GP: Wisconsin RPS Off to Flying Start

["Tom Gray" <tomgray@igc.org>]

-----Original Message-----
From: mvickerman [mailto:mvickerman@renewwisconsin.org]
Sent: Monday, May 20, 2002 2:44 PM
Subject: New from RENEW

RENEW Wisconsin Newswire – May 20, 2002

Wisconsin’s RPS Off to a  Flying Start

Madison – Wisconsin utilities derived 1.26% of their 2001 sales at retail
from qualified sources of renewable electricity, according to preliminary
estimates from the Public Service Commission. This percentage is well above
the minimum requirement of 0.5% for 2001 as established under the state’s
Renewable Portfolio Standard (RPS), a component of the Reliability 2000 law
adopted in October 1999.

The RPS requires individual Wisconsin utilities to increase gradually, over
a 10-year period, renewable electricity supplies as a percentage of overall
sales. From an initial level of 0.5% in 2001, the percentage rises to 2.2%
in 2011. As of December 31, 2001, utilities acquired enough renewable
electricity in the aggregate to satisfy their 2005 requirements, set at
1.2%.

Assuming that Wisconsin utilities sell 75 billion kilowatt-hours (kWh) in
2011 (about 65 billion kWh were sold in 2000), the PSC’s figures suggest
that utilities will have to sell an additional 900 million kWh of renewable
electricity that year above the amount sold last year. That number is
roughly 18 times the estimated annual output from the state’s largest wind
farm, the 30 MW Montfort Energy Center in western Iowa County.

However, the PSC’s figures understate the pace of compliance in Wisconsin,
as several qualified renewable electricity installations started operations
after January 1, 2001. FPL Energy’s installation at Montfort was placed into
service in June, while the 80-MW Top of Iowa wind farm, located along
Interstate 35 north of Des Moines, didn’t reach full production until
December. Their combined output is sold under contract to Alliant Energy and
We Energies. If the two wind farms perform up to expectations this year
(nearly 300 million kWh annually), the percentage of renewable electricity
serving Wisconsin retail customers should equal or exceed 1.55%, the minimum
percentage for 2007.

New out-of-state generating units such as Top of Iowa can be applied to
satisfy Wisconsin’s renewable requirements, as long as the electricity is
physically delivered to an in-state utility and sold at retail.

Other renewable generating units that started operations in 2001 but will
not reach full power until this year include the 7 MW Hatfield Hydro Project
near Black River Falls and Tinedale Farms’ 750 kW dairy manure-to-methane
generating system near Wrightstown.  In a typical year, these installations
will produce about 35 million kWh.

Many Wisconsin utilities also sell renewable power through voluntary “green
pricing” programs, which enable customers to sponsor new sources of
renewable electricity through a monthly premium. While these programs have
leveraged new renewable generating units that otherwise would not have been
constructed, their contribution to the overall system mix has been dwarfed
by the volume of renewable electricity resulting from legislative policies
like the RPS and the 50 MW renewable capacity set-aside enacted in 1998.
Statewide, green pricing programs account for about 10% of the total supply
of renewable electricity acquired after January 1, 1998.

Wisconsin’s liberal renewable credit trading rules will reward utilities for
selling more renewable electricity than they need to during the early years.
A utility that exceeds the minimum percentage requirements in 2002 can bank
the excess amount in the form of renewable credits and apply them toward the
higher percentages later in the decade. As currently structured, a renewable
electricity credit created this year will be valid as long as the RPS is in
effect, further reducing the amount of new renewable electricity needed for
compliance purposes.

It is difficult to escape the conclusion that Wisconsin’s RPS as presently
constituted will not leverage new renewable generation projects until the
end of this decade. Even with  the RPS and green pricing programs, we are
only beginning to scratch the surface of the state’s renewable energy
potential, and there is a new wave of development opportunities ready to be
realized.  One person who recognizes this is Governor Scott McCallum. While
unveiling his energy plan in June 2001, Gov. McCallum indicated that
expanded production from renewable power sources was feasible and would
yield multiple benefits. “My goal is to double the amount of renewables we
use in the mix. Shoot for 4 percent … within 8 years,” McCallum said.

What is needed is an expansion of the renewable marketplace, whether in the
form of increasing the requirements through the RPS and/or stepping up the
energy and resources needed to transform the utilities’ underperforming
green pricing programs into powerful engines for leveraging new projects in
Wisconsin.

It would be most unfortunate—and a huge step backwards-- if Wisconsin’s
renewable energy development potential were to sit on the drawing boards for
the next 10 years while the state’s utilities occupied themselves by
building one fossil fuel generating station after another.



Sources for statistical information: Electric Division, Public Service
Commission of Wisconsin; Wisconsin Energy Statistics – 2001 (Wisconsin
Division of Energy, Department of Administration).

Michael Vickerman
RENEW Wisconsin
222 S. Hamilton St.
Madison, WI 53703
Phone: (608) 255-4044
E-mail: mvickerman@renewwisconsin.org

To learn how renewable energy is powering Wisconsin, visit RENEW Wisconsin's
web site at http://www.renewwisconsin.org.


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