CLEAN ENERGY

WI State Journal: Opponents continue attack as major Wisconsin utility merger moves forward

Opponents continue to fight plans by Wisconsin Energy Corp., Milwaukee, to buy Integrys Energy Group, Chicago, even though the Federal Energy Regulatory Commission approved the $9.1 billion deal this week.

The Wisconsin Citizens Utility Board called it “a bad idea,” in comments submitted Monday.

“WEC has shown how the proposed transaction will provide hundreds of millions of dollars in benefits for shareholders, lawyers, bankers, and customers in other states while providing nothing for Wisconsin customers but increased risks,” CUB wrote.

If approved, the huge utility will serve more than 4.3 million customers.

Wisconsin Energy subsidiary, We Energies, provides electricity to residents as far west as the Deerfield and Marshall areas in Dane County. Integrys includes Green Bay utility company Wisconsin Public Service.

The Environmental Law and Policy Center of Chicago said the merged company — to be called WEC Energy Group — will have too much control over American Transmission Corp., which owns and operates high-voltage transmission lines in Wisconsin and Michigan’s Upper Peninsula.

The center said WEC should have no more than 34 percent ownership or voting rights in ATC.

Wisconsin Energy spokesman Brian Manthey said FERC’s decision “represents one more positive and important step in the process of finalizing our acquisition.”

Regulators in Wisconsin, Illinois, Minnesota and Michigan are expected to act on the proposal by early July. Wisconsin’s Public Service Commission could cast its vote later this month, Manthey said.

Midwest Energy News: Can better utility planning replace clean-energy standards?

A key component of energy proposals emerging from the Michigan legislature is that more robust long-term planning requirements for utilities can effectively replace renewable energy and efficiency standards.

Known as Integrated Resource Plans, Republicans in the House and Senate say requiring utilities to file these every three to five years will produce the most cost-effective resource mix into the future, eliminating the need for meeting goals under a renewable portfolio or energy efficiency mandate.

Formal IRPs are required in 28 states and come in various forms. Typically they are filed every two to five years and forecasts of supply, demand and other market factors can stretch upwards of 20 years.

While experts who follow clean-energy policies say such planning can be helpful in outlining long-term needs for utilities, some argue that — if the goal is expanding renewables or energy efficiency — IRPs are unable to produce the same results as clearly defined standards. Moreover, they are liable to become esoteric exercises in utility planning.

“It’s pretty apparent to those of us keeping a close eye on these types of things that an IRP process is not a substitute for renewable energy and energy efficiency standards,” said Sam Gomberg, Midwest energy analyst for the Union of Concerned Scientists.

“Standards really provide a tremendous amount of certainty of both utilities and the state to ensure these resources are brought online to a significant degree. The evidence is so clear that not only is it cost effective, but they also bring a lot of benefits to the ratepayer. An IRP can be a great complement to those standards.”

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AP: Nation’s Biggest Nuclear Firm Makes a Play for Green Money

The biggest player in the beleaguered nuclear power industry wants a place alongside solar, wind and hydroelectric power collecting extra money for producing carbon-free electricity.

Exelon Corp., operator of the largest fleet of U.S. nuclear plants, says it could have to close three of them if Illinois rejects the company’s pitch to let it recoup more from consumers since the plants do not produce greenhouse gases.

Chicago-based Exelon essentially wants to change the rules of the state’s power market as the nuclear industry competes with historically low prices for natural gas. Dominion Resources Inc. recently closed the Kewaunee Power Station in Wisconsin for financial reasons, and Entergy Corp. likewise shuttered its Vermont Yankee plant.

Plans for a new wave of U.S. nuclear plants have been delayed or cancelled, aside from three projects deep into construction at Plant Vogtle south of Augusta, Georgia; V.C. Summer Nuclear Station north of Columbia, South Carolina; and Watts Bar Nuclear Plant in eastern Tennessee. Electric utilities in those states do not face competition.

Nuclear plants provide about 97 percent of the electricity supply in Exelon’s Midwest market, according to company filings.

“We’re not looking for a bailout from market conditions,” said Joseph Dominguez, executive vice president for governmental and regulatory affairs at Exelon. “We are looking for policy support that every other technology receives in Illinois that produces zero-carbon electricity with the exception of nuclear.”

Though it wants financial assistance, Exelon will not release detailed information about the cost of running the three Illinois plants in Quad Cities, Byron and Clinton that company officials say are most at-risk. An analysis by state agencies estimated the cost of producing power at those plants may exceed the payments they get, though they could not be certain.

Exelon and other around-the-clock plants sometimes take losses when wind turbines produce too much electricity for the system.

Exelon remained profitable overall, making $1.6 billion last year.

“If the question is, ‘Are they under economic threat?’ I don’t think there’s any question they are,” said Paul Patterson, a utility analyst for Glenrock Associates LLC, who referred to nuclear plant closures elsewhere as evidence. “Will they shut down? I think it depends at what plant you’re looking at.”

The Illinois proposal would reward nuclear plants. Under the system, electric suppliers would have to buy credits from carbon-free energy producers. Exelon says the plan would benefit nuclear plants, hydroelectric dams, and other solar and wind projects.

Critics are concerned the rules are so narrowly drawn that the primary winner would be Exelon’s own nuclear fleet. For example, there are limits on the size of participating hydroelectric dams. Clean energy sources built in regulated markets don’t count. Neither do any renewable energy sources that have long-term contracts to sell their power to other buyers.

Detroit News: Michigan case pits health against power reliability

Washington — A case involving Michigan before the U.S. Supreme Court Wednesday could have multibillion-dollar consequences for the power-generating industry, stoking concerns about electricity reliability in the state and the region.

The Michigan Attorney General’s Office is representing 21 Republican-controlled states when the High Court hears arguments Wednesday in Michigan v. EPA concerning federal rules on pollution at power plants. They say coal- and oil-fired plants’ compliance with federal restrictions on emissions of mercury, arsenic and other toxic pollutants is too costly for utilities and, ultimately, ratepayers.

The U.S. Environmental Protection Agency’s regulations, which take effect next month, factored into the planned retirement of dozens of coal-fired generators nationwide this year and next. Some operators chose to close their dirtiest facilities rather than invest in pollution-control equipment to meet the stricter standards.

“This rule drives the amount of flexibility that the utilities would have had to retire them later,” said Peter Manning, chief of the Environmental, Natural Resources and Agriculture Division of the Michigan Attorney General’s Office.

Coal produced half of Michigan’s electricity in 2014, causing the regional grid operator and others to raise concerns over the state’s shrinking electric reserves.

The 21 states have sided with trade groups for utilities and coal suppliers. They want the justices to overturn a ruling by the U.S. Court of Appeals for the D.C. Circuit, which last year said the EPA properly looked at health risks — not compliance costs — in deciding that mercury and other hazardous pollutants should be regulated more strictly.

In its brief to the court, the EPA says it has authority under the Clean Air Act to regulate power plants when their emissions pose a threat to public health or the environment, and when controls exist to reduce emissions.

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Chicago Tribune: ComEd’s plan to boost smart grid would hit customers’ wallets, critics say

Commonwealth Edison on Thursday unveiled a plan that it billed as an expansion of ongoing efforts to overhaul the power grid and invest in renewable energy but that critics said would result in customers paying more to the electricity giant.

The proposal joins at least two other high-profile energy bills lawmakers are weighing this spring. One focuses on increasing use of wind, water and solar power, while another backed by ComEd parent company Exelon would charge customers more to prop up what the corporation says are three struggling nuclear plants.

According to ComEd, the latest measure is an attempt to build on the so-called “smart grid” legislators approved in 2011 to pump billions of dollars into an overhaul of the state’s aging electricity system. A key provision would change how residential customers are charged for service. Instead of billing them for how much electricity they use, ComEd would charge customers based on a time frame when usage was highest.

ComEd was vague about the expected impact on residential customers’ power bills. ComEd Senior Vice President Thomas O’Neill said the company was still evaluating its plan.

Opponents decried the move as an effort by the utility to set into law a major change in rate structures. They argue ComEd is trying to protect its bottom line by billing at peak usage times because households are increasingly becoming more energy-efficient.

Now, consumers can cut their energy bills by switching to more efficient light bulbs or buying more efficient appliances. Those investments pay off over time when consumers use less energy and bills decrease.

With a “demand-based” rate structure, as ComEd calls it, a smaller portion of the consumer’s bill would be affected by daily energy usage, creating less incentive for investments in energy efficiency, critics said.

“They’re putting this forward because they perceive a risk on their part of not recovering their revenues because people are investing more in energy efficiency,” said Rebecca Stanfield, deputy director of Midwest policy for the National Resources Defense Council, which backs the competing clean energy legislation.

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Crain’s Chicago Business: ComEd adds heat to already-boiling Illinois energy politics

As energy politics heat up in Illinois, Commonwealth Edison is throwing some more logs on the fire.

The utility is backing legislation being introduced today in Springfield that effectively is a response to the clean-jobs bill backed by Chicago Mayor Rahm Emanuel and a coalition of environmental, consumer and labor groups, along with renewable power developers and energy-efficiency firms.

ComEd’s 11th-hour bill, coming as the spring session is well underway, also could be intended to build more support for a bill pushed by ComEd parent Exelon to raise electricity rates throughout much of the state in order to increase revenue at Exelon’s six Illinois nuclear plants.

Environmentalists and others have positioned the clean-jobs bill, which would boost state goals for renewable energy and more efficient use of electricity and create what its proponents say would be tens of thousands of new jobs, as an alternative to Exelon’s bill. Somewhat surprisingly, given that Exelon is one of Illinois’ most politically potent corporations, the clean-jobs coalition has won more support thus far in terms of co-sponsors than Exelon. Exelon’s bill would funnel most of the $300 million in additional ratepayer payments to Exelon’s plants, preserving the jobs that already exist there.

Exelon has threatened to shutter as many as three of its six Illinois power stations if it can’t get state financial help.

ComEd’s bill, to be introduced by Sen. Kimberly Lightford, D-Maywood, and Rep. Bob Rita, D-Blue Island, is designed to foster growth in clean energy like solar power for households and micro-grids providing greater reliability and resiliency to sensitive facilities like the Federal Aviation Administration’s air-traffic control center in Aurora.

ComEd also proposes a $100 million program to build 5,000 Chicago-area charging stations to increase demand for electric vehicles.

BOTTOM-LINE BOOST

The bill would increase ComEd’s bottom line in the future as decreased customer demand for power hits its revenue by permitting the utility to profit on its state-authorized energy efficiency program. Currently, ComEd only charges ratepayers to reimburse it for its costs in running the program.

But the trade-off, ComEd says, is that it would achieve the 2 percent reduction in power usage called for in an earlier state law by more efficiently controlling voltage on ComEd’s power lines, so that less excess electricity is lost before reaching customers’ homes and businesses.

In addition, the bill would overhaul how ComEd’s power-delivery rates are set. Currently, customers pay delivery rates mainly based on how much power they consume in a month. Beginning in 2018, they would pay based on how much electricity they consume during the highest-demand days of the year. Some customers would benefit and some would pay more under the new system. ComEd hasn’t yet determined how it would affect individual types of households.

But it would help ComEd by making its cash flow more predictable, executives said.

It also might help customers take better advantage of the smart meters ComEd is installing in their homes. Those meters, which give the utility remote access to customers’ actual usage on a real-time basis, have the potential to foster new efficiency programs in ways where households can see savings from changes in usage.

The bill, ComEd CEO Anne Pramaggiore told reporters, “is designed to deliver the next wave of value from that (smart grid) system.”

And all of this comes at no additional cost on a net basis to customers over the 10 years the new program would be in place, ComEd said. The utility says it would see a negligible $20 million in additional revenue over that 10-year period if the bill becomes law.

CRITICS WEIGH IN

One environmental group immediately blasted ComEd’s proposal as a pale imitation of the clean-jobs bill.

“Unfortunately, Exelon’s and ComEd’s legislative proposals would raise utility bills for most consumers, create barriers to competition and constrain energy efficiency and diverse solar energy development for the future,” said Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center, in a statement. “ComEd’s legislative proposal forecloses flexibility that Illinois needs to transition to a cleaner energy future and locks out competitors.”

Other members of the clean-jobs coalition were more open to some of ComEd’s ideas.

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Utility Drive Op-Ed: A view from Wisconsin on fixed charges and utility-solar troubles

The following is an opinion piece written by Tyler Huebner and Brad Klein. Huebner is the executive director of RENEW Wisconsin, a renewable advocacy organization in the state. Klein is a senior attorney at the Environmental Law & Policy Center, an environmental advocacy organization in the Midwest.

Last fall, we participated first-hand in three Wisconsin utility proposals relating to fixed charges and distributed generation.

More recently, we have followed the recent op-eds in Utility Dive from Dr. H. Edwin Overcast and Dr. Ashley C. Brown on fixed charges and net metering. One thing stood out to us in their editorials: Lots of words, but almost no actual data!

To remedy this — as our organizations did in last year’s rate cases for these Wisconsin utilities — we will provide some numbers.

