SB459: Bill Text

The bill changes certain requirements under current law for calculating an electric utility or cooperative's percentage. Under current law, an electric utility of cooperative can include in the percentage electricity derived from renewable energy facilities owned or operated by the electric utility or cooperative. Under the bill, if an electric utility or cooperative is part of an interconnected multistate system serving this state, the electric utility or cooperative may also include electricity derived from renewable energy facilities in that system, even if they are not owned or operated by the electric utility or cooperative. The bill also changes the requirements for energy derived from hydroelectric plants. Under current law, hydroelectric plants with a capacity of less than 60 megawatts are considered renewable energy resources. However, if such a plant was in service before January 1, 1998, no more than 0.6 percent of an electric utility's or cooperative's percentage may be attributable to such a plant. The bill eliminates this restriction. As result, any electricity derived from a hydroelectric power plant with a capacity of less than 60 megawatts, even if the plant was in service before January 1, 1998, may be included in the percentage.

The bill also makes certain changes to credits. Under current law, an electric utility or cooperative that exceeds a required percentage may create a credit that the electric utility or cooperative may use to satisfy a percentage in a subsequent year or sell to another electric utility or cooperative that the purchasing electric utility or cooperative may use to satisfy a percentage. Current law requires the PSC to promulgate rules for calculating and using credits.

The bill provides that any credit created under current law may not be used after December 31, 2011. The bill also provides that any credit created after the effective date of the bill may not be used four years after it is created, except that the PSC may promulgate rules specifying a different time period. The PSC may promulgate such rules if a different time period is necessary for consistency with any regional credit trading program that applies in this state. The bill also creates new requirements for calculating the amount of a credit created after January 1, 2004, from a facility that was placed in service before January 1, 2004. Under the bill, the PSC must promulgate rules that provide that the amount of such a credit is limited to the incremental increase in output from the facility that is due to capacity improvements made after January 1, 2004.

The bill also requires the PSC to promulgate rules that allow a wholesale customer of an electric utility or cooperative to use an allocated portion of a credit purchased by the electric utility or cooperative. However, the rules must provide that the wholesale customer may use the allocated portion only if the cost of renewable energy resources is included in wholesale rates paid by the wholesale customer. The PSC's rules must specify the manner for making the allocation. Current law does not address whether wholesale customers can use credits in such a manner.

State agency use of renewable energy

The bill requires DOA to establish goals for specified state agencies to generate or purchase electric energy derived from renewable resources. ("Renewable resources" has the same meaning as "renewable resources" under the renewable portfolio standard described above.) The agencies that are subject to the goals are: DOA, the Department of Corrections, the Department of Health and Family Services, the Department of Natural Resources, the Department of Public Instruction, the Department of Veterans Affairs, the State Fair Park Board, and the Board of Regents of the University of Wisconsin System. The goals apply to electric energy generated or purchased by the state for power, heating, or cooling purposes for all state owned or leased buildings occupied, operated, or used by the foregoing agencies.

The bill requires DOA to establish goals for each agency that are designed to accomplish the following goals: 1) that the percentage of electric energy generated or purchased by all of the above agencies for the above purposes that is derived from renewable resources (which the bill defines as the "renewable percentage") by December 31, 2006, is at least 10 percent; and 2) that the renewable percentage by December 31, 2011, is at least 20 percent. In determining whether the goals are accomplished, DOA must calculate renewable percentages based on the annual average for the three years prior to the foregoing deadlines. However, notwithstanding these goals, the bill provides that no agency is required to generate or purchase electric energy derived from renewable resources if the generation or purchase is not technically feasible or cost-effective. The bill requires DOA to submit an annual report to the governor and legislature regarding the attainment of the goals during the preceding year.

The bill also requires, in each fiscal year, that DOA determine the costs incurred by the agencies in complying with the goals that are in excess of the costs the agencies would have incurred in the absence of such goals. DOA must certify the amount that it determines to the PSC. The PSC must require the fiscal agent described above to collect from nonmunicipal electric utilities the amount certified or $1,000,000, whichever is less, and deposit the amount collected in the utility public benefits fund. In each fiscal year, DOA must transfer the amount collected from the utility public benefits fund to the general fund. However, if an agency's utility costs are paid from a segregated fund, DOA must reduce the transfer to the general fund by an amount that DOA determines is attributable to such utility costs, and transfer the amount of the reduction from the utility public benefits fund to the segregated fund.

