LRB-3883/1
ALL:all:ph
2009 - 2010 LEGISLATURE
January 7, 2010 - Introduced by Senators Miller and Plale, cosponsored by
Representatives Black and Soletski, by request of Governor James E. Doyle.
Referred to Select Committee on Clean Energy.
SB450,5,12
1An Act to repeal 20.155 (3) (s), 196.374 (1) (i), 196.374 (1) (o), 196.374 (3) (b)
2(title) and 2. to 4., 196.374 (5) (bm) 3., 196.374 (7) (a), 196.374 (7) (b) 2., 196.374
3(7) (c), 196.374 (7) (d), 196.377 (title), 196.377 (2), 196.378 (1) (am), 196.378 (1)
4(b), 196.378 (1) (fr), 196.378 (1) (h) 1., 1m. and 2., 196.378 (1) (j), 196.378 (1) (o),
5196.378 (2) (b) 2., 196.378 (2) (b) 4. and 5. and 196.378 (4);
to renumber 16.965
6(1) (a), 84.185 (4), 196.025 (1) (ag) 1., 196.25 (1), 196.374 (7) (b) (title), 196.377
7(1), 196.378 (1) (c) and (d), 196.378 (1) (fm) (intro.), 196.378 (1) (g), 196.378 (1)
8(k), 196.378 (1) (p), 196.49 (1), 196.491 (5), 196.493 (2) (b) 3., 196.65 (1), 196.66
9(1) and 292.75 (5);
to renumber and amend 26.38 (2m) (b), 101.027 (1),
10196.025 (1) (b) 1., 196.374 (7) (b) 1., 196.374 (8), 196.378 (1) (intro.) and (ag),
11196.378 (1) (ar), 196.378 (1) (fg), 196.378 (1) (fm) 1., 196.378 (1) (fm) 2., 196.378
12(1) (h) (intro.), 196.378 (1) (i), 196.378 (2) (c), 196.491 (1) (g), 196.491 (1) (w) 2.,
13196.491 (3m) (d), 196.493 (1), 196.493 (2) (intro.), 196.493 (2) (a), 196.493 (2) (b)
14(intro.), 196.493 (2) (b) 1., 196.493 (2) (b) 2., 285.30 (5), 292.75 (7), 560.032 (1),
1560.032 (2), 560.302 and 560.305 (4);
to consolidate, renumber and amend
2196.374 (3) (a) and (b) 1. and 196.374 (3) (c) 2. (intro.), a. and b.;
to amend 16.75
3(12) (a) 4., 16.965 (2), 25.96, 66.0309 (title), 66.0602 (2), 77.54 (30) (a) 1m.,
479.005 (1b), 79.005 (4) (d), 79.04 (6) (a), 84.185 (3) (a) (intro.), 101.027 (2),
5101.027 (3) (a) 1., 101.027 (3) (b) 1., 101.62, 101.63 (1) (intro.), 101.80 (1j), 110.20
6(1) (b), 110.20 (3) (a), 196.025 (1) (b) 2., 196.025 (1) (c) 1., 196.025 (1) (c) 2.,
7196.025 (2m) (c), 196.374 (1) (b), 196.374 (1) (c), 196.374 (1) (d), 196.374 (1) (f),
8196.374 (1) (j) (intro.), 196.374 (2) (a) 1., 196.374 (2) (a) 2. (intro.), 196.374 (2)
9(a) 2. a., 196.374 (2) (a) 2. b., 196.374 (2) (a) 2. d., 196.374 (2) (a) 3., 196.374 (2)
10(b) (title), 196.374 (2) (b) 1., 196.374 (2) (b) 2., 196.374 (2) (b) 3., 196.374 (2) (c),
11196.374 (3) (c) (title), 196.374 (3) (c) 1., 196.374 (3) (d), 196.374 (3) (e) 1., 196.374
12(3) (e) 2., 196.374 (3) (f) 1., 196.374 (3) (f) 2., 196.374 (3) (f) 3., 196.374 (3) (f) 4.,
13196.374 (4) (a) (intro.), 196.374 (4) (a) 1., 196.374 (4) (a) 2., 196.374 (4) (b),
14196.374 (5) (a), 196.374 (5) (d), 196.374 (5m) (a), 196.374 (5m) (b), 196.374 (6),
15196.374 (7) (e) 1. (intro.), 196.374 (7) (e) 1. a., 196.374 (7) (e) 1. b., 196.374 (7)
16(e) 1. c., 196.378 (2) (a) 1., 196.378 (2) (a) 2. c., 196.378 (2) (a) 2. d., 196.378 (2)
17(a) 2. e., 196.378 (2) (b) (intro.), 196.378 (2) (b) 1m. (intro.), 196.378 (2) (b) 1m.
