Second Wind? Is it time to revisit Wisconsin’s renewable energy requirements?

RENEW Executive Director, Tyler Huebner was interviewed by Tom Breuer for the May issue of InBusiness Magazine

“If you’ve managed to survive even one brutal Wisconsin winter (or unseasonably hot summer), you know that looming utility bills can often creep into your daydreams and nightmares on a moment’s notice, eating away at your peace of mind well before they have your kids’ college fund for lunch.

If you’re a small business owner who pays his or her own heat or electricity, you’ve got double trouble, and in addition to unpredictable weather, unforeseen rate increases can be the difference between shivering in the dark and avoiding a deep freeze.

So imagine if your utility bills ran into the hundreds of thousands every month instead of the hundreds. Well, there are plenty of Wisconsin ratepayers — big manufacturers and other commercial energy consumers — who don’t have to imagine. They live that reality. And they are skittish about a recent proposal to beef up Wisconsin’s renewable energy mandate from its current 10% threshold to 20% by 2020 and 30% by 2030 — a move that, many believe, would spike energy prices that are already high in comparison to other states.”

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Wisconsin needs ambitious clean energy goal : Wisconsin State Journal

Wisconsin needs ambitious clean energy goal : WSJ

See also the April 27, 2014 response by Keith Reopelle, Clean Wisconsin

The paramount environmental issue this Earth Day, which arrives Tuesday, is climate change. Wisconsin, our nation and the world need solid steps forward to stem the worst impacts of rising temperatures.

The most recent report from the Intergovernmental Panel on Climate Change suggests the world could quickly transition from fossil fuels to renewable energy and lose just 0.06 percent of annual economic growth.

But the IPCC’s rosy prediction ignores some realities. Foremost, many industrial nations, including the United States, lack the political will to make such wholesale changes.

Yet change is possible and necessary. Even as nations search for common ground, state and local actions hold promise.

Read more…

More on the Game-Changer Narrative

Note: This update follows my commentary posted last week documenting emerging changes in the U.S. natural gas market picture and discussing whether the altered picture will occasion additional repricing upward to balance supply with expected demand increases.
–Michael Vickerman

On February 6th, EIA reported that natural gas storage volumes were 270 billion cubic feet (bcf) under last week’s withdrawal numbers.  That number reflects data submitted to EIA on January 31st.

Going into February this year, the quantity of natural gas in storage (1.923 bcf) is half of what it was at the start of the current heating season (3,834 bcf). The heating season generally ends around April 1.
I expect the next EIA report (February 13) to easily surpass the 200 bcf threshold.

In the previous 10 years, the largest amount of gas withdrawn from inventories during the entire heating season was 2,311 bcf. That occurred during the winter of 2007-2008. Thus far this season, a total of 1,911 bcf has been taken out of storage. If the next two reported withdrawals (Feb. 13th and 20th) exceed a combined total of 400 bcf, this winter’s withdrawals will exceed that total, and that will happen before the end of February.

Though this is shaping up to be the coldest winter in 20 years, the price of natural gas still remains below $5.00. How many more weeks of below-average temperatures will it take to move the floor price of natural gas to $5.00 and higher? The game-changer narrative is still hanging tough.

Over the weekend, I checked Chicago and Madison weather forecasts for the week of February 10th. To the extent there is a warm-up in sight, it will happen Thursday and Friday. This respite will bring temperatures back to seasonal levels, but don’t expect it to last. The weather forecast in Madison for the Valentine’s Day/President Day weekend heralds a return to below-normal temperatures.

The cold weather is also taking a bite out of current extraction volumes, as evidenced in the highlighted passage of the Bloomberg News article below. While pace of extraction will definitely pick up as winter gives way to spring, the question going forward is whether supply can increase by a record-setting 2.7 trillion tcf between the end of the current heating season and the beginning of the next. We’re starting to enter uncharted territory.

Incentives for Solar and Wind Energy Suspended Again

PSC Delivers Another Blow to Beleaguered Renewable Energy Contractors

Immediate release — For the second time in three years, state of Wisconsin incentives for customer-sited solar and small wind systems will be suspended, a result of recent Public Service Commission (PSC) decisions affecting Focus on Energy’s renewable energy budget . The suspension will take effect August 13, according to Focus on Energy, and will run through the remainder of the year. Incentives for biogas and biomass installations are not affected by the PSC’s decisions.

The impending cut-off of solar and wind incentives follows an across-the-board suspension of  
renewable energy incentives that lasted one year before being lifted in July 2012. Focus on Energy is authorized to spend up to $10 million per year on renewable energy incentives. 