Energy efficiency standards under state contracts

The bill requires DOA to prescribe and annually review and revise as necessary energy efficiency standards for equipment installed under state construction projects. The equipment subject to the standards is equipment relating to heating, ventilation, air conditioning, water heating or cooling, lighting, refrigeration, or any function that consumes energy. The standards must meet or exceed the following: 1) U.S. Environmental Protection Agency guidelines; 2) guidelines that apply to a federal energy management program for federal energy consumption; and 3) standards established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers (society).

For equipment that is subject to the guidelines, DOA must ensure that specifications for the equipment under any contract administered by DOA meet the standards. If there is no standard for the type of equipment purchased under a contract, or if equipment that meets a standard is not reasonably available, DOA must ensure that the equipment that is selected maximizes energy efficiency to the extent technically and economically feasible. The bill includes requirements for DOA to determine whether or not equipment meeting a standard is reasonably available, as well as for determining whether the energy efficiency of equipment selected is economically feasible.

The bill also prohibits the Building Commission from entering into a lease or other contract that provides for construction of a building, structure, or facility to be initially occupied by the state and that contains an option for the state to purchase the building, structure, or facility, unless the lessor or seller agrees that all energy-consuming equipment to be installed meets the standards described above.

Energy Conservation Code

Under current law, the Department of Commerce (department) is required to promulgate an Energy Conservation Code for the purpose of energy conservation in public buildings and places of employment and to review that code. In conducting the review, the department must consider incorporating into the Energy Conservation Code design requirements from the most current national energy efficiency design standards that are generally acceptable and used by engineers and the construction industry, including a 1989 version of a standard adopted by the society. The department must promulgate rules that revise that code to improve energy conservation whenever the society revises its standards for the energy efficient design of new buildings and whenever five years have elapsed since the last review of that code.

This bill eliminates the reference to the 1989 version of the standards described above, and refers instead to the International Energy Conservation Code. The bill also changes the five-year revision requirement to a three-year requirement. In addition, the bill requires the department, notwithstanding the foregoing requirements, to begin a review of the Energy Conservation Code on the effective date of the bill and to complete that review and submit proposed rules changing the Energy Conservation Code to improve energy conservation to the Legislative Council Staff by no later than the first day of the 18th month beginning after the effective date of the bill. In conducting the review, the department must consider incorporating the most recent national standards of the society.

Anaerobic digestor research

The bill requires the Department of Agriculture, Trade and Consumer Protection to include, as part of its 2007-09 biennial budget request, a proposal to provide additional funding for the research and development of anaerobic digestors at farms participating in the Discovery Farms Program under the Wisconsin Agricultural Stewardship Initiative.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB459, s. 1 Section 1. 13.94 (1) (r) of the statutes is created to read:

SB459,9,4 13.94 (1) (r) Audit the records of the fiscal agent, as defined in s. 16.957 (1) (hm), as requested by the public service commission or the joint legislative audit committee.

SB459, s. 2 Section 2. 16.75 (12) of the statutes is created to read:

SB459,9,6 16.75 (12) (a) In this subsection:

SB459,9,11 1. "Agency" means the department of administration, the department of corrections, the department of health and family services, the department of natural resources, the department of public instruction, the department of veterans affairs, the state fair park board, and the Board of Regents of the University of Wisconsin System.

SB459,9,13 2. "Agency building" means any state-owned or leased building that is occupied, operated, or used by an agency.

SB459,9,15 3. "Renewable percentage" means the percentage of total annual electric energy that is derived from renewable resources.

SB459,9,18 4. "Renewable resource" has the meaning given in s. 196.378 (1) (h) 1. or 2. and includes a resource, as defined in s. 196.378 (1) (j), that derives electricity from hydroelectric power.