18a., 196.378 (2) (d) (intro.), 196.378 (2) (e) (intro.), 196.378 (2) (f), 196.378 (2) (g)
192., 196.378 (4m) (a), 196.378 (4m) (b), 196.378 (5) (intro.), 196.378 (5) (a), 196.49
20(2), 196.49 (3) (a), 196.49 (4), 196.49 (6), 196.491 (3) (d) (intro.), 196.491 (3) (d)
212., 196.491 (3) (d) 3., 196.491 (3) (g), 196.491 (3m) (title), 196.491 (3m) (a)
22(intro.), 196.491 (3m) (b) 1. am., 196.491 (3m) (b) 3. b., 196.491 (3m) (c) 1. a.,
23196.493 (title), 196.494 (1) (a), 196.52 (9) (g), 196.66 (2), 196.66 (4) (b), 196.795
24(11) (b), 196.85 (1m) (a), 285.30 (2) (intro.), 285.87 (1), 285.87 (2) (a), 299.97 (1),
25560.032 (4), 560.081 (2) (e), 560.13 (2) (b) 2., 560.13 (3) (intro.) and 560.205 (1)
1(g);
to repeal and recreate 196.374 (7) (e) (title) and 196.378 (3);
to create
215.347 (3), 16.856, 16.954, 16.956 (1) (bk) and (bn) and (3) (f) to (i), 16.956 (3)
3(j), 16.965 (1) (ag), 16.965 (1) (c), 16.965 (4) (g), 16.965 (5), 20.115 (4) (d), 26.38
4(2m) (b) 2., 26.38 (3) (d), 26.42, 36.605, 66.0309 (17), 66.0602 (3) (e) 9., 76.28 (1)
5(gm) 3., 84.185 (1) (br) and (cr), 84.185 (2) (b) 15., 84.185 (2) (d), 84.185 (2m),
684.185 (4) (b), 85.021, 85.0215, 93.47, 93.475, 100.215, 101.02 (23), 101.027 (1g),
7101.027 (1r), 101.027 (4), 101.028, 101.173, 101.63 (1m), 101.80 (2m), 196.025
8(1) (ag) 1g., 196.025 (1) (b) 1. b., 196.025 (1) (c) 3., 196.025 (1) (e), 196.025 (7),
9196.25 (1g), 196.374 (1) (am), 196.374 (1) (dm), 196.374 (1) (er), 196.374 (1)
10(hm), 196.374 (1) (ig), 196.374 (1) (ir), 196.374 (1) (j) 8., 196.374 (1) (mb), 196.374
11(1) (me), 196.374 (1) (mh), 196.374 (1) (mL), 196.374 (1) (mo), 196.374 (1) (mr),
12196.374 (1) (mu), 196.374 (3) (bc), (bg), (bn), (br) and (bw), 196.374 (3) (c) 2. am.,
13bm., c., d. and e., 196.374 (3) (dm), 196.374 (5m) (am), 196.374 (7) (am), 196.374
14(7) (bg), 196.374 (7) (cm), 196.374 (7) (dm), 196.374 (7) (e) 1. e., 196.374 (8) (a),
15(b) and (c), 196.374 (9), 196.378 (1g), 196.378 (1r) (de), 196.378 (1r) (dm),
16196.378 (1r) (ds), 196.378 (1r) (fg) 2., 196.378 (1r) (fg) 3., 196.378 (1r) (fm) 3.,
17196.378 (1r) (fm) 4., 196.378 (1r) (gm), 196.378 (2) (a) 2. f., 196.378 (2) (a) 2. g.,
18196.378 (2) (a) 2. h., 196.378 (2) (a) 2. i., 196.378 (2) (b) 1r., 196.378 (2) (b) 2m.,
19196.378 (2) (bm), 196.378 (2) (h), 196.378 (3m), 196.379, 196.49 (1g), 196.49 (3)
20(cm), 196.49 (5m), 196.491 (1) (g) 2., 196.491 (1) (i), 196.491 (1) (j), 196.491 (1)
21(w) 2. b., 196.491 (3) (em), 196.491 (3m) (d) 1., 196.491 (3m) (d) 2., 196.491 (5)
22(am), 196.491 (5) (c) 1. am., 196.491 (5) (c) 2. bm., 196.493 (1g), 196.493 (1r) (ag),
23196.493 (1r) (b), 196.493 (2) (am) 1m., 196.493 (2) (am) 2. c., 196.493 (2) (am)
243., 196.493 (2) (am) 4., 196.493 (2) (c), 196.493 (3), 196.493 (4), 196.494 (1) (am),
25196.65 (1g), 196.65 (2), 196.66 (1g), 196.795 (6m) (a) 4m., 196.795 (6m) (cm),
1196.80 (1r), 196.85 (1m) (e), 285.305, 285.60 (11), 285.795, 292.75 (5) (a) 2m.,
2292.75 (5) (b), 292.75 (5m), 292.75 (7) (b), 299.03, 299.035, 299.04, 299.045,
3346.94 (21), 346.95 (11), 560.032 (1g), 560.032 (1r) (b), 560.032 (2) (b), 560.081
4(1m), 560.081 (2) (f) 6., 560.13 (2) (b) 3., 560.13 (3) (em), 560.13 (3m), 560.302
5(1m) and 560.305 (4) (b) of the statutes; and
to affect 1983 Wisconsin Act 401,
6section
1;
relating to: goals for reductions in greenhouse gas emissions, for
7construction of zero net energy buildings and for energy conservation;
8information, analyses, reports, education, and training concerning greenhouse
9gas emissions and climate change; energy efficiency and renewable resource
10programs; renewable energy requirements of electric utilities and retail
11cooperatives; requiring electric utilities to purchase renewable energy from
12certain renewable facilities in their service territories; authority of the Public
13Service Commission over nuclear power plants; motor vehicle emission
14limitations; a low carbon standard for transportation fuels; the brownfield site
15assessment grant program, the main street program, the brownfields grant
