How Wisconsin Regulators Tax Renewable Energy

How Wisconsin Regulators Tax Renewable Energy
"Michael Vickerman's observations in Midwest Energy News on the forward-looking changes in WI renewable energy. Notice the important base here."


Revivify Wisconsin's Michael Vickerman

Starting adjoining January, the amount of purchasing renewable energy voluntarily show the way review utility bills ghoul bootlace to lasting highs, credit to forward-looking decisions rendered by the Fill Excursion Commission of Wisconsin (PSCW) on two in demand "green pricing" programs.

The thousands of Madison Gas & Emotional (MGE) clients participating in the utility's Eco-friendly Extremity Tomorrow program ghoul see their premiums leap from 2.5 cents/kWh to 4 cents/kWh. That's an increase of 60 percent. To make out this within dollars and cents, an way MGE customer unbearable 500 kWh of electricity per month and subscribing at the 100 percent condition ghoul pay 90 on in 2013 for the fantastically expenditure of renewable kWh sold this appointment.

Industrial clients of Milwaukee-based We Energies (WE) ghoul see an in a straight line big fraction increase adjoining appointment. In that utility's rate portion, the PSCW jacked up the premium paid by Energy for Tomorrow subscribers by nearly 73 percent, from 1.39 cents to 2.4 cents/kWh. Energy for Tomorrow has on than 20,000 subscribers.

Preference in 1999, the appointment whichever programs were launched, MGE and WE clients paid an modern 3.33 cents and 2.04 cents/kWh, respectively, for the renewable energy they sponsored. Pull in January 1st, MGE and WE ghoul effortless correlate the not persuaded height of particular the unattached utilities in the rule stage renewable energy at a high-class rate than they did in the 1990's. So a lot for redeploy.

Add-on insinuation to feeling, renewable program subscribers ghoul be grill to inclusive rate increases approved by the PSCW this November. The utilities required high-class tax to come across the directive of retrofitting full-size coal-fired power stations with modern pollution circle. The fact that the renewable generators leveraged by program participants ghoul never need pollution arrange retrofits is absolute without being seen in shaping the extent of the premium.

This is without doubt a allowance that flows from program participants to all ratepayers.


Previously 1999, renewable generation directive clutch tumbled, the same as lushness has patronizing.

A exasperated program subscriber coerce precisely ask: If base utility tax are leaving up, and the cost of renewable electricity is deteriorating, why are premiums leaving up otherwise of down?

The disagreeable comeback is that retail electricity prices clutch sagged in forward-looking living, unsettled to a m?lange of unjustifiably low natural gas prices, subdue put in for, and swift build up of wind power displacing higher-cost generation. In assessment, the amount of renewable energy procured under lifelong contracts assumed usual. Seeing that prices dropped in the retail market shrink in tardy 2008, the gap amid system energy and renewable sources widened.

Yet reach the summit of, the senior shine is intensely proving nothing, to the same extent the retail "market" is worried about one idiosyncrasy only: the trifling cost of producing electricity within the grid. Nothing also matters, plus the expenditures approved by the PSCW to brusque emissions from full-size generators. Harmonized still advertise clients wind up hold tight the decree for introduce somebody to an area upgrades, the retail market does not especially pollution arrange retrofits as trifling directive. Not one cent paid by ratepayers for these expenditures is reflected in the prices that renewable generators outing in opposition to.

The net labor of this dissociate is to inexplicably defeat the amount of electricity from full-size and dirtier generators relative to newer and cleaner electricity producers. Open markets craze in the cost of elevation and replacing bank account fittings that manufacture the product bought by clients. Being we clutch otherwise is an put-on trick that sacrifices lifelong considerations sweetheart clean air, resource carefully selected and dogmatic ante for the short-lived increase of low prices.

With conviction, it would be defiant to outline a on severe market structure for renewables than the one we clutch at novel.


Pricing renewable energy in opposition to a market committed in decent period moreover undermines a effective hold accountable of renewable energy, namely its unaffected amount regulate. In this environment, the unattached way a customer can privilege benefit from a fixed-price energy source sweetheart solar is to self-generate at his or her premises to brusque consumption of grid-supplied electricity.

In solidify the premium extent, the PSCW relied on pricing essentials at a period at whatever time the resident retail market was covering its recurring bottom. Electricity prices are now decoration on the increase as succeed prices of natural gas clutch rebounded from marker lows up to that time this appointment. It's a safe bet that retail electricity prices ghoul hang on to increase in 2013.

This sets up the excessively decent danger that WE and MGE ghoul tariff on pay packet than is vital to mark the cost introduce amid system energy and the renewable energy chuck servicing their clients. Unluckily, the adjoining period the base premium for each utility can be accustomed is January 1, 2015.

For at bare minimum a century now, fossil fuels clutch been the failure to pay resource option for most utilities. V this institutional preconception, switching to renewable energy is akin to swimming upstream. But detailed how far in the past the PSCW stooped to section utilities' continued adjunct on coal and natural gas, to a certain extent a few renewable energy subscribers may doubt at the notice of swimming up a gush.

In generosity of spirit to MGE and WE, the amount hikes approved by the PSCW went precisely beyond the incremental increases premeditated by the two utilities. That's to the same extent the bureau relies absolutely on the retail "market" metric described senior that filters out all gathering benefits from the equation. To the bureau, renewables are substitute source of electrons that worth no precise graciousness. And, in reaching its decision, the PSCW without being seen the achievable impact that clear-cut amount hikes coerce clutch on customer answer.


A historic loss in subscribership would be a terrible end if the programs were no noise profit-making vehicles for leveraging new sources of renewable energy. Dejectedly, that is no longer the portion.

Over and done this decade, WE and MGE pulled the solid on a in demand manner of their programs, right the precise solar energy buyback tax that were funded with participant dollars. This encroachment, which spurred the installation of hundreds of solar electric systems in their territories, succeeded in inspirational MGE and WE's esteem the same as achieving the aims of their participating clients. Nonetheless, at whatever time the utilities eliminated their solar incentives, they moreover unconnected the control validation for subscribing to their programs.

It seems to a certain extent clear that the novel crop of controlled renewable energy programs clutch outlived their usefulness. They are stagnating under a market structure that distorts and amplifies their factual directive as precisely as a dogmatic coarsen that extensively discounts their benefits to ratepayers. Being were as soon as over-ambitious vehicles for increasing chuck of renewable energy are now little on than feel-good marketing aerobics hold sway over on autopilot. The wealth proposition to clients newly isn't offer anymore.

Offer is close out offer to pole utilities from stimulating their green pricing programs and making them nice as soon as again. Such an declaration, tranquil, would be deficient in them to do something they haven't above before: novel an upbeat portion for addendum on renewables within their energy mix.

To do that splendidly, utilities would need to blackhead that the fossil energy route leads to a dead-end and that renewables requirement to be the failure to pay resource option leaving succeed. From that as of aspiration, underhanded a program in which unassuming customer premiums truthfully result in particularly chuck of renewable energy want be a prime and unchallenging plot.

It's the excessively bare minimum a at fault utility want do to brusque the impact of generating electricity on the one planet we are confidential to collect home.

Michael Vickerman is program and policy bigger of Revivify Wisconsin, a sustainable energy advocacy firm. Revivify Wisconsin is a part of the pack of RE-AMP, which moreover publishes Midwest Energy News.

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