Rising electricity cost has jolted state

From an article by Tom Content in the Milwaukee Journal Sentinel:

The price of electricity has shot up faster in Wisconsin than in all but five other states since 2000, which could pose a threat to the state's economic competitiveness, a new analysis by the Wisconsin Taxpayers Alliance says.

Wisconsin businesses and homeowners are paying more than most surrounding states, as the state continues to pay for power plant upgrades that followed near-brownouts in the late 1990s.

That, coupled with rising natural gas and coal prices, has pushed rates up. The state's electricity prices, which ranked 11th-lowest in the nation in 1990, now rank 20th-highest, the report found.

"We need to recognize that energy prices really do have an effect on the competitiveness of the state," said Kyle Christianson, policy research analyst at the nonpartisan Taxpayers Alliance. "We're talking about trying to attract employers and adding new jobs, and particularly in a manufacturing-intensive economy like Wisconsin, energy prices are a major cost of doing business."

Utilities regulators defend Wisconsin's power plant building boom as important to keeping the state's economy competitive over the long run.

"A manufacturing state simply cannot survive without a reliable electric infrastructure," said Bob Norcross, administrator at the state Public Service Commission. "Wisconsin responded to its reliability crisis by making necessary investments that were in large part supported by the state's business community, and they were sound. The rebuilding period that accompanied those infrastructure investments is now reaching an end, but we need to pay for them - and that's why we have rate pressure. . . ."

Charlie Higley, executive director of the Wisconsin Citizens' Utility Board, is concerned that rate increases will continue for residential customers.

"Our households are paying a high price for electricity, and it's hurting their ability to make ends meet," Higley said.

Wisconsin now has a power glut that prompted the state Public Service Commission to launch an investigation into whether some of the state's older power plants should be mothballed or shut down.

Shutting down coal would help the state's customers from having to cover the rising coal prices, Higley said.

"Since we get most of our power from coal that means we're very susceptible to paying higher rates because of higher coal prices," Higley said. "It underlies our calls for moving toward cleaner energy solutions like renewable energy and energy efficiency, which don't have fuel costs."

But Klappa said the record power use this summer - in the midst of an economy that's slow to emerge from the Great Recession - underscores that Wisconsin doesn't have a power glut.

"We never had a 95-degree day this summer and we set two energy consumption records for customers, July for residential customers and August for small commercial and industrial customers," he said. "There's not a lot of excess."

PSC backs bigger investment in energy efficiency

From a blog post by Tom Content on JSonline:

Wisconsin’s energy efficiency programs would receive increased funding from electricity ratepayers in the next four years under a proposal adopted Thursday by the state Public Service Commission.

The state's Focus on Energy program has been reallocating its budget to meet the heavy demand for energy-efficiency services from the business community, according to the PSC.

The commission’s action must be endorsed by the Legislature’s Joint Finance Committee.

A study by the Energy Center of Wisconsin, released last year, concluded Wisconsin could triple funding for energy efficiency and achieve $1 billion in savings on energy bills for customers.

Citing the economy, the commission voted to increase funding for efficiency initiatives, but didn’t increase spending as much as advocates had sought.

PSC Chairman Eric Callisto urged the agency to adopt a more gradual ramp-up in funding for energy efficiency given the state of the economy.

“Rates will go up over time if we don’t invest in energy efficiency,” he said. “I’m also cognizant of the economic woes the state is now facing.”

The PSC decision would set a target of reducing the state’s electricity demand by 1.5% beginning in 2014.

Under the proposal, funding for energy-efficiency programs would expand to $120 million in 2011 from $100 million this year, with the goal of expanding incentives aimed at reducing energy bills.

Funding would then increase to $160 million in 2012, $204 million in 2013, and $256 million in 2014, under the PSC proposal.

For the next four years, the minimum funding level for renewables will be $10.8 million in 2011, $14.4 million in 2012, $18.36 million in 2013 and $23.04 million in 2014.

Wind energy producers face wall in moving power east

From an article by Dan Piller in the Des Moines Register:

Iowa energy policymakers know that building the nation's second-largest wind generating capacity was relatively easy compared with the next step of figuring how to transport surplus electricity to Eastern cities.

One thing appears certain: If plans don't gel relatively soon on ways to move wind energy across state lines, the slowdown in building wind farms in Iowa will turn into a complete halt.

"Absolutely, Iowa will see wind energy development stopped if transmission issues aren't solved," said Roya Stanley, director of the Iowa Power Fund. She's Gov. Chet Culver's representative on multistate task forces trying to untangle the wires, literally, to build an interstate electric system.

Robert Loyd, manager of the Clipper Windpower plant in Cedar Rapids, said: "Everybody's waiting for something to happen. If we don't get the transmission issue solved fairly soon, we'll hit a wall on new wind power development."

Loyd laid off workers last year. So did TPI Composites in Newton, a company heralded as part of that city's attempts to come back from the Maytag closing five years ago.

Wind already faces a stiff challenge from natural gas, which burns cleaner than coal and now is believed to be in much larger supply in the nation than previously believed five years ago thanks to huge discoveries.

Gas has a built-in advantage — a national network of pipelines. Wind-generated electricity doesn't have a multistate transport system, and such a network will be needed if Iowa and the Upper Midwest expect to succeed.