LRB-3616/2
MDK:wlj&lmk&cjs:pg
2005 - 2006 LEGISLATURE
November 29, 2005 - Introduced by
Committee on Energy, Utilities and
Information Technology. Referred to Committee on Energy, Utilities and
Information Technology.
SB459,2,19
1An Act to repeal 16.957 (2) (b) 2., 16.957 (2) (c) 2n., 16.957 (2) (d) 3., 16.957 (2)
2(d) 4. b. and c., 16.957 (3) (title), 16.957 (4) (b), 16.957 (4) (c) (title), 16.957 (4)
3(c) (intro.), 16.957 (4) (c) 2., 16.957 (4) (c) 3., 16.958, 20.505 (3) (rr), 20.505 (3)
4(s), 25.17 (1) (ai), 25.97, 101.027 (1) (b), 196.374 (1) (b), 196.374 (4), 196.378 (1)
5(bm), 196.378 (1) (e), 196.378 (2) (b) 3., 196.86, 285.48 (3) (d) 3. and 285.48 (3)
6(d) 4.;
to renumber 16.957 (4) (c) 1. a. and b. and 196.374 (1) (a);
to renumber
7and amend 16.957 (2) (b) 1., 16.957 (3) (a), 16.957 (4) (am), 16.957 (4) (c) 1.
8(intro.), 196.374 (1) (c), 196.378 (1) (n) and 196.378 (3) (a);
to consolidate,
9renumber and amend 16.957 (2) (d) 4. (intro.), a. and d., 16.957 (3) (b) and (c)
10and 101.027 (1) (intro.) and (a);
to amend 16.957 (1) (c), 16.957 (1) (h), 16.957
11(1) (L), 16.957 (1) (o) 1m., 16.957 (1) (o) 3., 16.957 (2) (intro.), 16.957 (2) (a)
12(intro.), 16.957 (2) (b) (title), 16.957 (2) (c) (intro.), 16.957 (2) (c) 1., 16.957 (2)
13(c) 2., 16.957 (2) (c) 2m., 16.957 (2) (c) 4., 16.957 (2) (d) 2., 16.957 (4) (a), 16.957
14(4) (c) 1. c., 16.957 (5) (b) 1., 16.957 (5) (b) 2., 16.957 (5) (c), 16.957 (5) (d) 1. a.,
116.957 (5) (d) 1. b., 16.957 (5) (d) 2. (intro.), 16.957 (5) (d) 2. a., 16.957 (5) (d) 2.
2b., 16.957 (5) (d) 3. (intro.), 16.957 (5) (d) 3. a., 16.957 (5) (d) 3. b., 16.957 (5) (e)
3(intro.), 16.957 (5) (e) 1., 16.957 (5) (e) 2., 25.96, 76.28 (1) (d), 76.48 (1g) (d), 77.54
4(44), 79.005 (4) (d), 101.027 (2), 101.027 (3) (a) 1., 101.027 (3) (a) 2., 101.027 (3)
5(b) 1., 101.027 (3) (b) 2., 196.374 (title), 196.374 (2) (intro.), 196.374 (3), 196.378
6(1) (a), 196.378 (1) (g), 196.378 (1) (i), 196.378 (2) (c), 196.378 (3) (b), 285.48 (1)
7(c), 285.48 (2), 285.48 (4) (a) and 285.48 (4) (b);
to repeal and recreate 196.378
8(2) (a) and 196.378 (2) (e); and
to create 13.94 (1) (r), 16.75 (12), 16.855 (10s),
916.957 (1) (hm), 16.957 (1) (qg), 16.957 (1) (rm), 16.957 (2) (bg), 16.957 (2) (br)
10(title), 16.957 (2) (d) 5., 20.924 (1) (j), 71.26 (1) (g), 196.374 (1) (title), 196.374
11(1) (an), 196.374 (1) (ar), 196.374 (1) (aw), 196.374 (1) (be), 196.374 (1) (bm),
12196.374 (1) (bs), 196.374 (2) (title), 196.374 (3m), 196.374 (3r), 196.374 (4m),
13196.374 (5), 196.374 (7), 196.378 (1) (fm), 196.378 (1) (n) 2., 196.378 (3) (a) 2.,
14196.378 (3) (c) and 196.378 (4m) of the statutes;
relating to: administration
15and funding of programs for utility public benefits; renewable energy
16requirements for utilities and retail electric cooperatives; energy efficiency
17requirements for state construction; revising and reviewing the state energy
18conservation code; state use of renewable energy resources; anaerobic digestor
19research; and granting rule-making authority.
Analysis by the Legislative Reference Bureau
This bill does all of the following: 1) makes changes to the "public benefits
program"; 2) makes changes to renewable energy requirements that apply to electric
utilities and cooperatives; 3) creates requirements for certain state agencies to
generate or purchase renewable energy; 4) imposes energy efficiency standards on
certain state contracts; 5) makes changes to the state energy conservation code; and
6) requires a funding request for anaerobic digestor research.
Public benefits program
Under current law, the Department of Administration (DOA) is required to
establish programs for providing energy assistance to low-income households
(low-income programs), for energy conservation and efficiency services (energy
efficiency programs), and for encouraging the development and use of renewable
energy resources (renewable resource programs). Collectively, these programs are
commonly referred to as the public benefits program. DOA is required to contract
with nonprofit corporations, community action agencies, or local units of government
to provide services under the low-income programs, and to contract with nonprofit
corporations to administer the energy efficiency and renewable resource programs.
There are three sources of funding for the public benefits program.
The first funding source consists of monthly public benefits fees that DOA
collects from nonmunicipal electric utilities, which must charge the fees to their
customers. Municipal electric utilities and retail electric cooperatives (municipal
utilities and cooperatives) are also required to charge monthly public benefits fees
to their customers or members. Every three years, a municipal utility or cooperative
may elect to contribute all or a specified portion of the public benefits fees to DOA.
A municipal utility or cooperative that does not elect to contribute all of the public
benefits fees to DOA must spend specified portions of the fees on its own low-income,
energy efficiency, and renewable resource programs. DOA deposits all public
benefits fees received from nonmunicipal electric utilities, municipal utilities, and
cooperatives into the utility public benefits fund.
Regarding the first funding source, current law requires DOA to promulgate
rules for determining the amount of monthly public benefits fees that electric
utilities must charge customers. There are two portions to the amount. One portion
is the amount needed in a fiscal year for the low-income programs. Current law
specifies a formula for DOA to use to determine this portion. The other portion is the
amount needed in a fiscal year for the energy efficiency and renewable resource
programs. Under current law, the amount for this portion is the difference between
$20 million and 50 percent of the estimated public benefits fees charged by municipal
utilities and cooperatives in a fiscal year. However, under certain circumstances,
DOA may reduce the amount for this portion. With respect to municipal utilities and
cooperatives, current law requires them to charge monthly public benefits fees that
ensure that they collect an annual average of $16 per meter.
The second funding source consists of contributions made by nonmunicipal gas
and electric utilities. Under current law, the Public Service Commission (PSC) is
required to determine the amount that a gas or electric utility spent on low-income,
conservation, renewables, and environmental research and development programs
in 1998. Each year, a gas or electric utility must spend a decreasing portion of the
amount spent on each type of program and contribute an increasing portion of such
amount to the PSC for deposit in the utility public benefits fund.
The third funding source consists of voluntary contributions made by
customers of nonmunicipal electric utilities and municipal utilities and members of
cooperatives. The voluntary contributions are also deposited into the utility public
benefits fund.
The bill makes the following changes to the public benefits program:
In general. Regarding the first funding source described above, the bill
eliminates DOA's role in determining the amounts needed to fund energy efficiency
and renewable resource programs, and requires the PSC to determine such amounts.
The bill makes no changes to DOA's determination of the amount needed for
low-income programs. The bill makes no substantive changes to the second funding
source described above. The bill makes no substantive changes to the requirements
under current law regarding municipal utilities and cooperatives. The bill requires
the PSC to contract with a fiscal agent to collect the funding for the public benefits
program (fiscal agent).
Funding. Regarding the first funding source described above, the bill requires
the PSC to determine the amount needed for energy efficiency and renewable
resource programs, which must be an amount equal to the amount that would be
generated under current law under the portion of the public benefits fee for energy
efficiency and renewable resource programs that are described above. The PSC must
also determine the amount that each nonmunicipal electric utility must collect from
ratepayers to collect the total amount needed for low-income programs, as
determined by DOA. Nonmunicipal electric utilities must pay the amounts collected
from ratepayers to the fiscal agent. Nonmunicipal electric utilities must also pay to
the fiscal agent the contributions under the second funding source described above.
For municipal utilities and cooperatives, the bill makes no changes, except that,
if a municipal utility or cooperative elects to contribute monthly public benefits fees,
rather than administer its own programs, the municipal utility or cooperative must
pay the fees to the fiscal agent. Likewise, the bill requires voluntary contributions
described under the third funding source above to be paid to the fiscal agent.
The fiscal agent must deposit any funding it receives for low-income programs
in the utility public benefits fund. With respect to any funding that the fiscal agent
receives for energy efficiency and renewable resource programs, the fiscal agent
must hold such funding in trust exclusively for the payment of grants as directed by
DOA.
Program administration. The bill makes no changes to the low-income
programs administered by DOA under current law. With respect to energy efficiency
and renewable resource programs, as under current law, DOA must contract with
nonprofit corporations to administer the programs. In addition, the bill requires
DOA to direct the fiscal agent to pay grants for the programs. However, the bill
requires the PSC to oversee the measurement and evaluation of the programs. Also,
the PSC must contract with an independent auditor to evaluate the programs and
submit annual reports to the legislature regarding the audits.
Utility-administered programs. The bill allows nonmunicipal electric
utilities to administer their own public benefits programs in their service territories,
but only with the approval of the PSC. For energy efficiency and renewable resource
programs, the PSC may, under certain circumstances, allow a nonmunicipal electric
utility to retain a portion of the amount it is otherwise required to pay to the fiscal
agent.
Other changes. The bill also does all of the following:
1. The bill allows the fiscal agent to collect from nonmunicipal electric utilities
the amounts needed for the fiscal agent's expenses, as specified in the contract with
the PSC.
2. The bill requires nonmunicipal electric utilities to identify on customer bills
the amounts collected for the public benefits program. In addition, nonmunicipal
electric utilities must provide an annual statement to customers identifying the costs
and benefits of the program.
3. The bill requires the PSC to ensure in rate-making orders that nonmunicipal
electric utilities recover from ratepayers the following: 1) the payments that the
utilities make to the fiscal agent; and 2) the amounts spent on public benefits
programs administered by the utilities.
4. The bill requires the PSC to ensure that the funding required for energy
efficiency and renewable resource programs is equitably divided among
nonmunicipal electric utilities so that similarly situated ratepayers contribute
equivalent amounts.
5. The bill eliminates provisions under current law regarding the air quality
improvement fund. (The fund was created in the same act as the public benefits
program. The conditions necessary for depositing money into the fund and paying
grants from the fund have never occurred.)
Renewable portfolio standard
Under current law, electric utilities and cooperates must comply with deadlines
for providing electricity derived from renewable resources, as defined under current
law, to their customers and members in specified percentages of their total retail
electric sales. The percentages and deadlines are as follows: 1.2 percent by December
31, 2005; 1.55 percent by December 31, 2007; 1.9 percent by December 31, 2009; and
2.2 percent by December 31, 2011. The percentages may be satisfied by providing
such electricity directly to customers and members or by purchasing renewable
resource credits from other electric utilities and cooperatives. The foregoing
requirements are commonly referred to as the renewable portfolio standard.
The bill eliminates the deadlines described above and creates new deadlines
that are based on the percentage of an electric utility's or cooperative's total retail
sales in 2004 that were derived from renewable energy resources. (In general, the
bill does not affect the definition of renewable resources under current law.) By
December 31, 2010, each electric utility and cooperative must increase its percentage
so that it is at least two percentage points above the 2004 percentage. By December
31, 2015, each electric utility and cooperative must increase its percentage so that
it is at least six percentage points above the 2004 percentage. In addition, by
December 31, 2015, each electric utility and cooperative must have a percentage that
is sufficient to ensure that the average percentage for all electric utilities and
cooperatives is at least 10 percent. The bill requires electric utilities and
cooperatives to submit annual reports to the PSC identifying their percentage for the
previous year and describing their compliance with the foregoing requirements and
their plans for future compliance. No later than 90 days after the PSC receives a
report from an electric utility or cooperative, the PSC must inform the electric utility
or cooperative whether the electric utility or cooperative is compliance with the
foregoing requirements.
Under the bill, an electric utility or cooperative may request that the PSC grant
a delay for complying with the foregoing deadlines. The PSC may grant the delay,
but only if the electric utility or cooperative demonstrates good faith efforts to comply
and makes an additional demonstration regarding any of the following: 1)
undesirable impacts on the reliability of the electric utility's or cooperative's system;
2) excessive increases in rates; 3) delays in obtaining required approvals; or 4)
transmission constraints.
