A commentary by Michael Vickerman, executive director of RENEW Wisconsin:
April 15, 2010
Statement of Michael Vickerman
Executive Director – RENEW Wisconsin
Legislators Fire Duds at Clean Energy Jobs Act
In an April 13 statement, Reps. Mike Huebsch (R-West Salem), Phil Montgomery (R-Green Bay), and Scott Gunderson (R-Waterford) contend that the substitute amendment for the Clean Energy Jobs Act, released earlier this week, will drive up electric rates across Wisconsin. As ammunition for their argument, the representatives point to recent requests in Iowa to raise electric rates, which they attribute to the state’s renewable energy policy.
The argument advanced by these three lawmakers is truly absurd, given the facts of the situation. In the first place, Iowa’s Alternative Energy Production (AEP) law, which dates from 1983, requires the state’s two largest electric utilities to add a mere 105 megawatts (MW) of generating capacity between them. By 1997, both utilities had achieved full compliance with that law. That mandate has not been increased or modified since that time.
Fast forward to April 2010. Windpower capacity alone in Iowa now totals 3,670 MW, and the Hawkeye State is now the second largest producer of wind-generated electricity in the nation behind Texas. According to the Iowa Policy Project, windpower accounted for 14% of the state’s electric output in 2009. Additional information on windpower development in Iowa can be accessed here.
The vast majority of Iowa’s windpower capacity was built for reasons other than complying with the state’s renewable energy policy. Iowa utilities invested in windpower because it is the lowest cost generation option available to them. Here’s what MidAmerican Energy Company, Iowa’s largest investor-owned utility, says about its windpower assets.
MidAmerican began building wind turbines in 2004 and has made the investment without raising customers’ electric rates. The price of electricity per kilowatt-hour … for MidAmerican customers is lower today than it was in 1995, and the company has committed to not seek an electric rate increase to become effective until 2014, which is nearly 20 years without a rate increase.
Given MidAmerican’s experience with windpower, it is clear that the allegation from Reps. Huebsch, Montgomery and Gunderson was spun without any apparent connection to reality. The proper place to file a claim this ludicrous is in a manure digester, where it can be broken down into usable energy.
It’s worth pointing out that a significant percentage of Iowa’s wind capacity serves Wisconsin utilities, among them Madison Gas & Electric (MGE), which owns the 30 MW Top of Iowa 3 installation and purchases additional supplies of wind-generated electricity from independently owned facilities there. These facilities were constructed after 2006, the year Wisconsin’s current renewable energy standard was enacted. Yet MGE’s residential ratepayers have seen annual rate increases of only 1.5% in the last four years. Compared with other expenses, such as college tuition, health insurance premiums, and vehicle registration fees, electricity cost increases have barely been noticeable.
Windpower’s rapid growth in the Upper Midwest has also contributed to the reduction of fossil fuel consumption, resulting in lower natural gas prices. That benefit is passed through directly to Wisconsin energy users in the form of lower heating bills. Indeed, over the last 12 months, overall energy costs declined measurably for most Wisconsin households and businesses, thanks to the prolonged slump in natural gas prices.
There is no surer way to control energy bills than to reduce the state’s reliance on imported fossil fuels through increased conservation and substituting renewable resources wherever practical. The choice before the Legislature is clear cut and momentous. Either it can embrace a 15-year commitment to invigorate the state’s economy through sustained investment in clean energy or it can decide to coast along on current energy policies until they lapse several years from now and lose their force and effect.
We at RENEW believe the Clean Energy Jobs Act will propel the clean energy marketplace into an economic powerhouse that will generate jobs and help Wisconsin businesses remain competitive. We strongly support the passage of the Clean Energy Jobs Act bill as amended.
RENEW Wisconsin is an independent, nonprofit 501(c)(3) organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives. More information on RENEW’s Web site at www.renewwisconsin.org.