Welcome

Getting Serious About CO2 -Part I

Section I: Have I Got a Deal for You!

Question:

What business would make a similar investment seven times and not stop to check its performance?

Answer:

One that is guaranteed 10.2% return no matter what the performance is.

Collectively, the electric customers or ratepayers of Wisconsin utilities function as one, big investment business. We spend more than $7 billion per year for four, basic expenses:1

  • 45-60% ($50-65/mo) Payment on debt for power plants, transmission/distribution lines and other, grid-related costs. These costs were previously approved by either the Wisconsin Public Service Commission or commissions in other states.
  • 25-30% for “wholesale power”  ($30/mo)
  • 15% to one’s utility (~$15/mo)
  • 1.2% ($1.20/mo) for our collective Energy Efficiency rebate pool (Focus on Energy)

Guess which of these four percentages on electric bills has proven to be the most effective at reducing CO2 emissions?

U.S. electricity demand has decreased in 6 of the past 10 years. It is believed that without the incentives from state and federal energy efficiency programs, electricity use would have continued to grow at the rate of 1.9% per year instead of its decline rate of -0.1% per year, U.S. Data Source: U.S. Energy Information Administration, U.S. Energy-Related Carbon Dioxide

Since 2006, Wisconsin electric ratepayer have invested in and built seven expansion transmission lines. All of the lines promised to deliver savings and faster reduction of CO2 emissions associated with our electricity use.2

The companies who sold us these products, American Transmission Co (ATC), Xcel Energy, ITC-Midwest and Dairyland Power Cooperative will not reveal their full costs or describe the impacts on average, monthly Wisconsin electric bills in traditional ways that customers can evaluate. This is the equivalent to a retailer refusing to describe or reimburse customers for products they sell. When asked to rule on this imbalance the Public Service Commission of Wisconsin is on record defending utility refusal.3

In contrast, Wisconsin law requires the performance of our Focus on Energy efficiency investments to be audited every four years, yet we lack accountability for the much larger amounts we pay every month towards expansion transmission lines.4 We do, however, have three indicators that costs have far outpaced the builders’ estimated savings:

  • Absence of bragging. If energy savings existed, successful transmission builders would be foregrounding this evidence in their endless stream of proposals.5
  • Our electric bills. Since 2006, Wisconsin rates have risen much faster than the national average and are the second highest in the Midwest. Since 2012, the fixed cost “meter fee” for each customer has risen an average of 9% per year6.
  • Flat and declining use has negated potential savings. In 2007, Transmission builders developers warned that the cost of the Paddock Rockdale 345 kV expansion line between Beloit and Madison (visible from I-39) would add to Wisconsin electric bills unless state electricity use increased at least .5% per year (one half of one percent) in coming decades. Costs for this line and others are now pilling up as state electricity use averages .8% per year less than builders predicted as necessary to produce net benefits.

In 2019, Five Wisconsin lawmakers asked the Wisconsin Public Service Commissioners to test the economic performance of past expansion transmission lines to inform the review of the Cardinal Hickory Creek proposal but the agency failed to respond.7]

Section II: Can We Get a Deal for Us?

Wisconsin electric customers are committed to conservation and environmental goals,..

A 2018 study8 by the American Council for Energy Efficient Economies (ACEEE) shows that Wisconsin electric customer commitment to reducing use and lowering CO2 is high by all standards. Even at its current, under-funded level, Wisconsin’s Focus on Energy program reduces electricity waste at the impressive rate of .7% per year. The annual amount compares very favorably with programs and public participation in other states when performance per dollar invested is ranked. 14

It’s crucial to keep in mind that the harmful CO2 emissions are part and part and parcel of the grid-supplied power in our outlets. In 2017, power in the Midwest averaged 8% renewable energy with 73% coming from fossil fuel generation. By 2019, after additional billions spent on expansion transmission lines and remote power plants the percentage in the Midwest had increased only 1%.10 A drive in almost any direction in Wisconsin will encounter a massive transmission line system promised to make good on environmental goals that has failed.