16program, the forward innovation fund, grants to local governments for
17planning activities, the transportation facilities economic assistance and
18development program, a model parking ordinance; surface transportation
19planning by the Department of Transportation and metropolitan planning
20organizations to reduce greenhouse gas emissions; environmental evaluations
21for transportation projects; idling limits for certain vehicles; energy
22conservation codes for public buildings, places of employment, one- and
23two-family dwellings, and agricultural facilities; design standards for state
24buildings; energy efficiency standards for certain consumer audio and video
25devices, boiler inspection requirements; greenhouse gas emissions and energy
1use by certain state agencies and state assistance to school districts in
2achieving energy efficiencies; creating an exception to local levy limits for
3amounts spent on energy efficiency measures; creating an energy crop reserve
4program; identification of private forest land, promoting sequestration of
5carbon in forests, qualifying practices and cost-share requirements under the
6forest grant program established by the Department of Natural Resources; air
7pollution permits for certain stationary sources reducing greenhouse gas
8emissions; allocating a portion of existing tax-exempt industrial development
9revenue bonding to clean energy manufacturing facilities and renewable power
10generating facilities; requiring a report on certain programs to limit
11greenhouse gas emissions; granting rule-making authority; requiring the
12exercise of rule-making authority; and providing a penalty.
Analysis by the Legislative Reference Bureau
This bill contains numerous provisions relating to reducing greenhouse gas
emissions, and increasing energy efficiency and the use of renewable resources to
produce energy.
Greenhouse gas emission reduction goals
This bill specifies goals for statewide reductions in net greenhouse gas
emissions. The goals are: that the amount of emissions in 2014 does not exceed the
amount in 2005; that the amount of emissions in 2022 is at least 22 percent less than
the amount in 2005; and that the amount of emissions in 2050 and thereafter is at
least 75 percent less than the amount in 2005. The bill requires the Department of
Natural Resources (DNR) to quadrennially assess progress toward meeting the
goals.
Zero net energy building goal
This bill specifies that it is the goal of this state that by 2030 each newly
constructed residential or commercial building will use no more energy than is
generated on-site using renewable resources. The bill requires the Department of
Commerce (Commerce) to quadrennially assess progress toward meeting the goal.
Energy conservation goals
This bill specifies goals for reductions in projected statewide consumption of
electricity, liquified petroleum gas, heating oil, and natural gas by percentages
specified in the bill. The bill requires the Public Service Commission (PSC) to
quadrennially assess progress toward meeting the goals.
Information, analyses, and reports
This bill requires DNR to collect or estimate information on greenhouse gas
emissions, to prepare inventories and analyses of greenhouse gas emissions, and to
quadrennially prepare an assessment of whether this state is meeting current
greenhouse gas emission reduction goals and of whether the state is likely to meet
future goals. The bill requires DNR to propose new climate change programs or
changes in existing programs or goals.
The bill creates the Climate Change Coordinating Council (council), consisting
of the heads of specified state agencies or their designees, and requires the council
to make recommendations on climate change policy to the legislature and the
governor based on DNR's assessments and other information. The bill also requires
the council to promote and coordinate educational and training programs related to
climate change.
Under current DNR rules, the threshold for a stationary source of air emissions
to report its emissions of carbon dioxide is 100,000 tons per year. The bill requires
DNR to lower the threshold to 10,000 tons per year and to require a source that must
report its emissions of carbon dioxide to also report methane and nitrous oxide
emissions from the combustion of fuel.
Energy efficiency and renewable resource programs
Under current law, investor-owned electric and natural gas utilities (energy
utilities) must collectively fund and establish statewide energy efficiency and
renewable resource programs. This bill refers to these programs as "statewide
programs." Subject to approval by the PSC, the energy utilities must contract with
one or more persons to develop and administer the statewide programs. The bill
refers to such persons as statewide programs contractors. Current law defines
"energy efficiency program" as a program for reducing the usage or increasing the
efficiency of the usage of energy by customers, other than certain daily or seasonal
demand management programs. Current law defines "renewable resource program"
as, in part, a program for encouraging the development or use of customer
applications of a "renewable resource," which is defined as a resource deriving energy
from a source other than coal, petroleum products, nuclear power or, except as used
in a fuel cell, natural gas. "Renewable resource" is also defined to include a resource
deriving energy from solar energy, wind or water power, biomass, geothermal
technology, tidal or wave action, or certain types of fuel cell technologies.
Current law also allows, but does not require, an energy utility to administer,
subject to PSC approval, energy efficiency programs limited to large commercial,
industrial, institutional, or agricultural customers in its service territory. The bill
refers to these programs as "utility-administered programs." In addition, the PSC
may also allow an energy utility to administer additional energy efficiency or
renewable resource programs, which are referred to as "supplemental utility
programs." Also, the PSC may allow certain large energy customers of energy
utilities to administer their own energy efficiency programs, which are referred to
as "large energy customer programs." Under current law, with certain exceptions,
the PSC must require energy utilities to spend 1.2 percent of their operating
revenues on statewide programs and utility-administered programs, and the PSC
must ensure in rate-making orders that an energy utility recovers from its
customers the amounts it spends on statewide programs, subject to certain
requirements regarding customer classes and large energy customers.
Municipal electric utilities and retail electric cooperatives are subject to
different requirements. Under current law, subject to certain exceptions, municipal
electric utilities and retail electric cooperatives must charge a monthly fee to each
customer or member that is sufficient to collect an annual average of $8 per meter.
Municipal electric utilities and retail electric cooperatives must either contribute the
amounts collected to the statewide programs or administer their own energy
efficiency programs, which are referred to as "commitment to community programs."
The bill makes the following changes to the requirements described above.
Liquified petroleum gas and heating oil. Under current law, only the users
of electricity and natural gas are eligible to participate in energy efficiency and
renewable resource programs. The bill allows users of liquified petroleum gas or
heating oil to participate in energy efficiency programs as well. The bill refers to
electricity and natural gas as "regulated fuels" and liquified petroleum gas and
heating oil as "unregulated fuels." Regulated and unregulated fuels are jointly
referred to as "target fuels."
Program goals and funding. Under current law, the PSC has oversight of
the statewide, utility-administered, supplemental utility, and large energy
customer programs, and must coordinate all programs with similar purposes. At
least every four years, the PSC is required to evaluate the programs and to set or
revise goals, priorities, and measurable targets for the programs. The bill creates
more detailed requirements for the PSC's review of programs, including
requirements for setting goals and funding programs.
The bill requires the PSC to conduct a proceeding every four years to assess the
reduction in the use of and demand for each target fuel that can be achieved in each
year of the upcoming quadrennium through each of the following: 1) energy
efficiency and renewable resource programs administered by energy utilities,
municipal electric utilities, retail electric cooperatives, or others; 2) low-income
weatherization programs; 3) other programs and policy mechanisms under the PSC's
jurisdiction; and 4) other programs and policy mechanisms, such as appliance and
equipment efficiency standards, mandatory building codes, and voluntary
certification programs. Based on the foregoing assessments, the bill specifies a
formula for the PSC to establish goals for the reduction in use of or demand for each
target fuel for each year of the upcoming quadrennium. The PSC must establish one
set of goals for the statewide programs and a separate set of goals for each municipal
electric utility and retail electric cooperative. For the statewide programs, the PSC
sets goals for each regulated fuel that is based, in part, on the proportion of total sales
of the fuel that is attributable to all energy utilities. For an individual municipal
electric utility or retail electric cooperative, the PSC sets goals for regulated fuels
that are based, in part, on the proportion of total sales of the fuel that are attributable
to the utility or cooperative. For unregulated fuels, the PSC sets goals for the
statewide programs, but not for individual municipal electric utilities and retail
electric cooperatives.
