The Legislature is making some minor changes to the state’s renewable portfolio standards, which require that by 2015 regulated utilities provide 10 percent of their energy from green sources like wind, solar, hydro-electric, manure, and biomass.
But what the Wisconsin really needs is a major overhaul of utility regulations that would encourage utility investment in alternative energy and new technology, according to Gary Radloff, Midwest energy policy analysis director at the UW-Madison Wisconsin Energy Institute.
“We could be doing much, much more,” said Radloff, who adds Wisconsin lags behind some other Midwest states in use of renewables. Minnesota law, for example, requires state utilities to produce at least 17 percent of their energy from green sources by 2016. And Iowa, which has pursued an aggressive wind energy generation policy, now gets almost 25 percent of its power from the towering wind turbines that dot the landscape, according to Rob Hillesland, a spokesman for the Iowa Utilities Board.
Overall, Radloff said Wisconsin is roughly in the middle nationally with its renewable standards. But on the West Coast, California currently mandates that utilities produce a third of their power from green sources. He said there are proposals in California to raise that figure to 50 percent in the future.
Last week the Assembly Energy and Utilities Committee passed three bills expanding power sources that qualify for the Wisconsin’s renewable portfolio standard. Assembly Bill 596 would require that renewable energy credits be counted toward the standard regardless of when the source used to generate the qualifying power began operation.
The panel also backed AB 594, which would modify renewable portfolio standard requirements affecting four small utilities in central and northern Wisconsin, and AB 595, which makes a series of technical changes to laws governing the Public Service Commission.
Radloff said Wednesday’s vote – which was unanimous – was “just chipping around the edges (with some) fairly small changes to the state’s renewable portfolio standard.”
He said the legislation gives some “exemptions and additional flexibility in meeting the law, but didn’t radically restructure it.”
He said there had been reports some legislators might try to gut the renewable standards law. Though attempts have been made to do that in other states, he said he doubts it will happen here.
Radloff said the conservative group American Legislative Exchange Council had targeted renewable portfolio standards around the country in recent years.
“They failed in every state,” Radloff said. “So I’m not sure there is an appetite to radically restructure renewable standard laws.”
Radloff cited several reasons for the lack of success to revoke the renewable standard laws.
“Number one is that the public supports renewable energy,” he said. “Second also is that once you ask the utilities to make an investment in renewable energy … they don’t want to have to move in one direction and then another and then have to jump back again.
“So I think there are a number of logical reasons to not roll back those laws. I think you could make a pretty strong case why we need to expand those laws.”
Radloff said the feds and the states need to do much more to encourage technological innovation in energy production and service delivery by utilities. Currently, he said, regulation holds that innovation back.
“Right now, the way the business is set up is that it doesn’t allow for innovation,” he said. “Utility companies only invest about 2 percent of their money into energy technology innovation and that’s way, way below many other sectors of the economy.
“If we are really going to be a modern economy in the U.S. and compete globally and if Wisconsin is going to compete globally, we need technology innovation. We need new products and services and new ways to deliver energy.
“That’s just not occurring right now because we have rules that are more than 100 years old that govern our regulated utilities. It’s time to throw that book out and rewrite it.”
He said he would like to see Wisconsin allow third-party financing of energy production.
“Right now it’s pretty restricted,” he said. “Third-party companies are reluctant to get into the marketplace because of the way the laws are written. If you generate a certain amount of energy, you become a utility and are regulated by all the laws that govern utilities.”
He also said some utilities oppose third parties entering the market because it means would reduce their revenue.
“But what you are seeing now around the country where the laws are different or you have a deregulated state is that third parties are really leading the charge, particularly in the solar sector,” he said, pointing to California’s “solar energy revolution” as a success story.
“I often kind of joke that it might be time for Google Energy,” he said. “Technology companies are interested in the energy sector in terms of demand response and managing energy. We really need to look at restructuring the whole industry to allow for much more innovation and new ideas and new generators.”
Radloff said Wisconsin needs to diversify how it produces energy beyond the 10 percent mandate in the law.
“I think it would benefit the state to diversify our portfolio further and have more clean energy technology generation solutions,” he said. “It’s kind of a hedge on your investments. It’s not unlike when you have a personal investment portfolio for your retirement or your life savings. “
Currently, he noted, Wisconsin gets more than 50 percent of its energy from coal and other carbon sources. He said wind and solar would be a good bet as a hedge against fluctuations in the prices of fossil fuels.
“Wind and solar have no energy generation costs after they are built because the sun just has to shine and the wind just has to blow,” he said, arguing that the cost of solar panels has dropped drastically in recent years
Former Gov. Jim Doyle promoted a plan for the state to get 25 percent of its energy from renewables by 2020, but that proposal never became law, he said. Radloff said the Walker administration has been tepid at best in backing renewables, citing a move to remove the biomass option from a UW-Madison power plant and a “lukewarm” attitude toward wind farms.
“But since that time, they’ve indicated some interest in opportunities in biogas and anaerobic digesters using materials such as animal manure from dairy farms and food waste to produce biogas, which is a clean energy technology generation.
“So I think it is a mixed bag at this point. We really need to have a much more robust discussion in Wisconsin around our energy future.”
— By Brian E. Clark
For WisBusiness.com