“The cheapest energy is the energy you don’t use in the first place.” – Sheryl Crow

Though most Wisconsinites share a traditional, “waste not, want not,” sensibility, many households do not yet practice the simplest of conservation awarenesses. For example, household electricity consumption drops tends to drop about 13% when someone in the household tracks usage from month to month. Add to this, a number of low and no cost improvements and the household reduction can achieve 30%.11 These, combined with increasingly better habits, automatic timers and replacing a few inefficient appliances can reduce use 50% or more.12 Unlike the non-guaranteed, estimates that utilities make, these CO2 reductions and dollar savings are both maximized and assured.

Data in The American Council for Energy Efficient Economies report, reveals Wisconsin electric customers’ ability to leverage energy efficiency rebates to slash usage.13 While Wisconsin ranks sixth in reduced electricity use per rebate dollar invested, the state ranks low, 36th among 46 participating states, in the amount of rebate dollars made available for state customers to purchase the most efficient appliances and make other dwelling and business improvements. Only South Dakota’s per capita rebate amounts are smaller among midwestern states.

Unfortunate confusion persists around the source of funding for Wisconsin’s Focus on Energy program with some state lawmakers believing the program runs on utility donations or taxes.15 In reality, the program exists through monthly payments made by Wisconsin electric customers into a rebate pool that customers and businesses draw from to help them afford higher efficiency appliances, energy improvements to dwellings and modern energy savings tools and on-site solar. The rebates better enable customers to make over 90% of the resulting investments without passing these costs to ratepayers.

Question:

Environmentally, how effective are these appliance, equipment, dwelling and behavioral and solar improvements at reducing CO2?

Combining state data from ACEEE’s report with state CO2 emission records from the US Department of Energy, it becomes evident that states with accelerated energy efficiency programs are also leading the way in CO2 reduction.16

These programs are successful because ratepayers and businesses are highly motivated to realize significant savings over time. The emission reductions are dramatic because using significantly less power means less dependence on the source of the problem– grid supplied power that is 68-75% fossil fuel generation. A key difference in higher-funded or “accelerated” efficiency programs is the greater degree of public education and outreach. Unlike Wisconsin, accelerated programs provide impartial, non-business affiliated energy conservation and efficiency specialists to help home and business owners develop objective improvement plans. Renters also participate through incentives offered landlords and apartment building owners. Industries with heavy reliance on electric power such as dairy farm operations are offered highly specialized rebates. With every passing year, Wisconsin’s Focus on Energy program falls further and further behind. Other states are slashing use and adding distributed solar at rates that directly avoid the transmission and power plant utility expansions that plague Wisconsin electric bills. It has been six years since retiring PSC Wisconsin Commissioner Eric Callisto advised in his dissenting opinion regarding a historic cost increase for Madison Gas and Electric customers:

“I think we should …evaluate placing a fair and transparent value on distributed generation, and at least start down the discussion path of the role of regulated utilities in a future with flat load growth, increased distributed generation and more robust consumer involvement in energy choices.17

Section III: Big is Big

With utilities in Wisconsin posing many more renewable energy and natural gas power plants,..

Dropping costs of solar panels and the prospect of affordable battery storage has more people considering “going solar” than ever before.21 As previously mentioned, solar that is distributed to home, farm, business and community-serving locations has the added advantage of avoiding CO2 emissions at a faster rate. The benefit can also be dramatically amplified when households and businesses shift their heavier uses of power to solar production hours of the day.

In contrast, the CO2 reduction abilities of utility-scale renewables is limited. Adding renewables to the grid further increases grid dependency and the tremendous amount of wasted energy inherent in the fossil fuel generation. More than 60% of the energy used to generate power with the coal and natural gas power plants that supply 68-75% of our power to Wisconsin literally goes up in wasted heat and CO2 and other harmful gasses.

Source: U.S. Energy Information Administration, Monthly Energy Review

Thus, when a household or business uses conservation or efficiency to reduce use of 1 kWh hour of power, it avoids the equivalent of nearly 3 kWh’s of comprehensively measured energy with associated negative environmental/climate change impacts.