Regarding funding, the bill repeals the requirements under current law for
energy utilities to spend 1.2 percent of their operating revenues and municipal
electric utilities and retail electric cooperatives to charge monthly fees to customers
and members. Instead, for municipal electric utilities and retail electric
cooperatives, the bill allows them to determine the funding amounts necessary to
achieve their goals for regulated fuels in each year of the upcoming quadrennium.
Except for assignments to wholesale suppliers, which are discussed below, a
municipal electric utility or retail electric cooperative must spend the amounts it
determines on commitment to community programs regarding the regulated fuel
that are administered individually by the municipal electric utility or retail electric
cooperative or jointly with other municipal electric utilities and retail electric
cooperatives. Alternatively, a municipal electric utility or retail electric cooperative
may spend the amounts it determines on contracts with a statewide programs
contractor or wholesale supplier to administer commitment to community programs
in the utility's or cooperative's service territory, or may spend the amount on any
combination of individually or jointly administered programs or contracts.
For energy utilities, the bill creates requirements for them to fund the
statewide programs. The PSC must determine the amount of funding required to
achieve the goal for each target fuel under the statewide programs for each year of
the upcoming quadrennium, and subtract from that amount any amounts the PSC
has authorized to be spent on utility-administered or large energy customer
programs for the target fuel. The difference is the total funding required for the
target fuel under the statewide programs. For regulated fuels, the PSC then
determines each energy utility's percentage of the total sales of the regulated fuel in
the quadrennium prior to the proceeding. Annually, an energy utility must pay to
statewide programs contractors an amount equal to that percentage multiplied by
the total funding required for the regulated fuel. However, an energy utility is
allowed to reduce its payment by any amount the PSC has authorized the utility to
spend on utility-administered programs and any amount the PSC has authorized
the utility's customers to spend on large energy customer programs. For unregulated
fuels, funding of the goals is borne by "prime suppliers," which the bill defines as
persons who import an unregulated fuel into this state for use in this state. The PSC
must determine each prime supplier's percentage of the total sales of the
unregulated fuel in the quadrennium prior to the proceeding. Annually, a prime
supplier must pay to statewide programs contractors an amount equal to that
percentage multiplied by the total funding required for the unregulated fuel.
Assignments to wholesale suppliers. Current law defines "wholesale
supplier" as a municipal electric company or wholesale electric cooperative that
supplies electricity at wholesale to a municipal electric utility or retail electric
cooperative. The bill allows a municipal electric utility or retail electric cooperative
to assign its duties regarding a goal to its wholesale supplier. A wholesale supplier
who accepts an assignment must notify the PSC, determine the funding amount
necessary to achieve the assigned goal, and spend the amount so determined in
administering commitment to community programs on behalf of the municipal
electric utility or retail electric cooperative. The wholesale supplier must also take
other actions regarding the municipal electric utility's or retail electric cooperative's
reporting and auditing duties with respect to the goal. In addition, if a wholesale
supplier accepts an assignment from more than one municipal electric utility or
retail electric cooperative, the wholesale supplier must carry out the its duties on an
aggregate basis on behalf of all the municipal electric utilities and retail electric
cooperatives that made an assignment.
Compliance and enforcement. Under the bill, the PSC must determine
whether the statewide and commitment to community programs have met their
goals on average over the quadrennium following the proceeding establishing the
goals. If a wholesale supplier accepts an assignment from more than one municipal
electric utility or retail electric cooperative, the PSC must determine whether the
relevant goals have been met on an aggregate basis. The PSC must also determine
whether utility-administered, supplemental utility, and large energy customer
programs have met their goals over the period of the program or another time period
determined by the PSC.
If the PSC determines that a program has failed to meet one or more goals, the
PSC must determine the reason for that failure. If the PSC determines that the
person responsible for the program made a good faith effort to meet the goals and that
the failure to do so was due to factors outside that person's control, the PSC must take
those factors into account in modifying goals when approving future programs
administered by that person. If the PSC determines that the person responsible for
the program did not make a good faith effort to meet the goals or that the failure to
do so was due to factors within that person's control, the PSC must implement
remedies specified in rules promulgated by the PSC. However, the PSC may find that
a person did not make a good faith effort only if the PSC finds that the person has
repeatedly or grossly failed to meet a goal or, with respect to a commitment to
community program, that the person administering the program did not determine
a funding amount that was reasonably necessary to meet the goal. In addition, the
PSC may promulgate rules specifying other conditions for finding that a person did
not make a good faith effort to meet a goal.