SB459,10,3 5. "Total annual electric energy" means the total annual amount of electric energy generated or purchased by the state for power, heating, or cooling purposes for all agency buildings.

SB459,10,5 (b) The department shall establish goals for each agency that are designed to accomplish the following goals:

SB459,10,7 1. That the renewable percentage for total annual electric energy by December 31, 2006, is at least 10 percent.

SB459,10,9 2. That the renewable percentage for total annual electric energy by December 31, 2011, is at least 20 percent.

SB459,10,12 (c) In determining whether the goals under par. (b) are accomplished, the department shall calculate total annual electric energy on the basis of an average of the total annual electric energy during the 3 years prior to the specified dates.

SB459,10,15 (d) Notwithstanding par. (b), an agency is not required to generate or purchase electric energy derived from renewable resources if the generation or purchase is not technically feasible or cost-effective.

SB459,10,16 (e) In each fiscal year, the department shall do all of the following:

SB459,10,19 1. Determine the costs incurred by each agency in the prior fiscal year to attain the goals established under par. (b) that are in excess of the costs the agency would have incurred in the prior fiscal year in the absence of such goals.

SB459,10,21 2. Determine the total costs determined under subd. 1. for all agencies and certify the total costs to the public service commission.

SB459,10,24 (f) 1. Except as provided in subd. 2., in each fiscal year, the department shall transfer from the utility public benefits fund to the general fund the amount determined under par. (e) 2., or $1,000,000, whichever is less.

SB459,11,5 2. If an agency's electric utility costs are paid from a segregated fund, the department shall reduce the transfer to the general fund under subd. 1. by an amount that the department determines is attributable to such costs and the department shall transfer from the utility public benefits fund to the segregated fund the amount of the reduction.

SB459,11,10 (g) No later than March 1 of each year, the department shall submit a report to the governor and chief clerk of each house of the legislature, for distribution to the legislature under s. 13.172 (2), concerning the degree of attainment and, if applicable, reasons for nonattainment by the state during the preceding year in meeting the goals established by the department under par. (b).

SB459, s. 3 Section 3. 16.855 (10s) of the statutes is created to read:

SB459,11,21 16.855 (10s) (a) The department shall, by rule, prescribe and annually review and revise as necessary energy efficiency standards for equipment that is installed as a component of a construction project and that relates to heating, ventilation, air conditioning, water heating or cooling, lighting, refrigeration, or any other function that consumes energy. The standards shall meet or exceed current applicable guidelines of the federal environmental protection agency relating to energy efficiency of the functions specified in this paragraph, guidelines that apply to the federal energy management program under 42 USC 8251 et seq., and standards established by the American society of heating, refrigerating and air-conditioning engineers.

SB459,12,17 (b) The department shall ensure that the specifications for any equipment that is designed for heating, ventilation, air conditioning, water heating or cooling, lighting, refrigeration, or any other function that consumes energy under any construction project contract administered by the department meet applicable standards established under par. (a). If there is no standard under par. (a) applicable to the type of equipment being purchased or if the equipment meeting that standard is not reasonably available, the department shall ensure that energy consumption within a building, structure, or facility and all equipment that is purchased under each contract administered by the department maximizes energy efficiency to the extent technically and economically feasible. The department shall not determine that equipment that meets the applicable standard under par. (a) is not reasonably available on the basis of cost alone unless the difference in the cost of the purchase and installation of the equipment that meets the standard and the equipment that would otherwise be installed is greater than the difference in the cost of operating the equipment that meets the standard and the equipment that would otherwise be installed over the anticipated life of the equipment. The energy efficiency of equipment shall be considered to be economically feasible if the difference between the cost of the purchase and installation of energy-efficient equipment and the equipment that would otherwise be installed is not greater than the difference between the cost of operating energy-efficient equipment and the equipment that would otherwise be installed over the anticipated life of the equipment.

SB459, s. 4 Section 4. 16.957 (1) (c) of the statutes is amended to read:

SB459,12,21 16.957 (1) (c) "Commitment to community program" means a program by a municipal utility or retail electric cooperative for low-income assistance or an energy conservation efficiency program by a municipal utility or retail electric cooperative.

