric utility, the lower the unit cost of the investment, which utility planners and regulators regard as a measure of economic efficiency. When loads are growing, the “bigger is better” paradigm is often an economically rational fit for electric utilities seeking to recover large-scale capital investments in fossil generation over the broadest possible cohort of current and future customers.

But solar power, the default resource option for electric providers today, is a somewhat different animal due to its scalability. Yes, economies of scale can certainly reduce the unit price of solar generating capacity, but other on-the-ground factors can influence the economics of this resource. These factors include but are not limited to the cost of acquiring site control of the host properties and obtaining all the necessary approvals to construct the project. Interconnection costs can be high as well, especially for larger projects requiring additional land and approvals to supply power to the grid.

These thoughts came to mind after visiting two smaller solar farms that started producing power this year. The first project, called Strobus Solar, was developed by OneEnergy Renewables and serves Jackson Electric Cooperative. The second installation, O’Brien Solar Fields, was one of the stops in this September’s Ride with RENEW bicycle tour. Developed by EDF Renewables and owned by Madison Gas and Electric (MGE), this 20 MW solar farm in Fitchburg supplies electricity to seven MGE customers under long-term contracts.

At a Glance
Solar For the Distribution Grid – 2021
Project name Strobus Solar O’Brien Solar
County of location Jackson Dane
Capacity (in MWac) 1.5 20
Project developer OneEnergy Renewables EDF Renewables
Project owner Greenbacker Capital Madison Gas + Electric
Utility territory Jackson Electric Madison Gas + Electric
General contractor Arch Electric Boldt Construction
Landowner Northern Family Farms O’Brien Brothers Farm

 

Governor Evers and the Project Developer, Eric Udelhofen, from OneEnergy Renewables at the Ribbon Cutting Ceremony for the Strobus Solar project.

Strobus – A Mastodon Solar project

Occupying a mere 12 acres, Strobus Solar is located about six miles north of Black River Falls and is tucked into a compact parcel framed by evergreen trees and U.S. Highway 12.  On a cloudy September day, more than 50 people attended a ribbon-cutting ceremony for the Strobus project, one of eight solar farms in southeast Minnesota and west-central Wisconsin that make up OneEnergy’s Mastodon Solar portfolio. With a combined 17 megawatts (MW) of AC-rated capacity, all eight Mastodon solar farms are located in the territory served by rural electric cooperatives. 

As noted on OneEnergy’s website, “the electricity generated by each project will be purchased by the local participating electric cooperative, resulting in savings on energy supply and increased resiliency. These savings will be passed onto the cooperative’s members. The available Renewable Energy Credits will then be sold separately to visionary buyers committed to ensuring their renewable energy procurement dollars are devoted to new projects that serve local communities.”

Of the four Mastodon projects located in Wisconsin, Strobus is the second to be energized this year, following Blue Prairie, a 2.5 MW installation southwest of Black River Falls. The other two, Stromland and Shamrock, should be operating before the end of this year. Plymouth-based Arch Electric is the general contractor for all four Wisconsin projects.

Governor Evers spoke at the ribbon-cutting ceremony, along with representatives of Jackson Electric Cooperative, Arch Electric, and Northern Family Farms, the participating landowner. Based in nearby Merillan, Northern is Wisconsin’s largest Christmas tree grower, operating on more than 7,000 acres. After the prepared remarks, OneEnergy and Arch opened the gates to let Governor Evers and other guests circulate through the project and ask questions.

On one corner of the Strobus parcel is the substation that feeds the solar-generated electricity directly into the wires overhead. Though the equipment onsite is brand-new, low-growing grassy vegetation has already been established, covering the entire project footprint. After three years, the mix of deep-rooted, primarily native plants will provide a healthy habitat for birds, insects, and other species. At nearby Blue Prairie, sheep are already grazing around and under the 7,000 panels installed there. 

Strobus is expected to generate about 3,000 megawatt-hours of electricity a year. But the Renewable Energy Credits associated with that output will not flow to Jackson Electric. They will instead be sold to Native, a Public Benefits Corporation, through its New Renewables Portfolio. 

