Rule-Making Notices (Hearing Notices)

2.   Senate Bill 559, Securing America's Future with Energy and Sustainable Technologies Act. Senator Amy Klobuchar (MN) introduced this bill on March 10, 2011. The bill was then referred to Senate committee where it was read twice and referred to the Committee on Finance.

There are no known federal regulations governing the creation of renewable resource credits or their equivalent.

Comparison with similar rules in surrounding states

Illinois

Under Ill. Stat. ch. 220 § 5/16-107.5 (net metering), a retail customer that owns or operates a solar, wind, or other eligible renewable electrical generating facility with a rated capacity of not more than 2,000 kilowatts that is located on the customer's premises and is intended primarily to offset the customer's own electrical requirements is treated as owning and having title to the renewable energy attributes, renewable energy credits (RECs), and greenhouse gas emission credits related to any electricity produced by the qualified generating unit.

Iowa

Iowa state law does not address ownership of RECs for net-metering customers.

Michigan

A customer or member of an electric provider may generate or own a REC, providing that the facility is certified through the Michigan Renewable Energy Certification System (MIRECS). MIRECS is a tracking system similar to Midwest Renewable Energy Tracking System, more commonly known as M-RETS. The Michigan Public Service Commission has also identified a REC aggregator who will aggregate like renewable energy that may then be purchased from retail customers or members.

Minnesota

Ownership of RECs where ownership is not addressed in power purchase agreements is not established under Minnesota Public Utility Commission rules or order; instead utilities must pursue negotiations and settlements with the owners of generation units.

Effect on small business

This rulemaking is expected to have no or minimal financial impact. All electric providers, customers or members of an electric provider, and renewable energy developers seeking to create renewable resource credits will be favorably impacted by this change, offering greater opportunities to create renewable resource credits. There is no anticipated impact on utility ratepayers.

Initial Regulatory Flexibility Analysis

This rule will not affect small businesses. The s. 227.114 (12), Stats., definition of “small business" states that to be considered a small business, the business must not be dominant in its field. Since electric utilities are monopolies in their service territories, they are dominant in their fields and, so, are not small businesses.

Fiscal Estimate

An Economic Impact Analysis is attached.

Contact Person

Questions regarding this matter should be directed to Preston Schutt, Docket Coordinator, at [phone] or [e-mail]. Small business questions may be directed to Anne Vandervort at [phone] or [e-mail]. Media questions should be directed to Matthew Pagel, Communications & Policy Liaison, at [phone]. Hearing- or speech-impaired individuals may also use the commission's TTY number: if calling from Wisconsin, [phone]; if calling from outside Wisconsin, [phone].

The commission does not discriminate on the basis of disability in the provision of programs, services, or employment. Any person with a disability who needs accommodations to participate in this proceeding, or who needs to get this document in a different format, should contact the Docket Coordinator as indicated in the previous paragraph as soon as possible.

Text of the Rule

SECTION 1. PSC 118.01 (1) is amended to read:

PSC 118.01 (1) This chapter applies to each Wisconsin electric provider that is subject to s. 196.378 (2) (a), Stats., and to any member or customer of an electric provider.

SECTION 2. PSC 118.02 (1m) is amended to read:

PSC 118.02 (1m) “Certified non-electric displacement facility " means a non-electric displacement facility that the commission certifies under s. PSC 118.055.

SECTION 3. PSC 118.02 (5) is amended 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 displacement facility.

SECTION 4. PSC 118.02 (6g) (intro.) is renumbered 118.02 (5m) (intro.) and amended to read:

PSC 118.02 (5m) (intro.) "Non-electric Displacement facility" means any of the following when used by an electric provider, or by a customer or member of the electric provider:

SECTION 5. PSC 118.03 (2) (intro.) is amended to read:

PSC 118.03 (2) (intro.) An electric provider or customer or member of an electric provider may create an a RRC for conventional electricity displaced by the use of a non-electric displacement facility only if the non-electric displacement facility meets all of the following requirements:

SECTION 6. PSC 118.03 (2) (c) is amended to read:

PSC 118.03 (2) (c) Will replace or reduce the use of an electric device or electric service used for the same purpose at the same location as the non-electric displacement facility.

SECTION 7. PSC 118.03 (3) is renumbered 118.03 (3) (a) and amended to read:

PSC 118.03 (3) (a) An electric provider may only use the renewable portion of the production from a facility using both a renewable and conventional fuel, based on the relative energy content of the fuels, to meet a minimum percentage requirement under s. 196.378 (2) (a), Stats., or to create RRCs.