Digging into the data

In Wisconsin, all three utilities argued that customers with solar panels are not paying their fair share of the utilities’ fixed costs, and therefore every single customer should see their monthly connection fee go up from $9-$10 per month to $16-$25 per month.

Raising the monthly connection fee hurts low-using energy customers, who, asthe National Consumer Law Center found, are often low-income, minorities, fixed-income, apartment dwellers, and senior citizens.

Let’s put Wisconsin’s level of solar adoption in perspective compared with the dramatic fixed charge increases requested.

Wisconsin Public Service

Wisconsin Public Service (WPS), based in Green Bay, serves approximately 445,000 electric customers. Of these, only 340 have installed distributed generation in the past 10 years — 0.08% of their customer base.

Further, even WPS conceded that the majority of those customers — 65%, or 221 homeowners — were fully paying their fixed costs under the utility’s way of counting. That is because, although they have solar, these 221 customers’ photovoltaic systems don’t provide all their electricity usage.

The total unrecovered revenue requirement — what the utility thinks it should earn but doesn’t because solar customers invest in solar on their roofs — amounts to only $21,000 for the entire year. That is approximately 0.002% of the company’s total 2013 monopoly revenue.

This is how WPS solves its “problem” — it seeks to shift $6.5 million from variable rates into unavoidable monthly fees for each customer, in order to offset a theoretical shortfall of only $21,000 caused by 119 customers who installed solar equipment largely at their own expense.

We Energies

Next up: We Energies, based in Milwaukee, which serves approximately 1.1 million electric customers. It requested an increase in monthly connection fees from $9.13 to $16, which will shift more than $7 million a year from usage-based rates to guaranteed fixed monthly fees. We Energies also proposed to apply additional charges on residential and small business customers with their own distributed generation systems, which would amount to about $20 per month for a 5 kW solar PV system — $3.80 per kW per month, to be specific.

About 450 We Energies customers have distributed generation and use net metering, or just 0.04% of their customers. The increased fixed charges and solar charges on those 450 customers will amount to about $117,000, or about 0.004% of the utility’s revenues.

Madison Gas & Electric

Finally, Madison Gas & Electric used similar arguments to request monthly fixed fees rise from about $10 to $19 (after backing off plans to raise them significantly higher in future years). Just 0.14% of their customers use net metering.

‘Swatting a fly with a nuclear weapon’

Collectively, only 6 out of every 10,000 customers for these utilities have distributed generation. “Swatting a fly with a nuclear weapon” is the type of analogy that should be used when considering these Wisconsin proposals, and the result is a “cure” that’s much worse than the disease.

Especially when the disease hasn’t even been proven to exist. The only analysis in the record concerning Wisconsin-based costs and benefits of distributed generation was gathered through a data request: a 2009 study commissioned by We Energies and conducted by Clean Power Research, which concluded that solar PV is worth about 15 cents per kWh at a levelized value for 30 years (see page ES-3). Since We Energies’ electric rates were about 13.9 cents per kWh in 2014, it turns out that solar customers may very well be subsidizing all other We Energies ratepayers.

Unfortunately, none of the utilities offered any new analysis of the benefits of distributed generation in these proceedings. Nearly every intervening organization suggested that the Wisconsin Commission conduct real studies looking at the costs and benefits of net metering and distributed generation as has been done in Vermont (see section 3.3.3), Nevada, Mississippi, Minnesota, and other states. The Utah Commission told Rocky Mountain Power to beef up their analysis, too (see page 66). But in Wisconsin, that suggestion was denied.

Wisconsin’s Public Service Commission has been approving the utilities’ distributed generation restrictions for years despite the repeated lack of evidence. RENEW Wisconsin, the local renewable energy advocacy organization, has been forced to take these unsupported decisions to court. Luckily, it has prevailed on three of the four counts brought the past two years, with the judge remanding decisions back to the Commission for further fact-finding. Along with The Alliance for Solar Choice (TASC), RENEW hasappealed the 2014 We Energies solar charge decision as well.

Does net metering really hurt the poor?

In an op-ed in Utility Dive, Dr. Brown states that one of his primary concerns with net metering is that it may hurt the poor.

In his testimony here in Wisconsin, he provided absolutely no state-specific data to support his theory that solar owners, who make up just 4 of every 10,000 We Energies customers, are causing undue hardship on the poor. Further, he offered no alternative to the higher fixed customer charges which unquestionably do hurt many of We Energies’ low-income ratepayers.