The bill requires that the remedies specified in the PSC's rules must be in
proportion to the magnitude of the failure and the degree to which the person did not
make a good faith effort or control the relevant factors. The potential remedies must
include an order that the person take corrective actions, which may include meeting
a goal in a time period specified by the PSC, in addition to meeting any other goals
that apply during that time period. In addition, for statewide programs, the
potential remedies must include the following: 1) an order that energy utilities or
a statewide programs contractor invoke any contractual remedies that imposes
monetary penalties for failure to meet a goal; 2) an order that the energy utilities
modify or terminate a contract with a statewide programs contractor; and 3) an order
that a statewide programs contractor terminate or modify any subcontract. For
utility-administered programs and large energy customer programs, the potential
remedies must include an order modifying or terminating the program. For
commitment to community programs, the potential remedies must include the
following: 1) modification or termination of a contract with, or assignment to, a
wholesale supplier; and 2) a requirement that a municipal electric utility or retail
electric cooperative enter into a contract with a statewide programs contractor.
Other changes. The bill makes other changes, including the following:
1. The bill creates additional requirements for the PSC's approval of
utility-administered, supplemental utility, and large energy customer programs.
The bill also clarifies that utility-administered and supplemental utility programs
must be limited to services related to regulated fuels and that supplemental utility
programs must be limited to an energy utility's customers. In addition, the bill allows
an energy utility to request PSC approval at any time to establish, modify, or
discontinue a utility-administered or supplemental utility program.
2. Current law requires that the PSC ensure that statewide and
utility-administered program costs are equitably divided among customer classes
and that customer classes have the opportunity to receive grants and benefits under
the programs in amounts equal to the amounts recovered from the class to fund the
programs. Under the bill, the PSC may allow a customer class the opportunity to
receive grants and benefits not equal to the amount recovered from the class if the
PSC finds that to do so is in the public interest and promotes the cost-effective
achievement of program goals.
3. The bill requires the PSC to promulgate rules for allowing, under specified
circumstances, an energy utility to earn a return on capital invested in energy
conservation or efficiency equipment under a utility-administered or supplemental
utility program.
4. The bill allows commitment to community programs to include renewable
resource programs, as well as the energy efficiency programs allowed under current
law.
5. Current law prohibits the PSC from imposing additional energy
conservation and efficiency requirements on energy utilities that have complied with
their duties under the statewide programs. The bill creates a similar prohibition
regarding municipal electric utilities and wholesale suppliers that have, on average,
complied with commitment to community program goals or have made a good faith
effort to comply.
6. Under current law, the PSC is required to annually contract for an audit of
statewide, utility-administered, supplemental utility, and large energy customer
programs. Under the bill, if an audit indicates that a program has failed to meet any
goal for any one year, the PSC must consult with the person administering the
program regarding ways to modify the program to ensure that it meets its goals.
7. The bill allows the PSC to recover its costs related to administering energy
efficiency and renewable resource programs through an assessment procedure
specified in current law.
8. The bill revises the definition of "renewable resource" so that it does not
include resources deriving energy from natural gas or nonbiological industrial,
commercial, or household waste. Under current law, a resource that derives energy
from natural gas used in a fuel cell is considered a renewable resource.
9. The bill requires the PSC to exercise its regulatory authority to ensure,
under certain circumstances, maximum reductions in the use of and demand for
regulated fuels.
10. The bill requires the PSC to ensure in its rate-making orders that
municipal electric utilities recover from ratepayers the amounts necessary to comply
with requirements for commitment to community programs. Current law imposes
a similar duty regarding energy utilities.
11. The bill requires the PSC to study whether its rules allow an adequate
opportunity for creating large energy customer programs and report its findings to
the legislature and governor.
Renewable portfolio standard
Under current law, electric utilities and retail electric cooperatives (electric
providers) are required to ensure that, in a given year, a specified percentage of the
electricity that the utility or cooperative sells to customers is generated from
renewable resources. These and related requirements are commonly referred to as
the renewable portfolio standard (RPS). The bill makes the following changes to the
RPS.
RPS deadlines. Under current law, the RPS includes deadlines that apply to
an electric provider's "renewable energy percentage" (REP). In general, an electric
provider's REP for a particular year is the percentage resulting from the proportion
in which the denominator is the total amount of electricity that the electric provider
sold to customers or members in the year and the numerator is the sum of the
following: 1) the amount of electricity derived from renewable resources that the
electric provider sold to its customers or members in the year; and 2) the amount of
any renewable resource credits (RRCs) that the electric provider elects to use in the
year. Current law generally prohibits an electric provider from decreasing its REP
in 2009 below the electric provider's "baseline renewable percentage" (BRP).