The bill changes certain requirements under current law for calculating an
electric utility or cooperative's percentage. Under current law, an electric utility of
cooperative can include in the percentage electricity derived from renewable energy
facilities owned or operated by the electric utility or cooperative. Under the bill, if
an electric utility or cooperative is part of an interconnected multistate system
serving this state, the electric utility or cooperative may also include electricity
derived from renewable energy facilities in that system, even if they are not owned
or operated by the electric utility or cooperative. The bill also changes the
requirements for energy derived from hydroelectric plants. Under current law,
hydroelectric plants with a capacity of less than 60 megawatts are considered
renewable energy resources. However, if such a plant was in service before January
1, 1998, no more than 0.6 percent of an electric utility's or cooperative's percentage
may be attributable to such a plant. The bill eliminates this restriction. As result,
any electricity derived from a hydroelectric power plant with a capacity of less than
60 megawatts, even if the plant was in service before January 1, 1998, may be
included in the percentage.
The bill also makes certain changes to credits. Under current law, an electric
utility or cooperative that exceeds a required percentage may create a credit that the
electric utility or cooperative may use to satisfy a percentage in a subsequent year
or sell to another electric utility or cooperative that the purchasing electric utility or
cooperative may use to satisfy a percentage. Current law requires the PSC to
promulgate rules for calculating and using credits.
The bill provides that any credit created under current law may not be used
after December 31, 2011. The bill also provides that any credit created after the
effective date of the bill may not be used four years after it is created, except that the
PSC may promulgate rules specifying a different time period. The PSC may
promulgate such rules if a different time period is necessary for consistency with any
regional credit trading program that applies in this state. The bill also creates new
requirements for calculating the amount of a credit created after January 1, 2004,
from a facility that was placed in service before January 1, 2004. Under the bill, the
PSC must promulgate rules that provide that the amount of such a credit is limited
to the incremental increase in output from the facility that is due to capacity
improvements made after January 1, 2004.
The bill also requires the PSC to promulgate rules that allow a wholesale
customer of an electric utility or cooperative to use an allocated portion of a credit
purchased by the electric utility or cooperative. However, the rules must provide that
the wholesale customer may use the allocated portion only if the cost of renewable
energy resources is included in wholesale rates paid by the wholesale customer. The
PSC's rules must specify the manner for making the allocation. Current law does not
address whether wholesale customers can use credits in such a manner.
State agency use of renewable energy
The bill requires DOA to establish goals for specified state agencies to generate
or purchase electric energy derived from renewable resources. ("Renewable
resources" has the same meaning as "renewable resources" under the renewable
portfolio standard described above.) The agencies that are subject to the goals are:
DOA, the Department of Corrections, the Department of Health and Family
Services, the Department of Natural Resources, the Department of Public
Instruction, the Department of Veterans Affairs, the State Fair Park Board, and the
Board of Regents of the University of Wisconsin System. The goals apply to electric
energy generated or purchased by the state for power, heating, or cooling purposes
for all state owned or leased buildings occupied, operated, or used by the foregoing
agencies.
The bill requires DOA to establish goals for each agency that are designed to
accomplish the following goals: 1) that the percentage of electric energy generated
or purchased by all of the above agencies for the above purposes that is derived from
renewable resources (which the bill defines as the "renewable percentage") by
December 31, 2006, is at least 10 percent; and 2) that the renewable percentage by
December 31, 2011, is at least 20 percent. In determining whether the goals are
accomplished, DOA must calculate renewable percentages based on the annual
average for the three years prior to the foregoing deadlines. However,
notwithstanding these goals, the bill provides that no agency is required to generate
or purchase electric energy derived from renewable resources if the generation or
purchase is not technically feasible or cost-effective. The bill requires DOA to submit
an annual report to the governor and legislature regarding the attainment of the
goals during the preceding year.
The bill also requires, in each fiscal year, that DOA determine the costs incurred
by the agencies in complying with the goals that are in excess of the costs the agencies
would have incurred in the absence of such goals. DOA must certify the amount that
it determines to the PSC. The PSC must require the fiscal agent described above to
collect from nonmunicipal electric utilities the amount certified or $1,000,000,
whichever is less, and deposit the amount collected in the utility public benefits fund.
In each fiscal year, DOA must transfer the amount collected from the utility public
benefits fund to the general fund. However, if an agency's utility costs are paid from
a segregated fund, DOA must reduce the transfer to the general fund by an amount
that DOA determines is attributable to such utility costs, and transfer the amount
of the reduction from the utility public benefits fund to the segregated fund.
Energy efficiency standards under state contracts
The bill requires DOA to prescribe and annually review and revise as necessary
energy efficiency standards for equipment installed under state construction
projects. The equipment subject to the standards is equipment relating to heating,
ventilation, air conditioning, water heating or cooling, lighting, refrigeration, or any
function that consumes energy. The standards must meet or exceed the following:
1) U.S. Environmental Protection Agency guidelines; 2) guidelines that apply to a
federal energy management program for federal energy consumption; and 3)
standards established by the American Society of Heating, Refrigerating and
Air-Conditioning Engineers (society).
