WisBusiness: Energy efficiency funds used improperly, state panel told

By Joanne M. Haas

MADISON — The government’s use of consumer utility fees originally targeted for energy efficiency efforts for other state budget needs is improper taxation against ratepayers and detrimental to conservation and renewable power initiatives, an energy advocate charged Tuesday.

“This budget theft is decidedly unconstitutional,” Tom Wilson of Northern Thunder, a Western Wisconsin group devoted to alternative energy efforts, told the 25-member Governor’s Task Force on Energy Efficiency and Renewables during Tuesday’s all-day public hearing.

Wilson was not alone in his criticism of Democrat Gov. Jim Doyle and the Republican-controlled Legislature for diverting about $47 million from the public benefits energy efficiency funds to the general fund for other uses in the 2003-05 budget. But of the more than 20 who testified in Madison, Wilson’s testimony was among the most strongly worded.

“When the Legislature with the governor’s approval voted to absorb over one third of these public benefit funds into the general revenue budget, (that) is the equivalent of imposing a tax on just those ratepayers of investor-owned utilities — not on the member of the numerous co-ops or municipal lines who chose not to participate in the Focus program,” Wilson said, adding he hoped stakeholders statewide would consider the merits of joining in a class action suit against the Legislature to make sure the public benefits fund is restored.

“Rather than providing all these public benefits to the ratepayers of Wisconsin, these dedicated funds are now diverted and paying for prisons and interest payments on bonds for unnecessary road construction and other politically favored projects,” he said.

The 25-member task force, appointed by Doyle in September 2003, is working on a pile of recommendations to promote the use of renewables, conservation and other energy efficiency measures in the state.

A representative from the American Council for an Energy Efficient Economy, a national nonprofit group devoted to energy issues, echoed Wilson’s concerns about the unreliable funding of the public benefits and Focus on Energy programs.

“No more roller coaster up and down,” said Dan York, a senior research associate with the group. “Energy efficiency is a resource that requires consistent, reliable programs to work with customers. Widely fluctuating levels of support for energy efficiency can greatly damage program effectiveness.”

York told the blue ribbon panel that Wisconsin was among the nation’s first states “to require its utilities to take an integrated approach to resource planning. Through a wide menu of utility programs, ratepayer dollars went not just to newer and bigger power plants, but also to better light bulbs, heating systems and industrial processes.”

As other speakers mentioned, York said Wisconsin was among the states which “drastically cut” its energy efficiency programs to address the state’s budget crisis — which hit a $3.2 billion deficit in the last biennium. “There was a mild epidemic of that,” he said of other states taking similar action.

Recalling the power crisis that hit the West three years ago, York said, “Energy efficiency in California literally kept the lights on in 2001 when they had rolling blackouts.”

John Exner, president and legal counsel for the Midwest Food Processors Association, representing 19 food processors and 190 associates in Wisconsin, Minnesota and Illinois, told members that “utilizing public benefit money the way it was originally set up is crucial for energy users in Wisconsin.

“Our industry has been the victim of these user fee diversions in the past and it is disappointing to see them continue into the future,” Exner said. “With each new diversion of money, the creation of new ideas is stifled as fee payers become less inclined to believe that the money will be utilized as designed.”

Targeting the needs of the rural energy users and providers was Kenneth Ragland, emeritus professor of mechanical engineering at the UW-Madison, who urged the task force to support a 160-acre tree demonstration farm for fast-growing hybrid poplar and cottonwoods. Ragland said such farms could be one way to stop the steady decline of farmland statewide and help the state’s farmers develop a new crop to help rural energy needs.

Ragland said Wisconsin is losing farmland at the rate of 130,000 acres per year, for a total of 1.3 million acres during the last decade. Some urban sprawl is to blame, he said, but mostly it is due to farmers selling bits of their land to non-farms to supplement strained incomes.

“This loss of farmland represents the lost opportunity for two 100 megawatts of bioenergy power plans per year operating at a 60 percent capacity factor,” Ragland said. “The 1.3 million acres lost in the last 10 years represents the potential for about 12 percent of the electrical power generating capacity in Wisconsin.”

Ragland urged the panel to consider using farmlands to grow energy crops for renewable electrical power, process heat and transportation fuels. Fast-growing trees and switchgrass offer the most important renewable source of power and fuel, he said.

“Growing trees on former cropland has several environmental benefits including carbon sequestration, creation of wildlife habitat, soil quality improvement and reduced chemical input relative to annual crops,” said Ragland, now vice president of Energy Performance Systems said. “Wood crops can be used as a fuel for various types of boilers for utility power plants.”

Hardware and appliance store owners also testified in support of the Focus on Energy program, describing strong sales in energy-efficient appliances such as washing machines. Dennis Lochner of Meadowood Ace Hardware in Madison said he has sold 35,000 compact fluorescent bulbs in the last year. The bulbs, which use micro-electronics and are known for high efficiency, continue to be strong sellers as word spreads about declining utility bills when the bulbs are in use. An owner of another appliance store in Madison testified he has had to hire more sales and delivery staff to keep up with the sales of energy efficient appliances.

The panel spent the day leading a public hearing while based in 411 Capitol South, but taking testimony through video-conferencing at sites in Eau Claire, Milwaukee and Green Bay.

Lee Cullen, chair of the task force created in September 2003, said the 25-member panel is working on recommendations in largely three areas — energy programs, such as funding levels and security, and renewable sources usage, and building codes. The panel is expected to meet in late July to make final decisions. A report will be completed and released sometime September.

Earlier this month, Doyle put the state’s utilities on notice by announcing his goal the state government make sure 10 percent of the total power it buys by the year 2006 is from renewable sources — and 20 percent by the year 2010. The governor issued a similar challenge to utilities to make sure 10 percent of the power they provide to homes, businesses and other private customers is from renewable sources by the year 2015.