SECTION 8. PSC 118.03 (3) (b) is created to read:

PSC 118.03 (3) (b) An electric provider or customer or member of an electric provider may only use the renewable portion of the production from a facility using both a renewable and conventional fuel, based on the relative energy content of the fuels, to create RRCs.

SECTION 9. PSC 118.03 (5) is created to read:

PSC 118.03 (5) A customer or member of an electric provider may create a RRC in the manner described in sub. (4).

SECTION 10. PSC 118.04 (1m) (c) is amended to read:

PSC 118.04 (1m) (c) An A RRC for displaced conventional electricity is created in the year in which the use of the certified non-electric displacement facility displaces conventional electricity.

SECTION 11. PSC 118.04 (2) (fm) is created to read:

PSC 118.04 (2) (fm) Two or more customers or members of an electric provider may jointly purchase or sell a RRC.

SECTION 12. PSC 118.04 (4) and (5) are amended to read:

PSC 118.04 (4) An electric provider shall annually retire renewable energy certificates and RRCs in the renewable energy tracking system to demonstrate compliance with its minimum percentage requirement under s. 196.378 (2) (a), Stats. When an electric provider uses an a RRC to comply with the minimum percentage requirements of s. 196.378 (2) (a), Stats., the electric provider shall retire the RRC. When an electric provider uses a MWh of total renewable energy to comply with the minimum percentage requirements of s. 196.378 (2) (a), Stats., the program administrator electric provider shall retire the renewable energy certificate representing the MWh of total renewable energy.

(5) Subject to commission approval, if applicable, the program administrator may establish any procedure necessary to accurately record the creation, sale, transfer, purchase and retirement of renewable energy certificates and RRCs.

SECTION 13. PSC 118.055 (title) is amended to read:

PSC 118.055 (title) Certification of non-electric displacement facilities.

SECTION 14. PSC 118.055 (1) and (2) (intro.) to (b) are amended to read:

PSC 118.055 (1) (a) An electric provider or customer or member of an electric provider may create an a RRC under s. PSC 118.03 (2) based on the use of a certified non-electric displacement facility by the electric provider, or by a customer, or member of the electric provider, to the extent that the use displaces conventional electricity. The commission shall certify non-electric facilities displacement facilities or delegate this responsibility to the program administrator. Any electric provider, customer or member of an electric provider, or owner of a non-electric displacement facility adversely affected by the decision to certify or not certify may file a complaint with the commission. The complaint shall be in writing and filed with the commission within 10 working days after service of the decision. The division administrator may settle and resolve a complaint brought under this paragraph. If the complaint cannot be resolved by mutual agreement, the division administrator shall issue a written decision. Any person adversely affected by the division administrator's written decision may, within 20 working days after its issuance, appeal the decision to the commission by alleging facts that show a violation of a particular statute or provision of this chapter.

(b) The commission may permit an electric provider or customer or member of an electric provider to create an a RRC for conventional electricity displaced by use of a non-electric displacement facility before the date the facility is certified, except that the commission may not permit creation of an a RRC for displacement that occurred before June 3, 2010.

(2) (intro.) To obtain certification of a non-electric displacement facility, the electric provider, customer or member of an electric provider, or a designated representative, shall provide the following information to the commission in a format approved by the commission:

(a) The non-electric displacement facility's location, owner, technology, and date placed in service.

(b) Information that demonstrates the non-electric displacement facility meets the eligibility criteria under s. PSC 118.03.

SECTION 15. PSC 118.055 (2) (e) and (f), and (3) to (5) are amended to read:

PSC 118.055 (2) (e) The electric provider's, customer's or member's affirmation that it has verified all of the information in pars. (a) to (d).

(f) If the electric provider applicant does not own the non-electric displacement facility, a statement signed by the facility owner that affirms the information in pars. (a) to (d) and permits the electric provider, customer or member to create RRCs from the facility.

(3) The commission or the program administrator shall inform the electric provider, customer or member, or its designated representative, whether it has certified a non-electric displacement facility for which it has received an application under sub. (2).

(4) The commission may make on-site visits to any certified unit of a non-electric displacement facility to determine its compliance with this chapter and with s. 196.378, Stats., may request copies of all supporting documentation used to comply with this section, and may decertify any unit that it finds not to be in compliance.

(5) Nothing in this chapter obligates the owner of a non-electric displacement facility to permit the electric provider to create RRCs from the facility.

SECTION 16. PSC 118.06 (2) (b) is amended to read:

PSC 118.06 (2) (b) Create an account for each certified renewable facility or certified non-electric displacement facility that participates in the tracking system and requests a separate account.

SECTION 17. PSC 118.06 (2) (c) 1. is amended to read:

PSC 118.06 (2) (c) 1. Its electric provider's tracking system account number.

SECTION 18. PSC 118.06 (2) (cm) (intro.) and 1. are amended to read:

PSC 118.06 (2) (cm) (intro.) Upon request by the commission, register each non-electric displacement facility the commission has certified, including the following data about the facility:

1. Its electric provider's tracking system account number.

SECTION 19. PSC 118.06 (2) (d) 1m. is amended to read:

PSC 118.06 (2) (d) 1m. Issues a unique electronic certificate for each MWh of conventional electricity displaced by a certified non-electric displacement facility that complies with ss. PSC 118.03 and 118.04, as calculated under s. PSC 118.09. The certificate shall identify which non-electric displacement facility displaced the MWh, when the facility operated, and any other characteristics the commission finds necessary.

SECTION 20. PSC 118.06 (2) (em) is amended to read:

PSC 118.06 (2) (em) Audit registered non-electric facilities displacement facilities, as needed, to verify the amount of displaced conventional electricity.

SECTION 21. PSC 118.06 (5) is amended to read:

PSC 118.06 (5) An electric provider may not use renewable energy from a decertified renewable facility to meet the electric provider's minimum percentage requirement under s. 196.378 (2) (a), Stats., that was produced after the facility is decertified. The program administrator may not issue RRCs for energy from a decertified renewable facility that was produced after the facility is decertified. The program administrator may not issue RRCs for conventional electricity displaced by the operation of a decertified non-electric displacement facility which displacement occurred after the facility is decertified.

SECTION 22. PSC 118.08 (3) and (4) are created to read:

PSC 118.08 (3) An electric provider or customer or member of an electric provider may not create RRCs for displaced conventional electricity based on the use of a facility for which RRCs are created under s. 196.378 (3) (a) 1., Stats.

(4) An electric provider or customer or member of an electric provider may not create RRCs for displaced conventional electricity based on hydroelectric energy for which an electric provider is permitted to use the average amount of hydroelectric power generated by the facility under s. 196.378 (2) (b) 1m. a., Stats.

SECTION 23. PSC 118.09 (1) to (7) are amended to read:

PSC 118.09 (1) For each calendar year, the commission shall, by order, determine the percentage of electricity from conventional resources for the entire state for purposes of calculating the amount of an a RRC to be created for displaced conventional electricity. The commission shall base this determination on the annual average mix of resources used to generate electricity in the entire area served by the Midwest Independent Transmission System Operator. The commission may, by order, also establish a different percentage for a specific type of non-electric displacement facility if its seasonal or daily operating characteristics justify a percentage that differs from the annual average percentage.

(2) The commission may, by order, establish a displacement formula for any type of non-electric displacement facility. The commission shall base any such formula on a calculation of the minimum amount of displaced electricity that would be expected in a typical calendar year under realistic operating conditions. The commission shall provide an opportunity for public comment on any such formula before the formula is established.

(3) For each calendar year, the electric provider or the user of, customer or member seeking to create RRCs from a non-electric certified displacement facility shall determine the net amount of electricity displaced by the non-electric displacement facility, using site-specific information and either the applicable formula established under sub. (2) or by subtracting the amount of electricity used by the non-electric displacement facility from the amount of electricity that would have been used for the same purposes by the electric device or electric service that was replaced by the non-electric displacement facility or that was used less due to the use of the non-electric displacement facility.

(4) If the value under sub. (3) is less than zero, the electric provider, customer or member may not create any RRCs for the non-electric displacement facility for that calendar year.

(5) The amount of conventional electricity displaced by a non-electric displacement facility in a calendar year is equal to the net amount of displaced electricity determined under sub. (3), multiplied by the applicable percentage of electricity in that calendar year that is from conventional resources as determined under sub. (1).

(6) The electric provider or the user of, customer or member creating RRCs from a non-electric displacement facility shall maintain at least three years of historical documentation of all information used in the determination made under sub. (3).

(7) For each non-electric displacement facility for which an electric provider, customer or member is creating RRCs, the electric provider, customer or member shall submit information to the commission to support its determination under sub. (3) at least annually. The commission may specify the timing and method for submitting information under this subsection. Determinations under sub. (3) are subject to the commission's review and verification.

SECTION 24. EFFECTIVE DATE. This rule shall take effect on the first day of the month following publication in the Wisconsin Administrative Register as provided in s. 227.22 (2) (intro.), Stats.

STATE OF WISCONSIN DEPARTMENT OF ADMINISTRATION DOA 2049 (R 07/2011) ADMINISTRATIVE RULES Fiscal Estimate & Economic Impact Analysis
Type of Estimate and Analysis
X Original ⍽ Updated ⍽ Corrected
Administrative Rule Chapter, Title, and Number
Chapter PSC 118 Renewable resource credit tracking program.
Subject
Result of Statutory Changes Adopted in 2011 Wisconsin Act 155 Pertaining to Renewable Resource Credits.
Fund Sources Affected			Chapter 20 , Stats. Appropriations Affected
⍽ GPR ⍽ FED ⍽ PRO ⍽ PRS ⍽ SEG ⍽ SEG-S
Fiscal Effect of Implementing the Rule
X No Fiscal Effect ⍽ Indeterminate	⍽ Increase Existing Revenues ⍽ Decrease Existing Revenues		⍽ Increase Costs ⍽ Could Absorb Within Agency's Budget ⍽ Decrease Costs
The Rule Will Impact the Following (Check All That Apply)
⍽ State's Economy ⍽ Local Government Units		⍽ Specific Businesses/Sectors ⍽ Public Utility Rate Payers
Would Implementation and Compliance Costs Be Greater Than $20 million? ⍽ Yes X No
Policy Problem Addressed by the Rule
The objective of the rulemaking is to amend relevant sections of ch. PSC 118 relating to renewable resource credits (RRCs) as a result of statutory changes adopted in 2011 Wisconsin Act 155, effective April 10, 2012.
Summary of Rule's Economic and Fiscal Impact on Specific Businesses, Business Sectors, Public Utility Rate Payers, Local Governmental Units, and the State's Economy as a Whole (Include Implementation and Compliance Costs Expected to be Incurred)
This rulemaking is expected to have no or minimal financial impact. All electric providers, customers or members of an electric provider, and renewable energy developers seeking to create renewable resource credits will be favorably impacted by this change, offering greater opportunities to create renewable resource credits. There is no anticipated impact on utility ratepayers.
Benefits of Implementing the Rule and Alternative(s) to Implementing the Rule
Under this rulemaking, a customer or member of an electric provider may create a RRC for conventional electricity displaced by the use of a displacement facility. Previously, only the electric provider could create a RRC. There is no alternative to implementing this rulemaking because the changes reflect the statutory changes adopted in 2011 Wisconsin Act 155, effective April 10, 2012.
Long Range Implications of Implementing the Rule
More RRCs will be available in the market, and can be used to meet Wisconsin's renewable portfolio standard.
Compare With Approaches Being Used by Federal Government
There is no federal renewable portfolio standard, so no comparison can be made.
Compare With Approaches Being Used by Neighboring States (Illinois, Iowa, Michigan and Minnesota)
Illinois Under Ill. Stat. ch. 220 § 5/16-107.5 (net metering), a retail customer that owns or operates a solar, wind, or other eligible renewable electrical generating facility with a rated capacity of not more than 2,000 kilowatts that is located on the customer's premises and is intended primarily to offset the customer's own electrical requirements is treated as owning and having title to the renewable energy attributes, renewable energy credits (RECs), and greenhouse gas emission credits related to any electricity produced by the qualified generating unit. Iowa Iowa state law does not address ownership of RECs for net-metering customers. Michigan A customer or member of an electric provider may generate or own a REC, providing that the facility is certified through the Michigan Renewable Energy Certification System (MIRECS). MIRECS is a tracking system similar to M-RETS. The Michigan Public Service Commission has also identified a REC aggregator who will aggregate like renewable energy that may then be purchased from retail customers or members. Minnesota Ownership of RECs where ownership is not addressed in power purchase agreements is not established under Minnesota Public Utility Commission rules or order; instead utilities must pursue negotiations and settlements with the owners of generation units.
Name and Phone Number of Contact Person
Lisa Farrell 608-267-9086

Notice of Hearing

Safety and Professional Services

Safety, Buildings, and Environment — General Part I, Chs. SPS 301-319

rulemaking_notices CR 13-042 CR 13-042