2013 - 2014 LEGISLATURE
March 10, 2014 - Introduced by Senators Miller,
Risser and Erpenbach,
cosponsored by Representatives
Shankland, Mason, Clark, Hesselbein,
Sargent, Hulsey, Kolste, C. Taylor, Goyke, Ohnstad, Hebl, Berceau and
Jorgensen. Referred to Energy, Consumer Protection, and Government
Reform.
SB660,2,2
1An Act to repeal 196.378 (2) (a) 2. f.;
to renumber and amend 196.378 (2) (bm)
2and 196.378 (3) (a) 1.;
to amend 196.025 (1) (c) 1., 196.378 (1) (h) 1. g., 196.378
3(1) (i), 196.378 (2) (a) 2. d., 196.378 (2) (a) 2. e., 196.378 (2) (b) (intro.), 196.378
4(2) (b) 5., 196.378 (2) (c), 196.378 (2) (d) (intro.), 196.378 (2) (e) (intro.), 196.378
5(2) (f) (intro.), 196.378 (2) (g) 2., 196.378 (3) (a) 1m., 196.378 (3) (b), 196.378 (3)
6(c), 196.378 (4m) (a), 196.491 (title), 196.491 (6) and 196.496 (1); and
to create
7196.378 (1) (ai), 196.378 (1) (ak), 196.378 (1) (df), 196.378 (1) (dh), 196.378 (2)
8(a) 2. g., h., i. and j., 196.378 (2) (am), 196.378 (2) (b) 1t., 196.378 (2) (bm) 2.,
9196.378 (3) (a) 1b., 196.378 (3) (a) 1f., 196.378 (3) (a) 1g., 196.379 and 196.491
10(7) of the statutes;
relating to: renewable portfolio standards and credits;
11electricity derived from biofuels; electric utility purchases of renewable energy
1and customer-generated electricity; distributed generation rules; granting
2rule-making authority; and requiring the exercise of rule-making authority.
Analysis by the Legislative Reference Bureau
This bill does all of the following: 1) makes changes to renewable portfolio
standards that apply to electric providers; 2) imposes biofuel requirements on
electric providers; 3) requires electric utilities to make certain purchases of
renewable energy; and 4) imposes duties on the the Public Service Commission (PSC)
regarding distributed generation facilities.
Renewable portfolio standards. Current law generally requires electric
utilities and retail electric cooperatives (electric providers) to ensure that, in a given
year, a specified percentage of the electricity that the electric provider sells to
customers or members is renewable energy. These requirements are commonly
referred to as renewable portfolio standards (RPSs), and they include deadlines that
apply to an electric provider's renewable energy percentage (REP). An electric
provider's REP for a particular year is the percentage that results from dividing the
electric provider's renewable resource credits (RRCs) by the total electricity sold by
the electric provider in that year. There are two types of RRCs. The first type is based
on electricity derived from renewable energy. An electric provider creates one RRC
of that type for each megawatt hour of electricity derived from renewable energy that
the electric provider sells to customers or members. The second type is based on
specified energy-related uses that displace the use of nonrenewable energy. Electric
providers, as well as their customers and members, may create the second type of
RRC, pursuant to rules promulgated by the PSC. Electric providers may use RRCs
that they create, or purchase RRCs created by others, to comply with an REP for a
particular year.
Regarding the first type of RRC described above, the bill allows an electric
provider to create two RRCs, instead of one RRC, for each megawatt hour of
electricity that meets specified requirements. First, the electricity must be
generated by either: 1) a facility that generates electricity and thermal energy used
for industrial, commercial, heating, or cooling purposes; or 2) a facility that generates
electricity from direct radiant energy received from the sun. Second, the electric
generating facility must commence operation prior to January 1, 2020. Third, if the
electricity is purchased by an electric utility, the purchase must satisfy certain
requirements. Fourth, the electric generating facility must be located in this state.
Regarding the second type of RRC described above, the bill makes changes to the
solar energy-related uses that are eligible to create RRCs, including defining
integrated light pipe technology that is eligible to create RRCs.
The bill also makes changes to REPs. For the year 2009, current law prohibited
an electric provider from decreasing its REP below its baseline renewable percentage
(BRP), which is defined as the average of the electric provider's REP for 2001, 2002,
and 2003. For the year 2010, current law required an electric provider to increase
its REP at least two percentage points above its BRP. For the years 2011 to 2014,
current law prohibits an electric provider from decreasing its REP below the
percentage required in 2010. For the year 2015, unless an exception applies, current
law requires an electric provider to increase its REP at least six percentage points
above its BRP, and for each year thereafter, current law prohibits an electric provider
from decreasing its REP below the percentage required in 2015. The exception
applies to an electric provider whose BPR exceeds 12 percent and whose REP for the
year 2014 exceeds 14 percent. An electric provider who qualifies for the exception
must maintain its REP in the years 2015 and thereafter at a level that is at least two
percentage points above its BRP.
This bill eliminates the exception that applies in the years 2015 and thereafter.
For the year 2015, the bill requires an electric provider to increase its REP at least
six percentage points above its BRP, and for the years 2016 to 2019, prohibits an
electric provider from decreasing its REP below the percentage required for the year
2015. For the year 2020, the bill requires an electric provider to increase its REP at
least sixteen percentage points above its BPR, and for the years 2021 to 2029,
prohibits an electric provider from decreasing its REP below the percentage required
for the year 2020. For the year 2030, the bill requires an electric provider to increase
its REP at least twenty-six percentage points above its BRP, and for each year
thereafter, the bill prohibits an electric provider from decreasing its REP below the
percentage required for 2030.
The bill also limits an electric provider's use of electricity derived from
hydroelectric power to satisfy an REP required in the year 2020 and thereafter. For
the years 2020 to 2029, an electric utility may count such electricity for not more than
25 percent of its REP. For the year 2030 and thereafter, an electric utility may count
such electricity for not more than 20 percent of its REP.
Biofuels. The bill also requires an electric provider to ensure that a specified
percentage of the electricity sold to retail customers or members (retail electricity)
is derived from "biofuels," which the bill defines as, with certain exceptions, fuels
produced by the anaerobic fermentation of material derived from living organisms.
For the years 2020 to 2029, the bill requires an electric provider to ensure that not
less than 0.3 percent of its retail electricity is derived from biofuels. For year 2030
and each year thereafter, not less than 0.5 percent must be derived from biofuels.
Under the bill, biofuel-derived retail electricity may be used to comply with either
the foregoing percentages or an REP described above. However, any biofuel-derived
retail electricity that is used to comply with the foregoing percentages may not be
used also to comply with an REP. The bill also establishes a goal that, by December
31, 2030, 0.5 percent of all electric energy consumed in the state is renewable energy
derived from biofuels. No later than June 1, 2031, the PSC must submit a report to
the legislature stating whether the state has met that goal and, biennially thereafter,
must submit reports until the goal is achieved.
Electric utility purchases of renewable energy. With certain exceptions,
this bill requires the PSC to issue an order directed at each retail electric utility that
requires the utility to offer to purchase the renewable energy generated at renewable
facilities within the utility's service territory that are constructed after the effective
date of the PSC's order. The bill defines "renewable facility" as an electric generating
facility that derives energy from: 1) photovoltaic energy; 2) wind power; 3) gas made
from renewable resources; or 4) any other renewable resource specified by rule by the
PSC. In addition, to qualify as a "renewable facility," the facility must be a
small-scale facility, as defined by rule by the PSC. The PSC's orders must specify
standard purchase terms for each type of renewable facility, including terms for
prices paid for renewable energy, payment schedules, and maximum limits on
generating capacity. In specifying terms for renewable energy prices, the PSC must
consider production costs, reasonable rates of return on investment, and state and
federal incentives available to facility owners and operators. The PSC's orders may
also include other conditions, including the following: 1) requirements for adjusting
the standard purchase terms based on changes in operating costs; and 2) different
prices for renewable energy generated at renewable facilities of the same type that
have different generating capacities. The PSC's orders must also prescribe for each
type of renewable facility a standardized agreement incorporating the applicable
terms and conditions.
The bill allows the PSC to limit a requirement of a utility to purchase renewable
energy under an order described above. The PSC may base a limit on the number
of renewable facilities, the total installed generating capacity of renewable facilities,
or the total amount of renewable energy that must be purchased. However, a limit
must be consistent with the purpose of the bill's requirements regarding the orders,
which the bill specifies is to maximize the development and deployment of
distributed renewable energy generation technologies used at renewable facilities
without unreasonable impacts on rates.
The bill also allows the PSC to exempt small and large retail electric utilities
from certain of the above requirements. Under the bill, a small utility is one that had
retail electric sales of less than 2,500,000 megawatt hours in 2013, and a large utility
is one that had retail electric sales of 2,500,000 megawatt hours or more in 2013. For
a small or large utility, the PSC may exempt the utility from the requirement to
purchase renewable energy from particular types of renewable facilities. For a large
utility, the PSC may exempt the utility from all of the above requirements. However,
a large utility is not eligible for either of the foregoing exemptions unless the PSC
finds that the utility's voluntary initiatives are consistent with the purpose of the
bill's requirements regarding the orders, as described above.
The bill also does the following: 1) requires the PSC to periodically review its
orders and, as appropriate, revise the standardized agreements prescribed in the
orders; 2) specifies that a utility that purchases renewable energy as directed in an
order acquires the RRCs associated with the renewable energy, unless otherwise
specified by the parties; and 3) allows a utility and owner or operator of a renewable
facility to agree to renewable energy purchases on terms and conditions that differ
from those specified in an order.
The bill also requires an electric utility to purchase electricity generated from
renewable resources by certain customers at specified prices. The duty is limited to
customers whose electric generation capacity does not exceed two megawatts. For
customer-generated electricity that does not exceed the amount of electricity that
the electric utility sells to a customer, the utility must pay a price equal to the retail
electricity price the utility charges the customer. For customer-generated electricity
in excess of that amount, the electric utility must pay prices set by the PSC by order
that reflect certain wholesale prices. Payments must be calculated and made for
each billing cycle, but are subject to adjustment based on annual calculations. The
PSC must issue orders specifying requirements for the purchases, and the orders
must limit annual purchases to an amount not exceeding one percent of annual
electricity sales by all electric utilities.
Distributed generation facilities. Under current law, the PSC must
promulgate rules establishing standards for the connection of distributed generation
facilities to electric distribution facilities. Current law defines "distributed
generation facility" as an electric generating facility that: 1) satisfies certain location
requirements; and 2) has a capacity of no more than 15 megawatts. Under this bill,
an electric generating facility is a distributed generation facility if it satisfies the
location requirements and has a capacity of no more than 20 megawatts. The bill also
requires the PSC to review the service rules and practices of electric utilities to
determine whether they promote the development of distributed generation
facilities, and to report its findings to the legislature. In addition, the PSC must
promulgate rules to prohibit any service rules or practices that do not promote, or
that impede, the development of distributed generation facilities.
For further information see the state 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:
SB660,1
1Section
1. 196.025 (1) (c) 1. of the statutes is amended to read:
SB660,5,82
196.025
(1) (c) 1. In a proceeding in which an investor-owned electric public
3utility is a party, the commission shall not order or otherwise impose any renewable
4resource requirements on the investor-owned electric public utility if the
5commission has fulfilled all of its duties under s. 196.378 and the commission has
6informed the utility under s. 196.378 (2) (c) that, with respect to the most recent
7report submitted under s. 196.378 (2) (c), the utility is in compliance with the
8requirements of s. 196.378 (2) (a) 2.
and (am) 2.
SB660,2
9Section
2. 196.378 (1) (ai) of the statutes is created to read:
SB660,6,210
196.378
(1) (ai) 1. Except as provided in subd. 2., "biofuel" means a fuel
11produced by the anaerobic fermentation of any material derived from any living
1organism, regardless of the degree or nature of processing or modification that the
2material has undergone.
SB660,6,43
2. "Biofuel" does not include a fuel produced by the anaerobic fermentation of
4any of the following:
SB660,6,55
a. Fossil fuels or any material derived from fossil fuels.
SB660,6,66
b. Mixed refuse.
SB660,3
7Section
3. 196.378 (1) (ak) of the statutes is created to read:
SB660,6,98
196.378
(1) (ak) "Biofuel credit" means a renewable resource credit that is
9based on electricity generated from a biofuel.
SB660,4
10Section
4. 196.378 (1) (df) of the statutes is created to read:
SB660,6,1211
196.378
(1) (df) "Hydroelectric renewable resource" means a renewable
12resource specified in par. (h) 1. m.
SB660,5
13Section
5. 196.378 (1) (dh) of the statutes is created to read:
SB660,6,1514
196.378
(1) (dh) "Integrated light pipe technology" means a lighting system
15that combines the following:
SB660,6,1616
1. A light pipe.
SB660,6,1917
2. An electric lighting system with controls that detect ambient light and adjust
18the amount of light produced by the system to maintain a preset level of lighting in
19an occupied space.
SB660,6
20Section
6. 196.378 (1) (h) 1. g. of the statutes is amended to read:
SB660,6,2121
196.378
(1) (h) 1. g. Biomass
or biofuel.
SB660,7
22Section
7. 196.378 (1) (i) of the statutes is amended to read:
SB660,6,2523
196.378
(1) (i) "Renewable resource credit" means a credit calculated in
24accordance with
sub. (3) (a) 1f. or the rules promulgated under sub. (3) (a)
1. 1d., 1m.,
25and 2.
SB660,8
1Section
8. 196.378 (2) (a) 2. d. of the statutes, as affected by 2013 Wisconsin
2Act .... (Assembly Bill 594), is amended to read:
SB660,7,53
196.378
(2) (a) 2. d.
Except as provided in subd. 2. f., for For the year 2015, each
4electric provider shall increase its renewable energy percentage so that it is at least
56 percentage points above the electric provider's baseline renewable percentage.
SB660,9
6Section
9. 196.378 (2) (a) 2. e. of the statutes, as affected by 2013 Wisconsin
7Act .... (Assembly Bill 594), is amended to read:
SB660,7,118
196.378
(2) (a) 2. e.
Except as provided in subd. 2. f., for each year after 2015 9For the years 2016, 2017, 2018, and 2019, each electric provider may not decrease
10its renewable energy percentage below
the electric provider's renewable energy
11percentage required under subd. 2. d.
SB660,10
12Section
10. 196.378 (2) (a) 2. f. of the statutes, as created by 2013 Wisconsin
13Act .... (Assembly Bill 594), is repealed.
SB660,11
14Section
11. 196.378 (2) (a) 2. g., h., i. and j. of the statutes are created to read:
SB660,7,1715
196.378
(2) (a) 2. g. For the year 2020, each electric provider shall increase its
16renewable energy percentage so that it is at least 16 percentage points above the
17electric provider's baseline renewable percentage.
SB660,7,2018
h. For the years 2021, 2022, 2023, 2024, 2025, 2026, 2027, 2028, and 2029, each
19electric provider may not decrease its renewable energy percentage below the
20electric provider's renewable energy percentage required under subd. 2. g.
SB660,7,2321
i. For the year 2030, each electric provider shall increase its renewable energy
22percentage so that it is at least 26 percentage points above the electric provider's
23baseline renewable percentage.
SB660,8,3
1j. For each year after 2030, each electric provider may not decrease its
2renewable energy percentage below the electric provider's renewable energy
3percentage required under subd. 2. i.
SB660,12
4Section
12. 196.378 (2) (am) of the statutes is created to read:
SB660,8,125
196.378
(2) (am) 1. No later than June 1, 2031, the commission shall prepare
6a report stating whether, by December 31, 2030, the state has met a goal of 0.5
7percent of all electric energy consumed in the state being renewable energy derived
8from biofuels. If the goal has not been achieved, the report shall indicate why the goal
9was not achieved and how it may be achieved, and the commission shall prepare
10similar reports biennially thereafter until the goal is achieved. The commission shall
11submit reports under this subdivision to the governor and the chief clerk of each
12house of the legislature for distribution to the legislature under s. 13.172 (2).
SB660,8,1513
2. Except as provided in pars. (e), (f), and (g), each electric provider shall ensure
14that, of the electricity it sells in a year to retail customers or members, the percentage
15that is derived from biofuels is not less than the following:
SB660,8,1716
a. For the years 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2027, 2028, and 2029,
170.3 percent.
SB660,8,1818
b. For the year 2030 and each year thereafter, 0.5 percent.
SB660,13
19Section
13. 196.378 (2) (b) (intro.) of the statutes is amended to read:
SB660,8,2120
196.378
(2) (b) (intro.) For purposes of determining compliance with
par. (a) 21pars. (a) 2. and (am) 2.:
SB660,14
22Section
14. 196.378 (2) (b) 1t. of the statutes is created to read:
SB660,8,2323
196.378
(2) (b) 1t. Notwithstanding subds. 1m. and 1o.:
SB660,9,3
1a. An electric provider may not, in a year, count electricity derived from
2hydroelectric renewable resources for more than 25 percent of the renewable energy
3percentage required under par. (a) 2. g. or h.
SB660,9,64
b. An electric provider may not, in a year, count electricity derived from
5hydroelectric renewable resources for more than 20 percent of the renewable energy
6percentage required under par. (a) 2. i. or j.
SB660,15
7Section
15. 196.378 (2) (b) 5. of the statutes is amended to read:
SB660,9,138
196.378
(2) (b) 5. An electric provider that purchases renewable energy from
9a renewable energy supplier may use an allocated share of the renewable energy sold
10by the renewable energy supplier to comply with a requirement under par. (a) 2.
or
11(am) 2. or to create a credit under sub. (3) (a), provided that the cost of the renewable
12energy is included in the price the electric provider paid the renewable energy
13supplier.
SB660,16
14Section
16. 196.378 (2) (bm) of the statutes is renumbered 196.378 (2) (bm)
151. and amended to read:
SB660,9,2116
196.378
(2) (bm) 1. Each electric provider shall annually retire renewable
17resource credits sufficient to satisfy the electric provider's renewable energy
18percentage required under par. (a) 2.
An electric provider may retire biofuel credits
19under this subdivision, except that an electric provider may not include biofuel
20credits it retires under subd. 2. in the renewable resource credits it retires under this
21subdivision.
SB660,17
22Section
17. 196.378 (2) (bm) 2. of the statutes is created to read:
SB660,9,2423
196.378
(2) (bm) 2. Each electric provider shall annually retire biofuel credits
24sufficient to satisfy the electric provider's obligation under par. (am) 2.
SB660,18
25Section
18. 196.378 (2) (c) of the statutes is amended to read:
SB660,10,15
1196.378
(2) (c) No later than April 15 annually, or another annual date specified
2by the commission by rule, an electric provider shall submit a report to the
3commission that identifies the electric provider's renewable energy percentage for
4the previous year and describes the electric provider's compliance with
par. (a) 2. 5pars. (a) 2. and (am) 2. and the electric provider's implementation plans for future
6compliance. Reports under this paragraph may include certifications from
7renewable energy suppliers regarding the sources and amounts of renewable energy
8supplied to the electric provider. The commission may specify the documentation
9that is required to be included with reports submitted under this paragraph. The
10commission may require that electric providers submit the reports in a proceeding,
11initiated by the commission under this section relating to the implementation of s.
121.12, or in a proceeding for preparing a strategic energy assessment under s. 196.491
13(2). No later than 90 days after the commission's receipt of an electric provider's
14report, the commission shall inform the electric provider whether the electric
15provider is in compliance with
par. (a) 2. pars. (a) 2. and (am) 2.
SB660,19
16Section
19. 196.378 (2) (d) (intro.) of the statutes is amended to read:
SB660,10,2117
196.378
(2) (d) (intro.) The commission shall allow an electric utility to recover
18from ratepayers the cost of providing total renewable energy to its retail customers
19in amounts that equal or exceed the percentages specified in
par. (a). pars. (a) 2. and
20(am) 2. Subject to any approval of the commission that is necessary, an electric utility
21may recover costs under this paragraph by any of the following methods:
SB660,20
22Section
20. 196.378 (2) (e) (intro.) of the statutes is amended to read:
SB660,11,423
196.378
(2) (e) (intro.) An electric provider, or a wholesale supplier for its
24members, may request that the commission grant a delay for complying with a
25deadline specified in par. (a) 2.
or (am) 2. The commission shall hold a hearing on
1the request and, if requested by the electric provider or wholesale supplier, treat the
2matter as a contested case. The commission shall grant a delay if the commission
3determines that the applicant has demonstrated good faith efforts to comply with the
4deadline and that any of the following applies:
SB660,21
5Section
21. 196.378 (2) (f) (intro.) of the statutes is amended to read:
SB660,11,146
196.378
(2) (f) (intro.) A wholesale electric cooperative for its members or a
7municipal electric company for its members may delay compliance with a deadline
8specified in par. (a) 2.
or (am) 2. for any reason specified in par. (e) 1. to 4. A wholesale
9electric cooperative or a municipal electric company that delays compliance with a
10deadline specified in par. (a) 2.
or (am) 2. shall inform the commission of the delay
11and the reason for the delay, and shall submit information to the commission
12demonstrating that, notwithstanding good faith efforts by the wholesale electric
13cooperative or municipal electric company and its members, the members cannot
14meet the deadline for the stated reason.
SB660,22
15Section
22. 196.378 (2) (g) 2. of the statutes is amended to read:
SB660,11,2316
196.378
(2) (g) 2. An energy consumer advocacy group may request that the
17commission grant to an electric provider that serves one or more members of the
18group a delay for complying with a deadline specified in par. (a) 2.
or (am) 2. The
19commission shall hold a hearing on the request and, if requested by the energy
20consumer advocacy group, treat the matter as a contested case. The commission
21shall grant a delay if the commission determines that the utility has demonstrated
22good faith efforts to comply with the deadline and that any of the conditions in par.
23(e) 1. to 4. apply.
SB660,23
24Section
23. 196.378 (3) (a) 1. of the statutes is renumbered 196.378 (3) (a) 1d.
25and amended to read:
SB660,12,16
1196.378
(3) (a) 1d.
Each
Except as provided in subd. 1f., each megawatt hour
2of an electric provider's total renewable energy creates one renewable resource credit
3for the electric provider. Subject to subd. 2., an electric provider that exceeds its
4renewable energy percentage required under sub. (2) (a) 2. may, in the applicable
5year, bank any excess renewable resource credits or any portion of any excess
6renewable resource credit for use in a subsequent year or sell any excess renewable
7resource credits or any portion of any excess renewable resource credit to any other
8electric provider at any negotiated price. An electric provider that creates or
9purchases a renewable resource credit or portion may use the credit or portion, as
10provided under par. (c), to establish compliance with sub. (2) (a) 2.
or (am) 2. The
11commission shall promulgate rules that establish requirements for the creation and
12use of a renewable resource credit created on or after January 1, 2004, including
13calculating the amount of a renewable resource credit, and for the tracking of
14renewable resource credits by a regional renewable resource credit tracking system.
15The rules shall specify the manner for aggregating or allocating credits under this
16subdivision or sub. (2) (b) 4. or 5.
SB660,24
17Section
24. 196.378 (3) (a) 1b. of the statutes is created to read: