State fiscal effect
No state fiscal effect.
Local fiscal effect
No local government costs.
Fund sources affected
PRO.
Affected Chapter
20 Appropriations
20.155 (g)
Assumptions used in arriving at fiscal estimate
State Fiscal Effects
There are no estimated state fiscal effects from the proposed changes to the Renewable Resource Credit Trading Program rule (PSC 118).
The proposed changes to PSC 118 mainly implement changes to state statute enacted under
2009 Wisconsin Act 406. The proposed rule revises the definition of a renewable resource credit to allow electric providers to use additional credits to meet minimum renewable percentage requirements under 196.378 (2) (a). The proposed rule allows electric providers to create renewable resource credits from the electric providers' use and/or their customers' or members' use of solar energy, geothermal energy, biomass, biogas, synthetic gas created by the plasma gasification of waste, densified fuel pellets, and fuel produced by pyrolysis of organic or waste material, if these sources displace electricity from conventional energy sources, as per Act 406. The revised rule specifies how these new sources will be certified by the Commission, how credits from these sources will be calculated, and that displacement of conventional energy by these sources could be verified through an audit. Verification of displacement through a potential audit is consistent with the verification processes in existing rule for existing renewable sources.
In addition to revisions relating to Act 406, revisions to PSC 118 allow the Commission to collaborate with other states to purchase, as a group, program administrator services for tracking renewable resource credits. The proposed rule provides the Commission the option to either contract for a program administrator through a standard competitive procurement, or to access program administration services through participation in a regional renewable energy tracking system group, such as Midwest Renewable Energy Tracking System, Inc. Additional revisions to PSC 118 clarify existing code language where ambiguity or unintended consequences in the original language have been identified.
The revised rule is not anticipated to have a state fiscal effect because revisions to PSC 118 are not anticipated to change state staff workload or program administrator costs. State staff workload does not change due to the revised rule because the rule does not add program requirements above those established under Act 406. Program administrator costs are not anticipated to change because the new option of accessing program administration services through participation in a regional group is not anticipated to decrease program costs. The complexity needed in a contract to administer either a statewide renewable resource credit trading program or a regional program is unlikely to reduce any one state's share of administration costs under a group. The rule also allows the Commission to procure for administrative services through a competitive procurement; so if costs for administrative services under the group are more costly than those anticipated through a standard procurement, the Commission has the option to use the standard procurement and avoid additional costs. Therefore, the revised rule is not anticipated to have a state fiscal effect.
Local Fiscal Effects
There are no estimated local fiscal effects from the proposed changes to PSC 118. Local governments can be electric providers and are subject to the rule, but the rule does not establish new requirements; it only provides direction to operators on how to comply with current state statutes. Therefore, the revised rule is not estimated to have a local fiscal effect.
Fiscal Effect for Electric Providers and Small Businesses
There is no estimated fiscal effect for electric providers. Electric providers are already subject to the state statutes the proposed rule implements. The rule does not add requirements; it only provides direction to operators on how to comply with current state statutes. Small Businesses are also unlikely to experience a fiscal effect under this rule as it is consistent with state statutes. The rule does not change the opportunities provided under Act 406 for small businesses to sell renewable resource credits to utilities. Therefore, the revised rule is not estimated to have a fiscal effect to electric providers or small businesses.
Long-range fiscal implications
Costs to administer a renewable resource credit trading program could be reduced in the long term, under this rule, because it includes an option allowing the Commission to contract for administrative services through a regional renewable resource credit trading program group. If the regional group can implement a regional renewable resource credit trading program that is more streamlined than the current Wisconsin system, and if the Commission can pool its contracting resources with other states in the group, then it is possible that, by contracting through the group for a more streamlined program, administrative service costs will decrease.
Text of Proposed Rule
SECTION 1. PSC 118.02 (1) is renumbered 118.02 (1r) and amended to read:
PSC 118.02 (1r) “Certified renewable facility" means an electric generating facility that the commission certifies
has met the definition of a renewable facility under s. PSC 118.05.
SECTION 2. PSC 118.02 (1) and (1g) are created to read:
118.02 (1) “Biogas" means a gas created by the anaerobic digestion or fermentation of biomass, food processing waste or discarded food.
(1g) “Certified non-electric facility" means a non-electric facility that the commission certifies under s.
PSC 118.055.
SECTION 3. PSC 118.02 (2) is amended to read:
PSC 118.02 (2) “Compliance period" means a calendar year, beginning January 1, during which an electric provider is required to deliver achieve a renewable energy percentage under
SECTION 4. PSC 118.02 (3m) is created to read:
PSC 118.02 (3m) “Densified fuel pellets" means pellets made from waste material that does not include garbage, as defined in s.
289.01 (9), Stats., and that contains no more than 30 percent fixed carbon.
SECTION 5. PSC 118.02 (4) is amended to read:
PSC 118.02 (4) “Designated representative" means the person authorized by the electric provider to register a renewable facility or non-electric facility with the program administrator, or to purchase or sell RRCs.
SECTION 6. PSC 118.02 (5), (5g) and (5r) are created to read:
PSC 118.02 (5) “Displaced conventional electricity" means electricity derived from conventional resources that an electric provider or a customer or member of the electric provider would have used except that the person used instead a certified non-electric facility that meets the requirements of ss.
PSC 118.03 and
118.04.
(5g) “Division administrator" means the administrator of the commission's gas and energy division.
(5r) “Geothermal heating and cooling installation" means a ground source heat pump.
SECTION 7. PSC 118.02 (6) is amended to read:
PSC 118.02 (6) “MWh" means megawatt-hour of electricity.
SECTION 8. PSC 118.02 (6m) and (7m) are created to read:
PSC 118.02 (6m) “Non-electric facility" means any of the following when used by an electric provider or by a customer or member of the electric provider:
(a) A solar water heater.
(b) A solar light pipe.
(c) A geothermal heating and cooling installation.
(d) An installation generating thermal output from biomass, biogas, synthetic gas, densified fuel pellets, or fuel produced by pyrolysis.
(e) Any other installation specified by the commission.
(7m) “Pyrolysis" means an industrial process that heats organic or waste material under pressure in an oxygen-starved environment to break the material down into gases, liquid and solid residues.
SECTION 9. PSC 118.02 (10) is renumbered 118.02 (10) (intro.), and amended to read:
PSC 118.02 (10) (intro.) “Renewable resource credit" means one MWh of renewable energy from a certified renewable facility that is physically metered with the net generation measured at the certified renewable facility's bus bar, that is delivered to a retail customer with the retail sale measured at the customer's meter, that ignores the transmission and distribution losses between the bus bar and the customer's meter, that exceeds the minimum percentage requirement specified in s. 196.378 (2) (a), Stats., and that meets the requirements of ss. PSC 118.03 and 118.04. either of the following:
SECTION 10. PSC 118.02 (10) (a) and (b) are created to read:
PSC 118.02 (10) (a) One MWh of renewable energy from a certified renewable facility that meets each of the following requirements:
1. It is physically metered with the net generation measured at the certified renewable facility's bus bar.
2. It is delivered to a retail customer with the retail sale measured at the customer's meter.
3. It ignores the transmission and distribution losses between the bus bar and the customer's meter.
4. It exceeds the minimum percentage requirement specified in s.
196.378 (2) (a), Stats.
(b) One MWh of displaced conventional electricity, as calculated under s.
PSC 118.09.
SECTION 11. PSC 118.02 (14) to (16) are created to read:
PSC 118.02 (14) “Solar light pipe" means a device that concentrates and transmits sunlight through a roof to an interior space, employing highly-reflective material inside the device to focus and direct the maximum available sunlight to the interior space.
(15) “Solar water heater" means a device that concentrates and collects solar radiation to heat water for domestic use, pool heating, space heating, or ventilation air heating.
(16) “Synthetic gas" means gas created by the plasma gasification of waste.
SECTION 12. PSC 118.025 is created to read:
PSC 118.025 Renewable resource designation. Biogas is a renewable resource under s.
196.378 (1) (h) 2., Stats.
SECTION 13. PSC 118.03 (1) (intro.) and (a) are amended to read:
PSC 118.03 (1) (intro.) An electric provider may create an RRC for renewable energy only if the renewable facility that is the source of the electric provider's renewable energy meets all of the following requirements:
(a) The energy output of the renewable faility is physically metered and the accuracy of the metering is subject to verification by the program administrator or the commission.
SECTION 14. PSC 118.03 (2) is created to read:
PSC 118.03 (2) An electric provider may create an RRC for conventional electricity displaced by the use of a non-electric facility only if the non-electric facility meets all of the following requirements:
(a) The non-electric facility registers with, and is certified by, the commission under s.
PSC 118.055.
(b) The non-electric facility was placed in service on or after June 3, 2010.
(c) The non-electric facility will replace or reduce the use of an electric device used at the same location for the same purpose as the non-electric facility.
(d) Any other condition established by the commission.
SECTION 15. PSC 118.03 (3) (b) is renumbered PSC 118.03 (3) and is amended to read:
PSC 118.03 (3) An electric provider may only use the renewable portion of a biomass co-fired facility's energy production the production from a facility using both a renewable and conventional fuel, based on the relative energy content of the fuels, to create RRCs in the applicable reporting period.
SECTION 16. PSC 118.03 (4) is created to read:
PSC 118.03 (4) (a) An electric provider may create RRCs for a facility that has contracted with a producer of biogas, gas from pyrolysis, or synthetic gas for ownership of the gas and that has sufficient contracts to deliver the gas to the facility, according to the resulting number of MWh that the facility generates or the amount of conventional electricity that the facility displaces.
(b) An electric provider may create an RRC for a facility that satisfies par. (a) if the electric provider demonstrates all of the following:
1. The gas producer meters the amount of gas delivered, using metering devices that comply with ss.
PSC 134.27 and
134.28.
2. The gas producer measures the heat content of the gas at least monthly.
3. The facility complies with sub. (1) or (2).
SECTION 17. PSC 118.04 (1) is created to read:
PSC 118.04 (1) For purposes of determining how long an RRC is eligible to be used to meet an electric provider's minimum percentage requirement under s.
196.378 (2) (a), Stats.:
(a) An RRC under s.
PSC 118.02 (10) (a) is created when the renewable facility generates the renewable energy.
(b) An RRC under s.
PSC 118.02 (10) (b) is created on December 31 of the year in which the use of the certified non-electric facility displaces conventional electricity.
(c) An RRC is used in the compliance period for which it is retired, regardless of the date on which the RRC is retired in the RRC tracking program.
SECTION 18. PSC 118.04 (2) (e) and (g) 2. are amended to read:
PSC 118.04 (2) (e) Renewable energy
or displaced conventional electricity that would meet the definition of an RRC under s.
PSC 118.02 (10), except that it consists of less than one MWh, shall constitute a fraction of an RRC. A fractional RRC may not be smaller than 0.01 MWh.
(g) 2.
An RRC created Renewable energy generated on or after January 1, 2004, but produced by a renewable facility that was placed into service before January 1, 2004, may only be
sold or used to meet an electric provider's minimum percentage requirement under s. 196.378 (2) (a), Stats., if the RRC used to create an RRC if the renewable energy constituted an incremental increase in output from the renewable facility due to capacity improvements that were made on or after January 1, 2004, as provided in s.
196.378 (3) (a) 2., Stats. The RRCs described in this subdivision may not be used after the fourth year after the year in which the credit is created, as provided in s.
196.378 (3) (c), Stats.
If the renewable facility was originally constructed prior to January 1, 2004, but is entirely replaced with a new and more efficient facility, all of the output from the new facility constitutes an incremental increase and can be used to create RRCs.
EXAMPLE: If the renewable facility was originally constructed prior to January 1, 2004, but is entirely replaced with a new and more efficient facility, all of the output from the new facility constitutes an incremental increase and can be used to create RRCs.