According to Native’s website, the purpose of the Portfolio “is to enable Renewable Energy Credit (REC) buyers to play a causal role in actualizing new renewable energy projects. Native has committed to a 10-year renewables purchase agreement with Strobus, LLC on behalf of Portfolio investors. Without this type of long-term REC purchasing agreement, this project would not be economically viable.”

O’Brien Solar Fields in the city of Fitchburg, Wisconsin. 

O’Brien Solar – Clean Energy Produced Offsite for Larger Customers

Occupying 130 acres along the edge of urban Fitchburg, O’Brien Solar Fields is as large as a distributed solar project gets. However, while every kilowatt-hour produced at O’Brien flows directly into Madison Gas and Electric’s distribution grid, only seven customers see the impact of this project on their utility bills. Those customers are the State of Wisconsin, University of Wisconsin-Madison, City of Fitchburg, Promega, Placon, Tribe 9 Foods, and Willy St. Co-op. 

Energized this summer, O’Brien Solar is the newest Renewable Energy Rider (RER) project serving MGE customers. Several years ago, MGE received approval from the Public Service Commission (PSC) to build solar farms to serve individual customers, including those with multiple facilities, through its RER program. Unique to MGE, this service allows customers to be served by one larger solar farm instead of building numerous solar systems to supply each of their facilities. 

A voluntary program, MGE’s RER program does not affect base electric rates. Participating customers fully absorb the cost of MGE’s investment in the solar arrays, and these costs are spread over 30 years. The electricity generated at O’Brien offsets grid power that would otherwise flow to these customers at specified prices throughout the contract term. Should standard electric rates rise faster than the agreed-upon pricing for O’Brien’s electricity, the savings will flow directly to the participating customers. 

This unique model combines elements of both behind-the-meter generation and community solar power. But in order to entice customers to access brand-new yet low-cost sources of power, the project owner must design and develop projects that are competitive with the utility’s own avoided cost of power. 

The question arises, what did MGE do to keep O’Brien’s development costs in line with its investments in larger solar projects and make it an affordable option for customers?

First, the project occupies only one parcel of land, the former Stoner Prairie Dairy owned and operated by the O’Brien brothers over several generations. Though the parcel is adjacent to a rapidly growing neighborhood, the project’s configuration allows the O’Brien family to maintain its most profitable farming operations as well as live in their long-time residence. Negotiating with only one landowner gives a developer more room in tailoring the project to avoid potentially expensive workarounds. 

Second, from an electrical perspective, the project is divided into three zones, each with a separate interconnection to MGE’s feeder lines. By spreading out the project’s output in this fashion, MGE could forgo the more significant expense of running a large tie-in line to the closest substation.

Third, much like a 30-year residential mortgage, the RER contract is a powerful tool for breaking down a significant capital outlay into a manageable expense for the customer. Just as utilities rely on extended depreciation schedules to help them digest the costs of building central station power plants, the RER service provides a similar benefit to participating customers.

In the end, the all-in cost of O’Brien Solar Fields amounted to $29.5 million, which, on a unit basis, comes to $1,475 per kilowatt (kW). To put that number in perspective, the unit price of six larger solar farms totaling 414 MW that Alliant Energy proposes to acquire is $1,449 per kW. In fact, O’Brien’s unit cost is within 10% of the estimated cost of acquiring a 20 MW share of a project ten times as large. 

Moreover, it took only three years for EDF Renewables, O’Brien’s original developer, and MGE to advance this power plant from the concept stage to fruition, a relatively speedy turnaround compared with larger solar installations. 

Conclusion: The Policy Case for Smaller Solar Farms

Indeed, small solar farms can deliver affordable electricity at a reasonable price by avoiding the increased complexities and additional permitting hurdles associated with larger solar farms that tie into the transmission system. Moreover, while larger solar farms make a great deal of sense in areas rich in transmission infrastructure, relying solely on those locations would exclude much of Wisconsin from being able to host solar power. 

There are many parcels of land throughout Wisconsin that have the requisite attributes for hosting projects on the scale of Strobus and O’Brien. In addition, projects of that size are ideal vehicles for community solar offerings, designed to deliver zero-carbon electricity to subscribing customers who cannot access solar power at their residence or business. 

