Excerpts of a letter from PSC Chair Eric Callisto to the special legislative committees on clean energy jobs:

February 19, 2010

Assembly Special Committee on Clean Energy Jobs
Wisconsin State Assembly
Madison, WI 53702

Dear Committee Members:

I am writing in response to a letter dated February 9,2010 from Representatives Huebsch, Montgomery, and Gunderson requesting a Commission analysis of the expected costs to utilities and ratepayers of meeting a 25% by 2025 Renewable Portfolio Standard (RPS) as proposed in the Clean Energy Jobs Act. As I have testified to both the Assembly and Senate Select Committees, the electric utility sector policies in the proposed legislation – namely, the enhanced RPS and energy efficiency provisions – represent sound energy policy for Wisconsin. The Commission’s analysis shows that if we continue with business as usual, if we decide to do nothing, we are taking on great financial risk in a changing world, and our ratepayers will be leaving substantial dollars on the table.

. . . [W]hat follows is a summary of preliminary PSC cost modeling of the RPS and energy efficiency components of the CEJA. PSC staff modeled the costs of the RPS and energy efficiency policies together, because the RPS requirements are expressed as a percentage of retail electricity sales. It would be unrealistic to estimate the costs of the RPS requirements in the proposed legislation while ignoring that the same legislation seeks to reduce the growth in demand for electricity. The two policies are inherently connected.

The modeling shows that in every case in which GHGs are monetized (i.e., there is a compliance cost associated with emitting GHGs), the cost of the CEJA is less than the cost of the status quo over the long run. That is, we will in all likelihood be spending more on electricity in the long run if we don’t act now and enact enhanced renewable portfolio standards and take more aggressive action on energy efficiency. . . . (emphasis in original letter)