June 19, 2012

Report: Renewable projects led to 1% hike in state power rates

By Thomas Content of the Journal Sentinel | www.jsonline.com 18 June 2012

A report from the state Public Service Commission tallies the cost of complying with the state’s renewable power standard, concluding that it sent power rates up about 1% through 2010.

The report found that Wisconsin’s renewable projects accounted for more than 7% of sales in 2010, or nearly twice the level of 2006, when the standard was adopted by the state Legislature.

Since 2007, the commission has endorsed proposals to build $1.7 billion in utility-owned renewable projects, primarily wind farms built in Wisconsin and nearby states.

The report doesn’t account for about $500 million worth of projects, which were not completed as of 2010.

Large projects like new power plants are paid off over time, so the cost of adding those was about $200 million, or an increase of 1% of utility sales, the report estimated. The estimate is based on a comparison of the cost of the projects with the average market price of power sold on the wholesale Midwest energy market during the period.

Wisconsin’s standard requires increases in the amount of renewable energy that utilities buy or build, so that 10% of utility sales in 2015 will come from renewables such as wind, solar and biomass projects.

The standard was enacted in 2006 with bipartisan and near-unanimous support. The state Assembly co-author of the bill, Republican Phil Montgomery, is now chairman of the state Public Service Commission.

“As Wisconsin lawmakers consider the appropriate balance to achieve affordable, reliable, and sustainable energy, it is important to have access to information about the effect of policies that are currently in place,” Montgomery said in a statement.

Commissioner Eric Callisto, who chaired the PSC under Democratic Gov. Jim Doyle, said the analysis “confirms that balancing the state’s generation portfolio with clean, renewable energy facilities comes at a reasonable cost to consumers.”

Commissioners recommended that the PSC consult with utilities and utility customer groups before issuing the next report two years from now.

“The investment in renewable energy has been reasonable,” said Charlie Higley, executive director of the Citizens’ Utility Board, a customer group. “Renewable energy also provides other benefits, such as fewer impacts on the environment, local jobs in the renewable energy industry and payments to local landowners and governments that host renewable energy facilities.”

More renewable costs will hit utility bills in the next few years, especially for customers of Milwaukee-based We Energies.

A group representing large energy users said the report could help shape policy choices for how Wisconsin can keep its manufacturing base competitive.

“The report probably needs to be looked at in the context of Wisconsin’s unique economy and circumstances,” said Todd Stuart, executive director of the Wisconsin Industrial Energy Group. “Today we have some of the highest rates in the Midwest and we have a good deal more electric supply than demand.”

URL to article:  https://www.wind-watch.org/news/2012/06/19/report-renewable-projects-led-to-1-hike-in-state-power-rates/