Current law defines BRP as the average of an electric provider's REP for 2001, 2002,
and 2003.
With certain exceptions, current law does the following: 1) in 2010, requires an
electric provider to increase its REP at least 2 percentage points above its BRP; 2)
in 2011 to 2014, prohibits an electric provider from decreasing its REP below the
percentage required in 2010; 3) in 2015, requires an electric provider to increase its
REP at least 6 percentage points above its BRP; and 4) in each year after 2015,
prohibits an electric provider from decreasing its REP below the percentage required
in 2015.
The bill changes the foregoing deadlines as follows: 1) in 2013, rather than in
2015, an electric provider must increase its REP at least 6 percentage points above
its BRP; 2) in 2014 to 2019, an electric provider may not decrease its REP below the
percentage required in 2013; 3) in 2020, an electric provider must increase its REP
at least 16 percentage points above its BRP; 4) in 2021 to 2024, an electric provider
may not decrease its REP below the percentage required in 2020; 5) in 2025, an
electric provider must increase its REP at least 21 percentage points above its BRP;
and 6) in each year after 2025, an electric provider may not decrease its REP below
the percentage required in 2025.
In addition, the bill imposes requirements for an electric provider's "in-state
percentage" (ISP), which is defined as the percentage of an electric provider's REP
that is derived from in-state renewable resources. In 2020, an electric provider's ISP
may not be less than 30 percent of the electric provider's REP; and in 2021 to 2024,
an electric provider's ISP may not be less than that required in 2020. In 2025, an
electric provider's ISP may not be less than 40 percent of the electric provider's REP;
and in each year after 2025, an electric provider's ISP may not be less than that
required in 2025.
REPs and RRCs. Current law allows an electric provider to create RRCs
based on the amount by which the electric provider exceeds an REP required for a
particular year. An electric provider may sell an RRC to another electric provider,
and the purchaser may use the RRC to comply with an RPS deadline. Alternatively,
an electric provider may save the RRC for its own future use. Saving an RRC in such
a manner is referred to as "banking" an RRC. In general, banked RRCs expire after
the fourth year after the year in which they are created, except that RRCs created
before 2005 expire at the end of 2011. Current law requires the PSC to promulgate
rules for administering RRCs and participating in a regional system for tracking and
trading RRCs.
The bill creates new requirements for RRCs that replace the requirements
described above. The bill specifies that one RRC is created at the time that a person
generates one megawatt (MW) hour of renewable energy, and allows a person to sell
renewable energy with associated RRCs, or separate RRCs from renewable energy
and sell, trade, transfer, assign, bank, or permanently retire the RRCs. However, for
renewable energy that is sold at wholesale, the bill specifies that the sale includes
the associated RRCs unless an agreement between the parties specifies otherwise.
In addition, the bill provides that RRCs associated with renewable energy produced
at certain hydroelectric plants must be used in the year in which the RRCs are
created and may not be banked, sold, or traded.
Because RRCs are created at the time renewable energy is generated, rather
than as the result of an electric provider exceeding an REP for a particular year, the
bill eliminates renewable energy sold in a year from the numerator used to determine
an electric provider's REP. As result, in general, the numerator consists of RRCs that
an electric provider elects to use in a particular year. However, the bill requires the
PSC to promulgate rules that allow an electric generator also to include in the
numerator any renewable energy generated or purchased by the electric provider
from which RRCs have not been separated. In addition, as noted below, an electric
provider may also include in the numerator certain types of nonelectric energy.
Under the bill, if a person purchases renewable energy from which RRCs have
not been separated, the purchaser has the same options with respect to the RRCs as
the generator of the renewable energy. Also, a person who purchases RRCs has the
same options with respect to the RRCs as the person who separated the RRCs from
the renewable energy. An electric provider may use an RRC that it obtains to comply
with an RPS deadline, except for RRCs that have been used to comply with the
renewable energy requirements of another state. The bill also requires the PSC to
promulgate rules for creating, selling, trading, transferring, assigning, banking, and
retiring RRCs and tracking RRCs under a regional credit tracking system
designated by the PSC.