Through May 2013, Focus on Energy had spent or obligated a total of $3,048,580 for projects  
expected to be placed in service this year. The suspension ensures that overall renewable energy awards in 2013 will fall well short of the $10 million maximum. 

In 2012, the PSC established a two-tiered funding formula that allocates renewable energy 
incentives based on resource type. So-called Group 1 resources—biogas, biomass and geothermal (ground source heat pumps)–are eligible for 75% of program expenditures up to a maximum of $7,500,000 a year. Funding for so-called Group 2 resources—solar and small wind—cannot exceed 25% of renewable energy expenditures. 

Under this structure, outlays for Group 1 resources determine the overall funding level for  
renewables, even though up to $10 million is available in a given program year.As a result of the funding suspension, no renewable energy incentives will be available to residential customers until 2014. Residential customers account for approximately 60% of Focus on Energy’s program dollars.

The following represents RENEW Wisconsin’s reaction to the suspension of incentives for solar and wind energy systems. RENEW Wisconsin’s advocacy was instrumental in creating a renewable energy component to Focus on Energy.

“First, let’s not stop these incentives simply because the accounting is difficult,” said Executive  Director Tyler Huebner. “That may seem like the easiest fix for decision-makers in Madison, but this is going to cost jobs throughout Wisconsin, especially amongst the small businesses that do this work. Second, if the accounting is difficult, and we agree that it is, then let’s change it. The decisions to make the accounting difficult were made by the same three Commissioners just last year, and this recent decision only adds to the complexity.” 

“The disruption to solar and wind incentives will inflict measurable financial hardship on 
contractors operating here, and will result in a net contraction of sales and jobs. This decision will likely force these contractors to shift the focus of their business to other states that are doing a better job of supporting solar and wind.” 

“On several occasions before this decision, we communicated to the PSC the tenuous nature of the solar market today, and our best forecast of the likely impact from a disruption in the flow of incentives. By all appearances, the views of Wisconsin’s solar contractors were disregarded.”

“Yesterday, we sent a letter to the PSC asking it to reconsider this decision. This Friday, we will file comments with the PSC regarding future Focus on Energy planning, and our primary goal is to simplify the provision of incentives going forward. In our view, the current structure has proved to be an administrative nightmare, and this latest decision will worsen this already bad situation.”
“Finally, we don’t believe that providing policy support for the advancement of solar energy should be a partisan issue. It certainly isn’t in Georgia, where that state’s all-Republican utility commission ordered Georgia Power to acquire nearly 800 megawatts of solar by the end of 2016, effectively tripling what the state’s largest electric utility had already committed to provide.”
“It’s time for Wisconsin regulators to see the light on solar and let it drive our state’s economy forward,” Huebner said.

New Report: Wisconsin Ranks 26th in the Nation for Solar Power

Wisconsin Environment Research and Policy Center’s report Lighting the Way: What We Can Learn from America’s Top 12 Solar States identifies the twelve states making the greatest contribution to the rise of solar power in the United States. The report observes that while Wisconsin’s solar capacity is growing, this growth is far behind the increase observed in the report’s top ranking states, lagging behind enough to earn Wisconsin a ranking of 26th in the nation for per capita solar installations. The full report and the press release below identify the strong renewable energy policies adopted by the top ranking states and the reasoning for Wisconsin’s low ranking.  

Milwaukee – Today, Wisconsin Environment Research & Policy Center releasedLighting the Way: What We Can Learn from America’s Top 12 Solar States, a new report highlighting a solar energy boom across the country. The report outlines the twelve states that have made a considerable contribution to the nation’s rise in solar power. Wisconsin however, missed the cut and ranks 26th in the nation for per capita solar installations. Last year, solar capacity in Wisconsin grew by 7% bringing it to a total of 14 megawatts. But Wisconsin still trails behind leading solar states such as New Jersey that has more than 50 times as many solar installations per capita than Wisconsin. 

“The sky’s the limit on solar energy,” said Megan Severson, State Advocate with Wisconsin Environment. “The progress of other states should give us the confidence that we can do much more. Our message today is clear: If you want your state to be a leader in pollution-free solar energy, set big goals and get good policies on the books.” 

Solar is on the rise across the country. America has more than three times as much solar photovoltaic capacity as it did in 2010, and more than 10 times as much as it did in 2007. And now the price of solar panels fell by 26 percent in 2012. Wisconsin Environment attributed the solar boom to the leadership of state officials, especially those in states profiled in the report. 

“More and more, homes and businesses are turning to solar as a pollution-free energy source with no fuel costs,” said Severson. “With the increasing threat of global warming, Wisconsin must become a leading solar state.”