Over time, with increases in system power costs looking very likely, the state should explore and adopt policies to promote smaller solar farms within its boundaries. As exemplified by the Strobus and O’Brien projects, development on that scale can yield faster results at comparable costs while potentially providing a reliable revenue stream to the many thousands of landowners who don’t live near high-capacity transmission lines and substations.

Wisconsin is in the beginning stages of an energy revolution. With a more forward-looking policy framework, Wisconsin could emerge as a national leader in solar power. Embracing distribution-level solar solutions now will help more Wisconsinites participate in the benefits of these projects and give every city, town, and village a solar project to call their own. Wisconsin’s population is distributed throughout the state–our renewable energy portfolio should be as well. 

Clean Energy Takes Front Row Seat at Renewable Energy Day at the Capitol

Clean Energy Takes Front Row Seat at Renewable Energy Day at the Capitol

On October 13, RENEW Wisconsin and Wisconsin Conservative Energy Forum (WCEF) hosted their first-ever Renewable Energy Day at the Capitol in Madison. The event included issue briefings by industry experts on a variety of legislation that has been introduced this year related to the solar and electric vehicle industries. Attendees then went to the State Capitol to speak with their legislators to gain support for these important issues.

During a welcome reception, the evening before the Day at the Capitol,  RENEW and WCEF held a panel discussion “Energy in Transition: Policy and Politics.”

From right to left were moderator, Scott Coenen (WCEF), Dan Ebert (former PSC Chairman), Senator Rob Cowles, Larry Ward (Conservative Energy Network), and Jim Boullion (RENEW Wisconsin).

The panel discussed the current uncertainty in world energy markets and the impact that energy shortages and spiking prices will have on the world. There was consensus from the conversation that panelists believe renewables can help stabilize much of this energy uncertainty, but that the industry needs to be realistic about its role in a world where supply is not meeting demand. Businesses, households, and communities in Wisconsin should be empowered to invest in their own energy generation. 

Before attendees went to the Capitol to meet with their legislators, there was an issue briefing with a panel of industry experts moderated by Jim Boullion, Director of Government Affairs for RENEW Wisconsin. The panelists explained in detail what legislative proposals were currently before the legislature, how they will impact renewable energy in Wisconsin, and what arguments are being made on both sides of the issue. 

Issue briefing panelists, Left to right: Jason Mugnaini (Chief of Staff, State Senator Rob Cowles), James Fenley (SJL Government Affairs & Communications), Peter Lund (Financial Structuring Associate, Nautilus Solar Energy), and Amy Heart (Senior Director, Public Policy, Sunrun).

The first panel discussed two solar-related issues: 

  • Expanded Development of Community Solar – (SB 490 / AB 527 – Sen. Stroebel and Rep. Ramthun)  This bill would authorize the development of non-utility owned community solar projects and provide access to the economic and environmental benefits of solar for those who can’t afford the full cost of a system, live in multi-family housing, or own property that is not suitable for solar. 
  • 3rd Party Financing/Leasing – (LRB 1550/1 Sen. Cowles and Rep. Cabral-Guevara) This legislation would clarify that 3rd party financing/leasing of renewable energy equipment is legal in Wisconsin, providing affordable financing options for people, businesses, municipalities, or not-for-profit entities who don’t have the resources to pay for solar on their own property.
Learn more about how to support these two bills at www.wisolarcoaliton.com.

 

The second panel, moderated by RENEW’s Jeremy Orr, Emerging Technology Program Manager, discussed electric vehicle issues such as Wisconsin’s recent Direct Electric Vehicle Sales legislation, SB 462 / AB 439  (Sen. Kooyenga and Rep. Neylon)Albert Gore, Policy and Business Development at Tesla, discussed how allowing manufacturers to sell electric vehicles directly to consumers creates greater access to the electric vehicle market, resulting in growth in the traditional dealership model. Read Jeremy Orr’s previous testimony on this issue here.

Likewise, Justin Ackley, Public Policy Manager at ChargePoint, spoke to the business clarity and consumer transparency that AB 588 / SB 573  (Sen. Cowles and Rep. VanderMeer) would provide, as it would allow non-utility-owned charging stations to charge by the kWh. Similar to a gas pump, where the price per gallon is displayed, kWh charging tells electric owners how much energy they’re paying for, regardless of how long it takes to charge their vehicle. The panel pointed out that while the main goal of this legislation is good, another section of it would create problems by prohibiting charging a fee if any of the electricity going through the EV charger comes from a non-utility source such as a solar+storage system.