The result of the Wisconsin rate cases is that a typical apartment-dwelling customer served by these utilities will pay $60-$75 more each year for electricity. Even granting the utilities’ extreme position that excess solar is worth nothing more than the cheapest electron you can buy on the market — contradicted by We Energies’ own 2009 study mentioned above — those same customers paid no more than a dime a year extra due to current solar customers.

As the recent Washington Post article exposed, this solar battle is not really about customer fairness, it is about protecting utilities from competition, plain and simple. (Note that Dr. Brown’s Harvard Electricity Policy Group issupported heavily by the electric utility industry.)

Solar customers and the future of the utility industry

There is no doubt that the electricity industry is entering a new phase in Wisconsin and other states due to declining sales and the ever-increasing affordability of solar panels for customers. Thus far however, the small number of solar customers here in Wisconsin does not require wholesale changes to how we set rates. We have plenty of time to get these policies right and many, if not almost all, other states are in the same boat.

Our advice from the trenches in Wisconsin to utilities and Commissions in other states: Follow the lead of Vermont, Nevada, Mississippi, Minnesota, Maine, Utah, and other states on this issue — not Wisconsin’s 2014 decisions. Do the studies. Get the data. Hash out the details.

The best way to address this industry transition is with solid analysis of the utility’s actual situation, open discussion, and a long-run, forward-looking view. Not by ramming through “back to the past” electric rate policies against broad objections from citizens and that undisputedly harm low-use and fixed-income customers who can least afford the higher bills they now have to pay.

Statement: Latest Proposal Undercuts Competitive Markets, Leaves State’s Renewable Energy Portfolio Standard Broken

Illinois Clean Jobs Bill Remains Sole Option to Drive Wind Power and Solar Energy, Stimulate Needed Job Growth

 

STATEMENT BY HOWARD A. LEARNER
Executive Director, Environmental Law & Policy Center

“Illinois consumers are poised to gain the job creation, environmental quality and economic benefits of competing new clean energy technologies and suppliers.

“Unfortunately, Exelon’s and ComEd’s legislative proposals would raise utility bills for most consumers, create barriers to competition, and constrain energy efficiency and diverse solar energy development for the future. ComEd’s legislative proposal forecloses flexibility that Illinois needs to transition to a cleaner energy future and locks out competitors.”

“The Illinois Clean Jobs Bill brings Illinois into a more positive energy future.  Illinois policymakers should move forward promoting new innovative technologies, instead of Exelon’s and ComEd’s old monopoly approach that raises consumer’s electricity bills and imposes regulatory barriers that create more problems than positive solutions.”

Public News Service: Wind, Solar Companies Finding Success in Illinois

SPRINGFIELD, Ill. – Clean energy companies are finding a home in Illinois. A new report from the Environmental Law and Policy Center says more than 20,000 Illinoisans work in wind power and solar energy markets. Center Executive Director Howard Learner predicts continued investments in renewable energy development will mean even more new business and increased economic activity.

“When we get the policies right with these clean, new technologies that are developing well, that’s good for jobs,” says Learner. “It’s good for economic growth, it’s good for our environment.”

Learner says jobs in the renewable energy sector include manufacturing, operations, installation, and professional service. The report says 237 Illinois companies are part of the solar industry supply chain and 170 are involved in the wind industry supply chain.

The report identifies 13 major wind companies with corporate headquarters in the Chicago region, which generate additional jobs in finance, insurance, real estate and law. Elise Houren, manager of government affairs with the Chicagoland Chamber of Commerce, says a thriving renewable energy sector is good for the community and for attracting new business to the area.

“The business community is very engaged in sustainability and environmental-friendly activity and efforts,” says Houren. “The new technology and advances that have already been made and will continue to be made are good for Chicagoland and the region, and continue to present economic opportunity.”

Learner says policies like the federal Production Tax Credit for wind and the Investment Tax Credit for solar are helping to drive business development. But he notes the state’s renewable energy standard has stalled, because it was written to require a percentage of utility supply to come from renewable sources.

“With the movement toward municipal aggregation, the utilities’ supply of the market has actually gone down,” says Learner . “Now the state has committed $30 million of funds for a new solar procurement, that’s a good step in the right direction. But we need to get the state renewable energy standard fixed, so it works better.”

According to the report, between 2011 and 2015, the solar business grew 153 percent in the state and Illinois ranks fifth nationally for wind power production.

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ELPC’s Founding Vision is Becoming Today’s Sustainability Reality

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ELPC’s Founding Vision is Becoming Today’s Sustainability Reality

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ELPC’s Founding Vision is Becoming Today’s Sustainability Reality

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