An amendment inserted into the state budget with little advance notice this week could deal a blow to development of wind power projects in Wisconsin over the next eight years.
The amendment, unveiled in Madison late Wednesday and supported Thursday by the Joint Finance Committee, would remove a cap on how much hydroelectric power utilities could use to meet the state’s renewable energy mandate.
If adopted by the full Legislature, the amendment would allow state utilities to import hydroelectric power from dams in Manitoba, using a new $420 million high-voltage transmission line that is under construction between Wausau and Duluth, Minn.
A law passed last year requires that 10% of Wisconsin’s electricity come from renewable power sources such as wind turbines and solar panels by 2015.
The law kept in place a limit on hydroelectric power that’s designed to discourage use of large hydroelectric dam projects.
“It’s generally appreciated that large hydro plants are environmentally damaging – the whole purpose of a renewable portfolio standard is to produce cleaner, greener energy,” said Lee Cullen, a Madison energy lawyer who led Gov. Jim Doyle’s task force on renewable energy.
Representatives of Wisconsin Public Service Corp. in Green Bay said they had no intention of causing controversy with the change, which they proposed to legislators from northern and northeastern Wisconsin who serve on the Joint Finance Committee.
To Wisconsin Public Service, relaxing the rule makes sense because the price of wind-power projects has escalated so much in recent years, said Charlie Severance, the utility’s manager of electric resources.
Big demand for turbines
Wind power is considered more cost-effective to develop at a large scale compared with solar power and waste-to-energy systems such as power generated from burning landfill gas. A rapid increase in development of wind projects has led to difficulty obtaining wind turbines and to higher prices charged by wind-turbine manufacturers such as General Electric Co. and Vestas Wind Systems.
“If we’ve got to go with wind, and the manufacturers of wind turbines know that they have you over a barrel, we’re just going to get killed,” Severance said. “I never want to be in a negotiation without having an alternative. You need to have a Plan B.”
Manitoba Hydro has several projects planned for new hydro power. Wisconsin Public Service, which has bought power from Manitoba Hydro for nearly 10 years, has discussed buying power from one of those future projects, Severance said.
The Green Bay utility’s plan to change state law could slow efforts to develop “home-grown” renewable energy, said Keith Reopelle, program director at the conservation group Clean Wisconsin.
“This completely undercuts the idea of utilizing Wisconsin resources and developing new renewable resources in Wisconsin,” he said.
Eric Callisto, top aide to Public Service Commission Chairman Dan Ebert, said he was disappointed that the proposal surfaced so late, was voted on without a hearing, and that a policy matter was being woven into the budget.
The renewable power law that Doyle signed last year was the product of compromises reached by a diverse group of interests, including utilities, environmental groups and large industrial customers.
That task force met for more than a year, and members said limiting hydroelectric power expansion was a key component of the group’s recommendations, Cullen said.
“It is unseemly so soon after all the hard work that members of the task force did to produce a consensus – a unanimous result – that one of the material elements of it is removed,” he said.
Sen. Dave Hansen (D-Green Bay) proposed the amendment as a way to keep electricity rates low for large manufacturers and residential customers, and to give Wisconsin Public Service more options in meeting customers’ needs, said Jay Wadd, a legislative aide to Hansen.
“We saw it as an opportunity to help protect jobs and maybe reduce some of the greenhouse emissions and make it easier to retire some of the older coal plants up there sooner,” Wadd said.
The measure passed in the Joint Finance Committee by a vote of 11-5 and will now be considered by the full Senate and Assembly as part of deliberations on the state’s fiscal 2007-’09 budget.
Sen. Jeff Plale (D-South Milwaukee) said in a statement he was “baffled and angry” when he learned of the committee’s action. Plale, the chairman of the Senate Committee on Commerce, Utilities and Rail, said it was “a shame that WPS decided to make an end-run around the legislative process and fast-track this motion” through the Joint Finance Committee.
Though some members of Doyle’s administration were caught off guard by the move, the governor hasn’t decided whether he would veto the measure, a spokesman said.
“The governor is committed to seeing more wind and more biomass, and more hydro, as well,” said Matt Canter, Doyle spokesman. “He would have to review the proposal with that in mind.”
Severance said that as Congress considers a plan to require a reduction in greenhouse gas emissions, it’s important for utilities to have flexibility in meeting that goal.
Coal-fired power plants are the leading source of greenhouse gas emissions, and new coal plants under construction by Wisconsin Public Service in Wausau and We Energies in Oak Creek are expected to result in a 10% increase in utility emissions of carbon dioxide, the leading greenhouse gas, by 2012, according to state figures.
“Global warming means global warming,” Severance said. “It doesn’t matter if the benefit comes from Manitoba or if it comes from Texas or California – or Brazil, for that matter.”
Representatives of three other state utilities, including We Energies of Milwaukee, said they were not involved in the hydropower proposal and had no plans to change their renewable power strategy if the bill becomes law.
Xcel Energy of Eau Claire, Wisconsin Power & Light of Madison and We Energies expect to use wind turbines as a key way to expand their renewable power supply, company representatives said.
We Energies is expected to start construction in summer on the state’s largest wind-power project, the 88-turbine, 145-megawatt Blue Sky Green Field project in Fond du Lac County.
The project near Lake Winnebago will cost We Energies ratepayers about $300 million, and funds for that project will be included in an electricity price increase request the utility is expected to file with state regulators this month.
If the hydroelectric proposal does become law, We Energies would review whether to buy more hydroelectric power rather than focus as much on wind power, utility spokesman Barry McNulty said. But it’s unclear, he added, how much hydroelectric power would be available.
“If it’s economic to the customers, then we’ll take a look at it,” he said.
By Thomas Content
4 May 2007
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