SB459, s. 5 Section 5. 16.957 (1) (h) of the statutes is amended to read:

SB459,13,2 16.957 (1) (h) "Energy conservation efficiency program" means a program for reducing the demand for natural gas or electricity or improving the efficiency of its use during any period, including a research and development program regarding the environmental impacts of the electric industry, but not including any program that the commission allows an electric utility to administer under s. 196.374 (3m) (d).

SB459, s. 6 Section 6. 16.957 (1) (hm) of the statutes is created to read:

SB459,13,4 16.957 (1) (hm) "Fiscal agent" has the meaning given in s. 196.374 (1) (aw).

SB459, s. 7 Section 7. 16.957 (1) (L) of the statutes is amended to read:

SB459,13,9 16.957 (1) (L) "Low-income assistance program" means a program for providing assistance to low-income households for weatherization and other energy conservation services, payment of energy bills or early identification or prevention of energy crises.

SB459, s. 8 Section 8. 16.957 (1) (o) 1m. of the statutes is amended to read:

SB459,13,14 16.957 (1) (o) 1m. The amount of the portion of the public benefits fee for fiscal year 1999-2000 that is specified in sub. (4) (c) 1., 2003 stats The amount specified in this subdivision shall not be subject to the reduction under 1999 Wisconsin Act 9, section 9101 (1zv) (a).

SB459, s. 9 Section 9. 16.957 (1) (o) 3. of the statutes is amended to read:

SB459,13,19 16.957 (1) (o) 3. Fifty percent of the amount of public benefits fees that municipal utilities and retail electric cooperatives are required to charge under sub. (5) (a) in fiscal year 1999-2000. The amount specified in this subdivision shall not be subject to the reduction under 1999 Wisconsin Act 9, section 9101 (1zv) (c).

SB459, s. 10 Section 10. 16.957 (1) (qg) of the statutes is created to read:

SB459,13,22 16.957 (1) (qg) "Public benefits program" means a low-income assistance, energy efficiency, or renewable resource program.

SB459, s. 11 Section 11. 16.957 (1) (rm) of the statutes is created to read:

SB459,14,3 16.957 (1) (rm) "Renewable resource program" means a program for encouraging the development or use of customer applications of renewable resources, including educating customers or members about renewable resources or encouraging customers or members to use renewable resources or encouraging research technology transfers.

SB459, s. 12 Section 12. 16.957 (2) (intro.) of the statutes is amended to read:

SB459,14,6 16.957 (2) Department duties. (intro.) In consultation with the council, the The department shall do all of the following:

SB459, s. 13 Section 13. 16.957 (2) (a) (intro.) of the statutes is amended to read:

SB459,14,14 16.957 (2) (a) Low-income assistance programs. (intro.) After holding a hearing, establish programs to be administered by the department In consultation with the council, establish requirements and procedures for awarding grants from the appropriation under s. 20.505 (3) (r) to provide for low-income assistance programs. In each fiscal year, the amount awarded under this paragraph shall be sufficient to ensure that an amount equal to 47% of the sum of the following is spent for weatherization and other energy conservation services:

SB459, s. 14 Section 14. 16.957 (2) (b) (title) of the statutes is amended to read:

SB459,14,17 16.957 (2) (b) (title) Energy conservation and efficiency and renewable resource programs.

SB459, s. 15 Section 15. 16.957 (2) (b) 1. of the statutes is renumbered 16.957 (2) (b) and amended to read:

SB459,14,23 16.957 (2) (b) Subject to subd. 2., after holding a hearing, establish programs for awarding In consultation with the council, establish requirements and procedures for the department to direct the fiscal agent to award grants from the appropriation under s. 20.505 (3) (s) for each of the following:

SB459,15,7 1. Proposals for providing energy conservation or efficiency services programs. In directing the awarding of grants under this subd. 1. a. subdivision, the department shall give priority to proposals directed at the sectors of energy conservation or efficiency markets that are least competitive and at promoting environmental protection, electric system reliability, or rural economic development. In each fiscal year, 1.75% of the appropriation under s. 20.505 (3) (s) total dollar amount of grants awarded under this paragraph shall be awarded in grants for research and development proposals regarding the environmental impacts of the electric industry.