Emerging technology allows EV chargers to be installed in areas, especially rural areas, that have inadequate grid infrastructure and can help limit costly spikes in energy “demand charges” for charging station owners. EnTech, a division of Faith Technologies based in Menasha, Wisconsin brought one of their portable solar+storage units to Capitol Square to demonstrate how the technology works and how flexible it can be. A similar system was set up at  Bergstrom Ford in Neenah to help reduce the energy bills at their dealership. John Bergstrom, the owner of the dealership, told the story of why he worked with Faith Technologies to install the system in this podcast. 

 

The panel closed the session by discussing two other bills recently introduced by Sen. Rob Cowles:

  • $10 million in VW Settlement Funds for EV Charging Station Grants – (LRB-0254/1 Sen. Cowles and Rep. VanderMeer) Grants from these funds would be used to install electric vehicle charging stations at key locations throughout Wisconsin.
  • Energy Storage Sales Tax Exemption – (LRB-1513/1) – Sen. Cowles and Rep. Duchow) This legislation would clarify that battery storage devices installed as part of a renewable energy system should be included in the sales tax exemption that already exists for renewable energy system equipment.

The 75 registered attendees made an impact by taking time out of their busy lives and getting involved in the political process. None of these issues will be easy to pass. In fact, most of them face significant opposition from powerful forces. But working together and building coalitions with pro-renewable energy friends helps get important legislation like this adopted.  

If you would like to learn what you can do to help as well, contact Jim Boullion, Director of Government Relations at jim@renewwisconsin.org.

Wisconsin Awarded $1 Million for Electric Vehicle Planning

Wisconsin Awarded $1 Million for Electric Vehicle Planning

On Thursday, October 21st, the U.S. Department of Commerce Economic Development Administration awarded the State of Wisconsin a $1 million Statewide Economic Development Planning Grant, via the American Rescue Plan, for statewide electric vehicle (EV) adoption initiatives. The grant program is aligned with the Biden Administration’s Build Back Better Agenda to increase U.S. competitiveness and boost the economy.

Wisconsin’s Department of Administration (DOA), in collaboration with the Wisconsin Economic Development Corporation (WEDC) and the Wisconsin Department of Transportation (WisDOT), will administer the grant funds, which will focus on end-user demand, as well as EV charging station planning and EV manufacturing supply chain opportunities. 

The funding will also supplement work already underway by the Wisconsin Office of Sustainability and Clean Energy, which is developing a statewide Wisconsin Clean Energy Plan to implement advanced vehicle technologies like electric vehicles to address Wisconsin’s transportation emissions. The Office is also leading efforts on the newly released Regional Electric Vehicle (REV) Midwest MoU, which will focus on medium and heavy-duty transportation electrification across a five-state region in the Upper Midwest, as well as the Lake Michigan Electric Vehicle Circuit, which will create a light-duty electric vehicle corridor around Lake Michigan.

The potential economic growth and job creation from the grant could be substantial. Aside from creating pathways to reduce Wisconsin’s transportation emissions, the $1 million in public funds could spur a five-fold return on investment and job creation, in addition to $2.60 in private investments for every $1 of public investment spent. This means that the $1 million public investment for electric vehicle initiatives has a potential total return of $7.6 million for Wisconsin’s economic growth and job creation.

Wisconsin Businesses call for Federal Clean Energy Investment to Drive Jobs and Economy

Wisconsin Businesses call for Federal Clean Energy Investment to Drive Jobs and Economy

Thirty-one Wisconsin businesses signed a letter supporting ambitious clean energy investments and broad interest in the American Jobs Plan. The signatories, representing higher education institutions, local governments, and biogas, solar, finance, and electric vehicle industries, are committed to “advancing the clean energy economy, building family-sustaining jobs, and expanding economic opportunities for Wisconsinites.”

The letter states, “Wisconsin’s cumulative solar capacity more than doubled in the past year and is anticipated to quintuple in the next 3-5 years. Wisconsin’s clean energy workforce is 76,000 strong, and solar and advanced transportation jobs proved remarkably resilient even during the economic upheaval of 2020.” Investing in these sectors can create jobs and opportunities for Wisconsin to become a clean energy leader in the Midwest.

The electric vehicle sector is a key focus of the American Jobs Plan and an area where Wisconsin has tremendous opportunity to invest. Recent studies and RENEW’s analysis suggest that the federal stimulus funds spent on transportation electrification will yield a 500% return on investment.

Corry Bullis of U.S. FLO said that “Given President Biden’s goal to deploy 500,000 charging stations by 2030, FLO is expanding its manufacturing footprint to meet increasing demand in the U.S and support its climate and air quality goals. Incentives, as outlined by the American Jobs Plan, will be critical to delivering on this promise. We urge Congress to pass an infrastructure package as soon as possible.”

Wisconsin’s solar job market held steady throughout the pandemic. The industry continues to advance, and local job opportunities are growing rapidly, signaling clean energy investments are a bipartisan solution to growing Wisconsin’s economy and advancing careers for local workers.

Ed Zinthefer, an owner of Arch Electric based in Plymouth, WI, says, “More homeowners and businesses are saving money and supporting local jobs in their neighborhoods by going solar.  We are busier than ever, growing and hiring and building more clean energy projects. It’s a great time to get into clean energy in Wisconsin.”

Even as the renewable energy markets are growing, there is an urgent need to drive investment and expand our workforce. According to the Solar Energy Industry Association, the solar industry is on a trajectory to reach 400,000 solar jobs by 2030. However, employment will need to exceed 900,000 workers by 2035 to reach President Biden’s 100% clean electricity goal.

Sign your name to support federal investment in clean jobs here in Wisconsin!

MGE Rate Settlement a Big Victory for Residential Customers and Clean Energy

MGE Rate Settlement a Big Victory for Residential Customers and Clean Energy

In a stunning policy reversal, Madison Gas and Electric (MGE) submitted a proposal to lower monthly charges and raise energy rates for its residential electric customers. Filed on September 3rd, MGE’s rate application is strongly backed by customer groups and clean energy organizations, including RENEW Wisconsin.

MGE’s filing is the product of negotiations over the summer with RENEW and other parties intervening in the case. If approved as is by the Public Service Commission (PSC), the agreement will pare the fixed charge for residential electric service from $19 per month today to $17 per month in 2022 and $15 per month in 2023. At the same time, energy rates will rise to offset the proposed reduction in the fixed charge.

The monthly fixed charge is the minimum amount assessed on residential customers for electric service. These charges do not vary with energy consumption levels. Hiking fixed charges invariably depresses the volumetric rate assessed to energy consumption, penalizing customers who use relatively little electricity and those who supply themselves with solar power produced onsite. Alternatively, lowering fixed charges and raising energy rates should achieve the opposite result by sending a stronger price signal to incentivize customer investments in energy efficiency and onsite solar.

“Low-income customers, solar customers, and customers who have invested in energy efficiency to reduce energy bills will benefit from this shift,” said Heather Allen, Executive Director for RENEW Wisconsin. “Overall, MGE customers will benefit because reduced energy demand helps limit the need for additional generation capacity. This is a win-win.”

The settlement avoids a contested case hearing in which Citizens Utility Board (CUB) and RENEW had been planning to submit testimony demonstrating that the $19 per month charge was excessive, especially in an urban service territory where the majority of electric customers are renters living in multifamily dwellings.

The MGE settlement follows a similar one struck with Xcel’s Wisconsin utility several months ago. Under the terms of that settlement agreement, which RENEW, CUB and other organizations signed onto, Xcel agreed to lower its fixed charge for residential electric service from $17 per month to $16 per month in 2022 and $15 per month in 2023. As with MGE, Xcel’s energy rates will also increase.

Other positive outcomes of the settlement include MGE’s support for a low-income thermostat pilot program, exploration of further innovative ways to help low-income customers achieve lower energy bills, and MGE’s increased support for smart thermostats and technologies, such as controlled water heaters, heat pumps, and battery electric storage in future filings.

The PSC is now accepting public comments on the MGE rate case. If you’d like to support the settlement agreement, please communicate your thoughts to the PSC via this public comment webpage specific to this case. For more information on the MGE rate case, see the Wisconsin State Journal article here.