Nonelectric energy. The bill allows an electric provider to include in the
numerator of its REP the following types of nonelectric energy to comply with an RPS
deadline: 1) the thermal output from cogeneration production plants, certain
biomass-fueled boilers, geothermal systems, or solar water heating systems; 2)
biogas that is put into a natural gas transmission or distribution pipeline; 3) useable
light delivered by a solar light pipe; and 4) other nonelectric energy derived from a
renewable resource specified by the PSC by rule. The bill allows an electric provider
to use nonelectric energy for an RPS deadline only if the energy is generated at an
in-state facility that is placed in service after the effective date of the bill and the
energy displaces the use of fossil fuel in this state. In addition, nonelectric energy
may be used for an RPS deadline only in the year in which the energy is generated.
Also, an electric provider may not create an RRC based on nonelectric energy.
Instead, the bill allows any person, including a person that is not an electric provider,
to create a certificate documenting the nonelectric energy generated by the person,
and the bill allows for the sale of certificates to electric providers to comply with RPS
deadlines. The PSC must promulgate rules implementing the nonelectric energy
provisions of the bill, including rules for determining the MW hour equivalent of
nonelectric energy.
Hydroelectric energy. Under current law, an electric provider may not use
electricity generated from hydroelectric facilities to satisfy an RPS deadline if the
facility has a generating capacity of 60 MWs or more. The bill creates an exception
to the foregoing prohibition for electricity generated after December 31, 2013, by
out-of-state facilities that are placed in service on or after the bill's effective date.
However, if such an out-of-state facility is located in the Province of Manitoba, the
electricity may be used to satisfy an RPS deadline only if both of the following
requirements are satisfied: 1) the Province of Manitoba informs the PSC in writing
that final licenses have replaced interim licenses for two specified hydroelectric
projects in the province and the projects have received all final approvals, licenses,
and permits applicable to them under Canadian law; and 2) the PSC determines that
there has been a reasonable resolution of the concerns of the First Nations affected
by the projects. The First Nations is the Canadian equivalent of Native American
tribes.
Wholesale suppliers. The bill allows a wholesale supplier to demonstrate
compliance with an RPS deadline on behalf of its members or customers, individually
or in the aggregate. In addition, the bill eliminates an option under current law for
a wholesale supplier to request the PSC to allow a delay in complying with an RPS
deadline. However, the bill does not affect another option under current law for
wholesale suppliers to obtain such a delay.
PSC reports. Current law requires the PSC to report on whether the state has
met a goal that, by December 31, 2015, 10 percent of all electric energy consumed in
the state is renewable energy. The bill moves the goal to December 31, 2013. In
addition, the bill requires the PSC to report on whether, by December 31, 2020, 20
percent of electric energy consumed in the state is renewable energy and whether 6
percent of electric energy consumed in this state is generated from in-state
renewable energy facilities. Also, the PSC must report on whether, by December 31,
2025, 25 percent of electric energy consumed in the state is renewable energy and
whether 10 percent of electric energy consumed in this state is generated from
in-state renewable energy facilities.
Other changes. The bill makes other changes related to the RPS, including
the following:
1. The bill makes legislative findings regarding the RPS, including findings
regarding the need to adopt an RPS that includes requirements for in-state sources
of renewable energy.
2. The bill prohibits the PSC from imposing additional renewable energy
requirements on a municipal utility that is compliance with the RPS. Under current
law, the prohibition applies to investor-owned, but not municipally owned, utilities.
3. The bill allows an electric provider to use electricity generated by the
combustion of solid waste to satisfy an RPS deadline, but only if the solid waste has
been subject to a process to remove recyclable and noncombustible materials and the
solid waste is burned in a facility owned by a county in this state that was in service
before January 1, 1998.
4. For a facility that burns fossil fuel with any combination of biomass, solid
waste, or refuse-derived fuel, the bill creates a formula for determining the amount
of electricity or thermal energy produced by the facility that an electric provider may
use to comply with an RPS deadline. The formula replaces a formula under current
law that applies to facilities that burn biomass and fossil fuels.
5. Under current law, with certain exceptions, the PSC must consider
alternative locations when the PSC determines whether to grant a certificate of
public convenience and necessity that is required before a person can begin
construction of a proposed electric generating facility with a capacity of 100 MW or
more. Under the bill, if the proposed facility generates electricity from renewable
resources, the PSC may, but is not required to, consider alternative locations. Also,
for a proposed facility that generates electricity from renewable resources that has
a capacity of less than 100 MW, the bill imposes deadlines on the PSC's consideration
of an application for a different certificate that is required for such a facility.
6. The bill requires the PSC, in scheduling its business, to give priority to the
consideration of applications for constructing electric generating facilities of any
capacity that generate electricity from renewable resources.
7. The bill requires the PSC to submit a study to the legislature and governor
on options for ensuring that electric providers are able to comply with the RPS.