SB459,15,14 2. Proposals for encouraging the development or use of customer applications of renewable resources, including educating customers or members about renewable resources or encouraging uses of renewable resources by customers or members or encouraging research technology transfers renewable resource programs. In each fiscal year, the department shall ensure that 4.5% of the appropriation under s. 20.505 (3) (s) total dollar amount of grants awarded under this paragraph is awarded in grants under this subd. 1. b subdivision.

SB459, s. 16 Section 16. 16.957 (2) (b) 2. of the statutes is repealed.

SB459, s. 17 Section 17. 16.957 (2) (bg) of the statutes is created to read:

SB459,15,21 16.957 (2) (bg) Administrative responsibility. Be responsible for administering public benefits programs throughout the state, except for programs under sub. (5) or s. 196.374 (3m) (d) or (e), and ensure, to the greatest extent practicable, that customers throughout the state have an equivalent opportunity to receive the benefits of the programs.

SB459, s. 18 Section 18. 16.957 (2) (br) (title) of the statutes is created to read:

SB459,15,23 16.957 (2) (br) (title) Contracts.

SB459, s. 19 Section 19. 16.957 (2) (c) (intro.) of the statutes is amended to read:

SB459,16,2 16.957 (2) (c) Rules. (intro.) Promulgate In consultation with the council, promulgate rules establishing all of the following:

SB459, s. 20 Section 20. 16.957 (2) (c) 1. of the statutes is amended to read:

SB459,16,9 16.957 (2) (c) 1. Eligibility requirements for receiving low-income assistance under programs established that receive grants under par. (a). The rules shall prohibit a person who receives low-income assistance from a municipal utility or retail electric cooperative under a program specified in sub. (5) (d) 2. b. or 3. a. from receiving low-income assistance under programs established that receive grants under par. (a).

SB459, s. 21 Section 21. 16.957 (2) (c) 2. of the statutes is amended to read:

SB459,16,12 16.957 (2) (c) 2. Requirements and procedures for applications for grants awarded under programs established under par. (a) or (b) 1.

SB459, s. 22 Section 22. 16.957 (2) (c) 2m. of the statutes is amended to read:

SB459,16,15 16.957 (2) (c) 2m. Criteria for the selection of proposals by a corporation specified in sub. (3) (b) par. (br) 2.

SB459, s. 23 Section 23. 16.957 (2) (c) 2n. of the statutes is repealed.

SB459, s. 24 Section 24. 16.957 (2) (c) 4. of the statutes is amended to read:

SB459,17,6 16.957 (2) (c) 4. Requirements for electric utilities to allow customers to include voluntary contributions to assist in funding a program established programs that receive grants under par. (a) or (b) 1. with bill payments for electric service. The rules may require an electric utility to provide a space on an electric bill in which a customer may indicate the amount of a voluntary contribution and the customer's preference regarding whether a contribution should be used for a program established that receives grants under par. (a) or (b) 1. a. or b 2. The rules shall establish requirements and procedures for electric utilities to pay to the department fiscal agent any voluntary contributions included with bill payments and to report to the department fiscal agent customer preferences regarding use of the contributions. The department fiscal agent shall deposit all contributions received under this paragraph for programs that receive grants under par. (a) in the utility public benefits fund and shall hold all contributions received under this paragraph for programs that receive grants under par. (b) as directed in s. 196.374 (3r).

SB459, s. 25 Section 25. 16.957 (2) (d) 2. of the statutes is amended to read:

SB459,17,11 16.957 (2) (d) 2. Encourage customers or members to make voluntary contributions to assist in funding the programs established under pars. (a) and (b) 1. The department shall deposit all contributions received under this paragraph in the utility public benefits fund described in par. (c) 4.

SB459, s. 26 Section 26. 16.957 (2) (d) 3. of the statutes is repealed.