In the early 1980’s, utility interests began widespread public relations campaigns inferring that renewable energy added to the grid somehow replaces of fossil fuel generation. In 2005, Wisconsin joined MISO, a massive electricity market of utility interests who plan costly grid expansions proffering the same replacement advertisements. After 45 years and billions in new costs, the attainment of only 9% renewable energy in Midwest outlets deserves wide criticism. Had the same billions been placed into customer or demand side energy efficiencies and CO2 reduction maximized distributed generation, many Midwest communities could be on the verge of zero carbon emissions associated with electricity use. The clear path before us was never replacing “dirty” power plants with “cleaner” ones but removing waste and dependence on a for-profit, monopolized electric market with no inherent motivation to make significant environmental progress. The Wisconsin Public Service Commission (PSCW) has furthered our utilities’ absolute monopolization of not only electric customer dollars and more recently, large expanses of state lands and local economies. The ability to hold off the next stage of unnecessary monopolization of land and local economies rests cultural understandings of the same, superior alternatives.

By ignoring that public demand for power is dropping and could drop much faster, decision-making at Public Service Commission of Wisconsin continues to bolster absolute control of utilities. Contradictorily, within a one year span of time, the PSCW approved a 625 MW natural gas power plant in Superior, Wisconsin 22 and more than 500 MW in massive solar power plants without mention of fossil fuel generation retirement. The 300 MW Badger Hollow solar power plant covering 4-5 square miles of prime farmland with a million solar panels near Montfort, in Southwestern WI is used here to compare results from the alternative efficiency and distributed path. The comparison provides both the monetary but environmental bottom lines by forecasting CO2 emission reductions over the 30 year lifespans of the investments.

With more that 47 million megawatt hours of Wisconsin fossil fuel generation to replace under antiquated PSCW thinking, 23 it is crucial for Wisconsinites to place utility scale solar power plant land requirements into perspective. At a conservative land use rate of 8 acres per utility scale solar MW, more than 400 square miles of Wisconsin land would need to be permanently blanketed with solar panels. It is worth driving on State Highway 18 west of Dodgeville, WI for a personal experience of two, continuous miles of solar panels being constructed between the Cobb and Montfort. The first hand encounter will leave no doubt that solar power plants on this scale permanently transform rural communities as properties are converted to utility ownership and the former agricultural economy disintegrated. Prior to PSCW decision-making, all solar power plants of this scale have been located in sparse, arid areas.

At an inclusive cost of about $504 million that would be passed to Wisconsin ratepayers, the 300 MW Badger-Hollow solar power plant would avoid about 6 million metric of C02 emissions over its expected lifespan of 30 years. Distributed across Wisconsin’s 2.6 million residential customers, Badger-Hollow would would add about 14 cents per month over the three decades, A simple, tested alternative is to apply the same millions to rebates through the Focus on Energy Program to stimulate more electric customers to go solar. The program currently offers a 26 cent per watt solar rebate fund that is exhausted every year. $504 million in rebates could assist more than 380,000 households to install 5 kW solar arrays which, together, would avoid 50 million tons of C02 emissions– 8 times more than Badger Hollow.

With solar panels now offsetting rising electricity costs in these homes, saving would average about $72 per month over 30 years including paying for the initial investment. The table includes two examples where the rebate incentives are increased to 52 cents and 90 cents per watt of the estimated $2.50 per watt for residential rooftop solar installations. Even when rebate incentives are substantially increased the environmental benefits are profoundly greater. Unlike Badger-Hollow which only adds to electric bills, the estimated $76 per month savings per solar household amounts $27,000 in energy savings Across all 190,000 solar homes, more than $5 billion in energy savings would be realized.

The National Laboratory of the U.S. Department of Energy has estimated that at least 33% of the electrical power needs can be derived from rooftop solar.24 Under Massachusetts’ higher rebates for energy efficiency and distributed solar investments, home and business solar installations have exceeded 1500 MW. 25

Section IV: Past Time to Re-Invigorate Focus on Energy

In 2009, Wisconsin lawmakers voted to ramp up the Focus on Energy Program in several steps exceeding the doubled funding level considered here. Unfortunately, the improvement was soon nixed by then Governor-elect Walker. In 2018, Governor Evers asked Wisconsin lawmakers to remove the current 1.2% cap on the program but the improvement has yet to introduced for action.26 No doubt, it will require wide requests from ratepayers and businesses to wake up lawmakers but the lack of a diverse energy economy in Wisconsin compared to Illinois, Michigan and Minnesota will become very apparent within a few years.

Another policy update looms on the horizon for Wisconsin as well. Most states with accelerated energy efficiency programs have policies that reward utilities for reaching defined energy reduction goals. The utilities are also rewarded for Greenhouse Gas Emission reductions. The money for these payments comes from sharing a slice of the substantial monetary benefits of the accelerated energy efficiency, dwelling improvements and distributed energy programs. The policy is called “de-coupling” because it minimizes the loss of revenue that a utility would normally feel when energy sales decline. De-coupling can take place with other rate structure changes to enable more competition between utilities and companies that make improvements on the home, business and community level. In our present “coupled” state, Wisconsin PSC practice and laws encourage undesirable behaviors from the utilities they regulate: they oppose measures that lower power consumption and cash flow to utilities; they have new steel in the ground build prejudice because, currently, it is the only measure that guarantees monetary rewards, while holding key fossil fuel generation power plants, the utilities do not target CO2 emission reduction because there is no money in it, and; utilities will not consider downsizing and right-sizing even when appropriate because the PSC only incentivizes utility growth.

Eventually, the rate of capital building will force electric service costs high enough to force the commission to shift focus and follow the steps of other states. Even at today’s costs, consumers who do the math see how much they can save over time by going solar and battery storage is catching up quickly. In sum, there is so much money to be saved through efficiency and generation self-sufficiency that the Commission will be forced to recognize it. Utilities already do; they are not going to leave the feed trough as long as the PSC keeps filling it up with ratepayer dollars.

Where does Focus on Energy stand today? Auditors who assess the performance of the Focus on Energy program note the significant reduction in use per ratepayer dollar spent but consistently suggest that public outreach and conservation education could be significantly improved. Focus has begun some measures in this regard such as free, basic household energy efficiency kits, email announcements, offering community-based workshops and suggestion box. If you have not yet ordered one of the free efficiency kits with LED bulbs, low flow shower heads and smart power strips, doing so will also place you on their email list. Remember to mention the importance of the efficiency/local power path and Focus on Energy when communicating with lawmakers and the PSCW.

Some groups, including Renew Wisconsin propose that Wisconsin ratepayers need to support rapid utility expansion and the efficiency path at the same time. Their all of the above stance foresees no substantial changes other than huge tracts of land being gobbled up utilities. The forecast assumes Wisconsin ratepayers will be content with continually escalating costs and poor CO2 reduction performance.

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1 In theory, Wisconsin lawmakers define what kinds of power plant and transmission investments ratepayers can be required to make. In practice, the three Commissioners heading the Public Service Commission of Wisconsin make the final spending decisions monetarily affecting electric bill decades after the Commissioners’ terms are complete. Wisconsin Commissioners are appointed for six year terms by the Governor. In some states, Commissioners represent specific areas in the state and are elected by citizens in those areas. Electric bill percentages: See http://soulwisconsin.org/Resources/FootnoteHarbour.pdf#page=42 and this 2011 MISO account: https://apps.psc.wi.gov/pages/viewdoc.htm?docid=370481 at p.86, Table 2.6-2: Comparison of BAUMLDE future retail rate to current [rates] in early, 2011. Generation Production or wholesale energy makes up 25% of the average Midwest retail electric bill. Together, Generation and Transmission account for 45% of the retail electric charges. The trend of high annual growth rates for power plant and transmission costs in Wisconsin can be seen at https://apps.psc.wi.gov/pages/viewdoc.htm?docid=364956 at .pdf p.60-61, Figure 25 Eight-year Annual Growth, Rate of Revenue Requirement Components—Major IOUs (%).

2 Net energy cost savings & environmental benefits claimed, 2007-2018 http://soulwisconsin.org/Resources/FootnoteHarbour.pdf#page=46

3 To date, transmission builders refuse to provide customers, state lawmakers and the PSC evidence that their products deliver the benefits they promise even when formally requested by intervenors representing public interests. See response to data request 15, pdf p. 48 http://apps.psc.wi.gov/pages/viewdoc.htm?docid=360493 and transcript of a special PSC hearing to compel transmission builders to provide ratepayer level impacts at starting at p. 202 https://apps.psc.wi.gov/pages/viewdoc.htm?docid=364604

4 WI Transmission Expansion Spending table excerpted, pdf p. 40 http://soulwisconsin.org/Resources/FootnoteHarbour.pdf#page=40

5 List of expansion transmission lines proposed and approved in Wisconsin http://soulwisconsin.org/Resources/FootnoteHarbour.pdf#page=44

6 Wisconsin Utilities, 2012-2016 Fixed Fee Increases, http://soulwisconsin.org/Resources/FootnoteHarbour.pdf#page=13 Fixed cost payments for Milwaukee ratepayers ranked second highest among US cities in 2016: https://www.synapse-energy.com/sites/default/files/Caught-in-a-Fix.pdf#page=12

7 (Bipartisan, Wisconsin State Legislators) Request for Economic Performance Testing of Expansion Transmission Lines, http://apps.psc.wi.gov/pages/viewdoc.htm?docid=361228

8 The 2018 State Energy Efficiency Scorecard, ttps://aceee.org/research-report/u1808

9 Writes engineer Bill Powers regarding the Badger-Coulee transmission line proposal, “The cost of the no-wires alternatives to offset the 0.22 percent per year peak load growth scenario, at $3.37 million (Load Management), $9.45 million (Energy Efficiency), and $18.75 million (community solar), are a fraction of the $190.9 million identified by ATC to upgrade LV segments as an alternative to B-C.” pdf p. 46, http://bit.ly/Powers-Direct

10 MISO 2016 State of the Market Report, excerpt on pdf p.36 http://soulwisconsin.org/Resources/FootnoteHarbour.pdf#page=36 See .pdf p. 30, Table 1: Capacity, Energy Output, and Price-Setting by Fuel Type, 2019 STATE OF THE MARKET REPORT FOR THE MISO ELECTRICITY MARKETS https://www.potomaceconomics.com/wp-content/uploads/2020/06/2019-MISO-SOM_Report_Final_6-16-20r1.pdf

11 SOUL’s free, “Wisconsin Meter Watch” initiative has demonstrated that households are capable of very significant reductions without compromising comfort or quality of life. http://soulwisconsin.org/Documents/13X13_EfficiencyHandout.pdf

12 Electric hot water heaters, common to rural Wisconsin average about 30% of household use. Replacing an electric heater with an on demand propane water heater not only eliminates significant demand for electrical power but reduces associated CO2 emissions by 1/3 to 1/5.

13 On p.10, ACEEE points out “..the third tier Kentucky, Nevada, Ohio, and Wisconsin are tied for 29th. Small improvements in energy efficiency will likely have a significant effect on the rankings of states in these middle tiers.”

14 State annual, incremental reduction in use, by percentage divided by the rebate dollars collected for this purpose.

15 Why Did WI Utilities Bother to Cut WI’s Energy Efficiency Program a Mere 7%? http://soulwisconsin.org/Documents/7-percent_EE-First_ForknRoad.pdf

16 Only 2017 spending is compared in this graphic. State groupings are used due to significant differences in CO2 emission accounting from state to state and the fact that some states monetarily reward utilities for CO2 reduction.

17 MGE PSC Order .pdf p. 133, http://psc.wi.gov/apps35/ERF_view/viewdoc.aspx?docid=226563

21 Rural Northern Wisconsin Logs Record-Setting Solar Group Buy, Kari Lydersen, https://www.usnews.com/news/best-states/wisconsin/articles/2018-12-08/rural-northern-wisconsin-logs-record-setting-solar-group-buy

22 Utility regulators approve controversial $700M natural gas plant in Superior https://bit.ly/625MW_SuperiorGasPlant

23 68% of Wisconsin’s 69 million megawatt-hours (MWH) in 2018 was fossil fuel generation. See EIA graph at https://bit.ly/WI_Generation_EIA

24 See p.47 https://www.nrel.gov/docs/fy18osti/70901.pdf#page=47 Rooftop Solar Technical Potential for Low-to-Moderate Income Households in the United States. Wisconsin land use involved to meet 100% 2016 Wisconsin net generation with utility scale solar or alternatively, utility scale wind turbines. https://gallery.mailchimp.com/b59cfca00987b6608bf82d01f/images/f3e99378-77d8-4f1f-bd87-050a691d8526.png

25 Developing a Post-1,600 MW Solar Incentive Program: Evaluating Needed Incentive Levels and Potential Policy Alternatives, https://www.mass.gov/files/documents/2016/10/nf/developing-a-post-1600-mw-solar-incentive-program.pdf

26 Governor Tony Evers proposes carbon-free electricity by 2050, Chris Hubbuch, Wisconsin State Journal, http://bit.ly/Evers_MoreEEConservation

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