For equipment that is subject to the guidelines, DOA must ensure that
specifications for the equipment under any contract administered by DOA meet the
standards. If there is no standard for the type of equipment purchased under a
contract, or if equipment that meets a standard is not reasonably available, DOA
must ensure that the equipment that is selected maximizes energy efficiency to the
extent technically and economically feasible. The bill includes requirements for
DOA to determine whether or not equipment meeting a standard is reasonably
available, as well as for determining whether the energy efficiency of equipment
selected is economically feasible.
The bill also prohibits the Building Commission from entering into a lease or
other contract that provides for construction of a building, structure, or facility to be
initially occupied by the state and that contains an option for the state to purchase
the building, structure, or facility, unless the lessor or seller agrees that all
energy-consuming equipment to be installed meets the standards described above.
Energy Conservation Code
Under current law, the Department of Commerce (department) is required to
promulgate an Energy Conservation Code for the purpose of energy conservation in
public buildings and places of employment and to review that code. In conducting
the review, the department must consider incorporating into the Energy
Conservation Code design requirements from the most current national energy
efficiency design standards that are generally acceptable and used by engineers and
the construction industry, including a 1989 version of a standard adopted by the
society. The department must promulgate rules that revise that code to improve
energy conservation whenever the society revises its standards for the energy
efficient design of new buildings and whenever five years have elapsed since the last
review of that code.
This bill eliminates the reference to the 1989 version of the standards described
above, and refers instead to the International Energy Conservation Code. The bill
also changes the five-year revision requirement to a three-year requirement. In
addition, the bill requires the department, notwithstanding the foregoing
requirements, to begin a review of the Energy Conservation Code on the effective
date of the bill and to complete that review and submit proposed rules changing the
Energy Conservation Code to improve energy conservation to the Legislative Council
Staff by no later than the first day of the 18th month beginning after the effective
date of the bill. In conducting the review, the department must consider
incorporating the most recent national standards of the society.
Anaerobic digestor research
The bill requires the Department of Agriculture, Trade and Consumer
Protection to include, as part of its 2007-09 biennial budget request, a proposal to
provide additional funding for the research and development of anaerobic digestors
at farms participating in the Discovery Farms Program under the Wisconsin
Agricultural Stewardship Initiative.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB459, s. 1
1Section
1. 13.94 (1) (r) of the statutes is created to read:
SB459,9,42
13.94
(1) (r) Audit the records of the fiscal agent, as defined in s. 16.957 (1) (hm),
3as requested by the public service commission or the joint legislative audit
4committee.
SB459, s. 2
5Section
2. 16.75 (12) of the statutes is created to read:
SB459,9,66
16.75
(12) (a) In this subsection:
SB459,9,117
1. "Agency" means the department of administration, the department of
8corrections, the department of health and family services, the department of natural
9resources, the department of public instruction, the department of veterans affairs,
10the state fair park board, and the Board of Regents of the University of Wisconsin
11System.
SB459,9,1312
2. "Agency building" means any state-owned or leased building that is
13occupied, operated, or used by an agency.
SB459,9,1514
3. "Renewable percentage" means the percentage of total annual electric
15energy that is derived from renewable resources.
SB459,9,1816
4. "Renewable resource" has the meaning given in s. 196.378 (1) (h) 1. or 2. and
17includes a resource, as defined in s. 196.378 (1) (j), that derives electricity from
18hydroelectric power.
SB459,10,3
15. "Total annual electric energy" means the total annual amount of electric
2energy generated or purchased by the state for power, heating, or cooling purposes
3for all agency buildings.
SB459,10,54
(b) The department shall establish goals for each agency that are designed to
5accomplish the following goals:
SB459,10,76
1. That the renewable percentage for total annual electric energy by December
731, 2006, is at least 10 percent.
SB459,10,98
2. That the renewable percentage for total annual electric energy by December
931, 2011, is at least 20 percent.
SB459,10,1210
(c) In determining whether the goals under par. (b) are accomplished, the
11department shall calculate total annual electric energy on the basis of an average of
12the total annual electric energy during the 3 years prior to the specified dates.
SB459,10,1513
(d) Notwithstanding par. (b), an agency is not required to generate or purchase
14electric energy derived from renewable resources if the generation or purchase is not
15technically feasible or cost-effective.
SB459,10,1616
(e) In each fiscal year, the department shall do all of the following: