In Indiana, utilities ‘rewriting the rules’ on efficiency, solar

The Indiana State Capitol in Indianapolis. (Photo by MarkStuff via Creative Commons)

The Indiana State Capitol in Indianapolis. (Photo by MarkStuff via Creative Commons)

©2015 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

Indiana’s legislative session is scarcely a week old, but a pair of bills has already re-established a wedge between utilities and clean energy advocates.

One of the measures would allow utilities to propose their own energy efficiency goals and programs. The other would alter terms and impose demand charges for utility customers who choose to generate a share of their electricity with solar energy systems.

The bills dive into two of the thorniest energy policy issues facing states today — how to encourage reductions in energy use and give consumers the ability to generate energy with rooftop solar arrays while keeping utilities financially strong and able to reinvest in the grid.

In Wisconsin, clean-energy advocates take on underdog role

©2015 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

MADISON — Speakers at an all-day conference on energy policy in Wisconsin evoked two images of the state’s renewables sector. And neither is encouraging for clean energy advocates.

The first was “Rudy,” the inspiring 1993 film about a student’s quest to make the University of Notre Dame’s storied football program as a walk-on. The other reference was Sisyphus, the king in Greek mythology who was sentenced to push a large boulder uphill for eternity.

Whatever the metaphor, renewable energy advocates in Wisconsin are being forced to embrace the role of underdog with Republican Scott Walker staying put as governor, the state legislature awash in red and Walker appointees holding a majority on the three-member Public Service Commission.

Renew Wisconsin, the host of Friday’s meeting, sees the exponential growth in rooftop solar happening elsewhere across the nation, from neighboring Minnesota to red states such as Georgia. But the same is “just not happening in Wisconsin, and the major reason is policy,” said Tyler Huebner, the group’s executive director.

Wind energy development has largely been on hold in Wisconsin for a few years, Huebner said. And whatever momentum was building for adoption of more distributed solar generation was halted two months ago when the Public Service Commission approved a series of controversial proposals by We Energies, the state’s largest electric utility.

In a case that drew national attention, the PSC ultimately approved a reduction in net metering rates (the rates at which customers are credited for excess energy put on the grid) for We Energies customers, imposed a demand charge for recovery of fixed costs from customer generators and raised fixed charges for all customers (EnergyWire, Nov. 17). The commission also slightly reduced variable energy rates. But in sum, solar advocates say, the commission’s order effectively doubles the payback period on a residential solar energy system.

A poll last summer commissioned by an environmental advocacy group reflected strong support for energy efficiency and renewables. But without the ability to push through broad changes like an expansion of the state’s 10 percent renewable energy standard, furthering clean energy development must rely on more nuanced, targeted strategies, speakers said.

Those strategies include getting more large Wisconsin businesses on board and involved in policy discussions. Frequently cited was Milwaukee-based Johnson Controls Inc., a global supplier to the building and automotive industries with $43 billion in sales last year. The company intervened in the We Energies rate case to oppose the utility’s proposal to increase fixed customer charges, arguing that the changes discouraged energy efficiency.

Brad Klein, an attorney for the Chicago-based Environmental Law and Policy Center, emphasized the need for clean energy advocates to work with investor-owned utilities to redesign an outdated business model focused on a centralized power grid. That business model too often pits utility shareholder interests with consumer interests and serves as a barrier to reduce energy use and deploy new technology.

Klein cited the Utility 2.0 reforms pursued by the state of New York. And there’s a similar but less developed effort underway in Minnesota, where Xcel Energy Inc., a participant, just proposed significant new additions of wind and solar energy over the next decade and a half.

“I think the key is figuring out some of these business model challenges,” Klein said.

Battling the ‘steamroller’

While some utilities are trying hard to reinvent themselves, “others are doubling down on the status quo” and flexing their political muscle by challenging changes in statehouses and utility commissions, he said.

Renewable advocates say We Energies and two other Wisconsin utilities that pushed through large fixed-charge increases last month didn’t provide sufficient proof to support the commission orders. A decision is coming soon on whether to seek judicial review, and if so on what grounds.

State Rep. Chris Taylor, who drafted a measure last year to expressly authorize third-party solar financing in Wisconsin, said the commission’s decision “made our state one of if not the most hostile to solar.”

Taylor, a Democrat who said she belongs to the American Legislative Exchange Council and attended ALEC’s annual meeting last spring just to stay up to date on what her political opponents are doing, implored environmental groups, businesses and others to work more closely. Otherwise, they cannot overcome a galvanized conservative movement.

“We need to get organized,” she said. “We cannot come to the battle with a fly swatter when they have a steamroller.”

Matt Neumann, an owner of Sunvest Solar, which has installed 10 megawatts of solar and does business in five states, said there’s no disputing that utilities see solar developers like his company as a competitive threat and the two industries will continue to butt heads.

“We’re diametrically opposed to each other, and there’s really no other way to say it,” he said.

Politically, though, the battle isn’t one defined by party lines. There’s strong support for solar expansion among some conservatives, he said. For instance, Georgia tea party activist Debbie Dooley as well as a solar advocacy group led by former Rep. Barry Goldwater Jr. both opposed the We Energies proposal.

Neumann, the son of former Republican Rep. Mark Neumann, said distributed energy offers benefits that mesh with widely held conservative principles such as consumer choice and free markets, property rights, national security, and job growth (ClimateWire, Aug. 14).

“Those are just fun things to get Republicans thinking,” he said.

There are also subjects not to bring up.

“Do not talk about climate change, please,” Neumann said. “It’s a lightning rod topic, it’s not going to get you anywhere.”

Legislative prospects

Neumann said he’s met with Republican legislators and thinks that a measure to allow third-party financing for solar projects would be possible this session if framed as a consumer choice bill.

“A narrowly defined solar bill for financing I think has legs and can work,” he said. “Republicans would have to violate their own principles to deny it.”

Longer term, Wisconsin will have little choice but to transition to more renewable resources, especially if U.S. EPA’s Clean Power Plan is finalized, said Gary Radloff, director of Midwest energy policy analysis at the Wisconsin Energy Institute.

“The genie is out of the bottle,” Radloff said. “Our energy system is going to change, and you’re going to like it. But I have no idea how fast it’s going to happen.”

While embracing natural-gas-fired generation may help the state comply with greenhouse regulations and meet EPA’s 2030 target, the fuel would require significant upgrades in infrastructure, and history would suggest that prices for the commodity won’t stay cheap forever.

“We might have a couple of decades of reasonably priced natural gas,” Radloff said.

Ultimately, the most cost-effective strategy is to rely much more heavily on renewable energy and efficiency — a strategy that would require the scale of development underway in Minnesota.

“I don’t want to candy-coat this. It will cost us money,” Radloff said. “But it is achievable if you have the political will.”

Clean Line pursues key approvals for transmission projects

Clean Line transmission projects aim to carry energy from wind farms in rural areas like western Kansas to supply loads to the east. (Photo by Joseph Novak via Creative Commons)

Clean Line transmission projects aim to carry energy from wind farms in rural areas like western Kansas to supply loads to the east. (Photo by Joseph Novak via Creative Commons)

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

A $2.2 billion project that would connect yet-to-be-developed wind farms in southwest Kansas to the nation’s largest power market is on trial in Missouri this week.

Just to the east, Illinois regulators are poised to decide whether to allow a $2 billion sister project that would link wind-rich northeast Iowa to the same power grid.

Wisconsin fixed-charge decision a sign of more to come

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

State regulators last week voted to nearly double fixed charges for Wisconsin Public Service Co. electric customers in a decision that opponents say will penalize seniors and other low-use customers and discourage energy efficiency and investment in rooftop solar.

Thursday’s 2-1 decision was the first of three similar cases in the state to be decided in the coming weeks. These normally routine electric rate cases have drawn national attention because of a broader ongoing debate over utilities’ response to the increasing popularity of distributed solar.

In northeast Wisconsin, only 340 of Wisconsin Public Service’s 400,000-plus electric customers have solar energy systems — one of few facts in the contentious case that was not in dispute.

But Wisconsin Public Service Commission Chairman Phil Montgomery said now is the appropriate time for regulators to enact reforms that address the issue.

Wisconsin utility willing to invest in new U.P. power plant

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

Wisconsin Energy Corp.’s chief executive said the company is “willing to be an investor” in a new power plant to help alleviate a generation capacity shortfall in Michigan’s Upper Peninsula.

CEO Gale Klappa made the comment Wednesday during an earnings conference call in answer to questions about whether the unfolding crisis in upper Michigan could affect Wisconsin Energy’s ability to win approval from Michigan regulators for the buyout of Integrys Energy Group.

Klappa said that the company remains engaged in talks with Michigan Gov. Rick Snyder’s administration and state Attorney General Bill Schuette on a “global solution” to the Upper Peninsula’s energy woes, and that a solution could be agreed on within 60 to 90 days.

Utility challenges net metering plan in Ohio Supreme Court

©2014 E&E Publishing, LLC
Republished with permission

By Ellen M. Gilmer

One of the nation’s largest electric utilities is facing off against Ohio regulators over the state’s net metering policy.

The Public Utilities Commission of Ohio (PUCO) last week asked the state Supreme Court to dismiss a lawsuit from American Electric Power Company Inc.’s Ohio division alleging that recent changes to agency code would force the utility to subsidize its competition.

The lawsuit attempts to lessen the costs shouldered by public utilities in a deregulated electricity market. In Ohio, electricity generation became competitive under state law in 2001, allowing customers to choose to receive power generated by their traditional utility or by a competitive supplier. Distribution services and billing, however, remain the utility’s responsibility.

Exelon says nuclear ‘at risk’ designation is little help

Exelon's nuclear power plant at Byron, Illinois. (Photo by Bill and Vicki T via Creative Commons)

Exelon’s nuclear power plant at Byron, Illinois. (Photo by Bill and Vicki T via Creative Commons)

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

An executive for the nation’s largest nuclear generator said U.S. EPA’s proposed carbon plan, which designates 6 percent of the nation’s nuclear capacity “at risk” for retirement, provides little help to prop up financially struggling reactors.

“There’s not really much of an incentive,” Kathleen Barrón, senior vice president of federal regulatory affairs and wholesale market policy for Exelon Corp., told Illinois regulators.

Barrón’s comments came during an Illinois Commerce Commission policy session Tuesday on the state’s efforts to comply with the Obama administration’s plan for a 30 percent cut in carbon dioxide emissions from the power sector by 2030.

The meeting was the second of three scheduled by the commission to discuss implementation of the EPA rule, which is expected to be finalized next summer and implemented a year or two after that. A third policy session is set for Nov. 6.

Study: Midwest states should collaborate on EPA carbon rules

(Photo by Michael Leland via Creative Commons)

(Photo by Michael Leland via Creative Commons)

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

States within the Midcontinent Independent System Operator’s footprint could save billions of dollars complying with U.S. EPA’s proposed carbon rules for existing power plants by banding together and applying strategies beyond the four “building blocks” put forward by the federal agency, according to an analysis by the grid operator.

The analysis was conducted by the Carmel, Indiana-based regional transmission operator to help members prepare comments to submit to EPA. Results were presented to the grid operator’s Planning Advisory Committee on Wednesday. MISO hasn’t decided yet if it will submit formal comments by the deadline, which was extended until Dec. 1, said Brian Rybarik, MISO’s interregional director of external affairs.

FutureGen officials say Sierra Club complaint jeopardizes project

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

Efforts to develop the FutureGen “clean coal” demonstration project in western Illinois cleared a major hurdle last month with a legal victory that will force consumers to purchase the $1.65 billion project’s output.

But a different legal challenge — a Sierra Club complaint filed with the Illinois Pollution Control Board — is keeping jittery investors on the sideline and threatens to derail development of the plant, a FutureGen executive said in testimony filed with the board.

FutureGen 2.0 is the second iteration of a federal clean coal demonstration project originally proposed by the George W. Bush administration more than a decade ago. The original, more ambitious plan was scrapped after years of planning and political rancor because of massive cost increases.

Clean Line transmission project gets chilly reception in Missouri

©2014 E&E Publishing, LLC
Republished with permission

By Jeffrey Tomich

MONROE CITY, Missouri — A plan to string high-voltage transmission lines 200 miles across the state of Missouri got a chilly reception from area landowners during the first public airing of the project Tuesday.

Over the course of several hours, farmers, business owners, politicians and organized labor representatives aired opinions about the $2.2 billion project, which aims to deliver 3,500 megawatts of cheap wind energy from the southwest Kansas plains to more populated areas hundreds of miles to the east.

The hearing was the first of a series of public meetings on the project being held across the state. While some in attendance support the jobs, taxes and clean energy that developers promised, coalitions of landowners opposed to the project, most of them wearing neon green T-shirts or stickers that said “Block GBE,” dominated the hearing.